📚 The Organizational Design Playbook
The purpose of this playbook is to offer founders an interactive guide for designing how their organization works. In particular, we aim to help you create a system for making high-velocity and high-quality decisions at scale. This is done by defining what actions make up your company culture and applying them to the right areas of your business.
“Nothing is more important than to get the culture and the people right. Whatever successes we’ve had at Bridgewater were the result of doing that well—and whatever failures were due to our not doing it adequately. That might seem odd because, as a global macroeconomic investor, one might think that, above all else, I had to get the economics and investments right, which is true. But to do that, I needed to get the people and culture right first.” — Ray Dalio, Bridgewater
Part I starts with articulating your culture through company principles. We created a short exercise for reflecting on how you and your past colleagues operate and brainstorming what actions are needed to win your market. Along the way, you’ll see suggestions from top companies with performance-focused cultures like Amazon and Netflix. Once you have a draft ready, we share steps for getting buy-in from your team to finalize your company principles.
Even if your company is just two people, you can use this exercise to hire your first employees. As an output, you’ll receive a custom set of interview questions with a calibration guide to filter for candidates that align with your unique culture.
“[My co-founder] thinks we are the only company to write our core values down before we hired anyone... Our first employee was our first engineer. I probably looked through 1,000s of people and interviewed 100s. Your first engineer is like bringing in a DNA chip to the company. This person, if we're successful, there are going to be a thousand people just like him or her in the company. Now, you want a diversity of background, age, etc. You don't want diversity of values, you want very homogenous beliefs.” — Brian Chesky, Airbnb
Part II focuses on maintaining a high-performing culture at scale. We’ll share ideas on how to align the team around your mission and principles, ranging from company rituals to performance reviews. We’ll also include tools and mental models from Amazon to orient your company for innovation and speed.
In writing this document, there were few guiding tenets that informed our approach. This playbook is intended to be:
- Optimized for implementation — Not just content. Each section produces an output to be applied at your company.
- Better as building blocks — One section builds on the next to help you create a culture that is robust, durable, and impactful.
- Narrow focused, but broadly applicable — Our North Star is a company culture that helps all employees make high-velocity and high-quality decisions.
Accordingly, we do not cover some important related topics, such as defining your overall mission and building a recruiting pipeline. As complementary resources, we recommend Homebrew’s guides on Sourcing and Resumes, Asana’s guide to Defining your mission, and First Round’s article on Compensation.
A note about my journey to writing this playbook
At my startup, LessonLodge, we didn’t have company principles. I looked at other founders’ blog posts about their culture and thought it was all fluff. Coming from a finance background, I thought building a successful company was only about delivering results. I was data-driven and outcome focused, but that’s about it.
When we sold our company to Reverb, I stayed on for two years to learn from the CEO. He was a multi-time founder who had IPO’d his previous company. He was laser-focused on a few ideas that were instrumental to the company’s success.
Reverb is the marketplace for musicians, and almost everyone at the company played music. Helping people accomplish their personal mission at your company is a powerful thing. The team had strong Mission Alignment and couldn’t imagine working anywhere else. The CEO also wanted everyone to have authentic Customer Empathy. We had internal contests that were fun, but also enabled employees to experience buying and selling on the marketplace regularly. People had passion for the product, knew the customer journey — and that empathy permeated the work and culture. Lastly, he pushed everyone to Think Bigger. When I first started, he handed me a copy of ‘The One Thing,” a tactical guide to achieving ambitious goals, and always made sure we started projects by working backwards from the biggest possible outcome.
While the CEO demonstrated and promoted these ideas, they were not formal principles at the company. He personally made them happen, and pushed others to act accordingly. When I joined Amazon, I saw what it was like to have actions institutionalized at the company. Amazon’s 14 leadership principles are regularly leveraged for everyday decision making — kind of like Jeff is always in the room, without having met 99%+ of his employees. As I worked across teams and geographies at Amazon, it became clear the people and culture are the secret sauce.
But Amazon is just one company, what about others? The more I studied exceptional companies like Netflix, Twilio, and Stripe, the more the pattern was clear — the best companies align employees around an inspiring mission and operating principles that win markets.
So with this playbook, I’ve just tried to share learnings from the greats, while making it easy to build a performance-oriented culture that is unique to you. I believe the secret hidden in plain sight is that the right company culture outperforms.