Reinventing the Organization by Arthur Yeung and Dave Ulrich, published in 2019, is a book about how companies should be structured when markets change faster than traditional hierarchies can react. Yeung is a senior management adviser at Tencent and a former chief HR officer of Acer, and Ulrich is a University of Michigan professor and one of the best-known writers on HR and organisation design. Their research draws on large tech firms in China, the United States and Europe.
What is Reinventing the Organization about?
The starting point is that the classic pyramid, with decisions flowing up and orders flowing down, cannot keep up with fast-moving markets. The authors looked at how Alibaba, Tencent, Huawei, DiDi, Amazon, Google, Facebook and the Finnish games studio Supercell organise themselves. They found a pattern they call a market-oriented ecosystem: many small teams close to customers, supported by shared platforms that supply money, data, technology and talent.
The book then sets out a six-step framework that leaders can use to redesign their company. The steps address the strategy the firm pursues, the capabilities it needs, the structure that connects teams and platforms, the culture that holds it together, the management tools that allocate money and measure results, and the role of leaders in the new setup. Each step comes with cases and diagnostic questions.
What makes the book different from most writing on team design is the depth of its Chinese examples. Western readers rarely see inside Tencent or Huawei, and the authors had direct access to both. The book is written for senior executives and HR professionals, so the language is formal and the cases are large.
What are the main lessons for founders?
- Keep teams small and close to customers. Once your startup grows past 30 or 40 people, split work into small units that own a customer outcome instead of a function.
- Build shared platforms. Finance, data, recruiting and shared tooling can sit in a central team that serves every small unit. That stops each team from rebuilding the same things.
- Fix strategy before structure. Founders love redrawing org charts. The book shows that structure only works when it follows a clear strategy and the capabilities that strategy needs.
- Change incentives with the structure. If teams are told to act like owners but are still paid and judged like employees in a hierarchy, nothing changes.
- Let leaders coach more than command. In a team-based company, leaders set direction, allocate resources and remove blockers instead of approving every decision.
Who should read Reinventing the Organization?
Founders and COOs of scale-ups with 50 or more people, where approval chains start to slow everything down. HR leads and people partners who are asked to design the next structure will find the framework especially useful. It also helps founders who sell to large companies and want to understand how their buyers are reorganising.
Early-stage founders with a team of 5 can skip it. At that size everyone already works close to the customer, and the problems the book addresses have not appeared yet.
How do you put Reinventing the Organization to work this week?
- Draw your current team structure and mark every decision that waits for one person’s approval.
- Pick one customer outcome, such as activation or renewals, and sketch a small cross-functional team that could own it end to end.
- List the shared services that team would need from the rest of the company, such as data, design or finance, and who would provide them.
For practical ideas on structuring and leading small teams, the free Startups and Teams module of the F/MS Startup School is a good next step.
Where does Reinventing the Organization fall short?
The cases are giants with thousands of staff, so a seed-stage founder has to translate almost everything. The authors had close ties to several of the firms they describe, and the book reads as admiring; it says little about the long hours, layoffs and regulatory crackdowns that later hit some of the Chinese companies. The writing is dense and aimed at HR professionals. For a startup-sized view of building a team culture, read The Culture Code.