Order and chaos. What we know and what we don’t know. No material successful output is accomplished alone. The most spectacular achievements require a team, a company, an organization.

Prior to a team, prior to an organization, there is chaos. There is no order. Defining and planning an organization brings order. The design is an analysis of what we know, or what we think we know translated into thoughts. This is thinking and the most important part of every CEOs role.

Fielding the organization, hiring people, introduces more chaos, uncertainty, ambiguity, because real people do not follow the perfect design. This is the bane of every startup.

People must be adapted to the organizational design, but there is no motivation to do so. The founder first tries to be the parent, with impatient instruction, repetition and increasing volume. “If I told you once, I told you a thousand times.”

After some time, the founder realizes that motivation will only come by enrollment of the people into the purpose of the enterprise. Next to the perfect organization design emerges the perfect purpose in the form of mission. And the founder has to talk about it. Without people, the founder only had to think. Now, the founder has to communicate, but the thoughts are ill-formed and people have questions. A discussion ensues and, if successful, a company is born. This is the constant struggle of order out of chaos.

Order and chaos. That is the balance beam, one foot in order and one foot in chaos. Order is what we know. Chaos is what we do not know. We bring order to chaos by exploring its value in relation to what we know. That value sorts into a mental construct called hierarchy. Human beings (and other life forms) do this as a natural process to determine what we pay attention to.

We assign something a value based on what we know. That value will be different for each person, if each person stops to think about it. Some people do not stop to think about what is of value and simply adopt the value chain of other people (without thinking). In this value chain, some things are more valuable than others and in the sort, a hierarchy emerges.

Organizationally, some mistakenly believe that hierarchy creates a rigid “command and control” sequence for making decisions. We don’t understand hierarchy in relation to its value chain. Organizationally, hierarchy is a value chain or value stream where managers bring value to the decision making and problem solving of their teams. This is the central role of management.

When I ask a group of managers if they have “direct reports,” all hands go up. I announce they have already fallen for the mistaken understanding that they are managers so people can report to them. The truth is, everyone in the company reports to lots of different people. But each team member can only have one manager, and the purpose of that manager is to bring value to the problem solving and decision making of each team member.

Organizational structure is simply the way we define the working relationships between two people. That most important relationship is between a manager and a team member. That is the beginning of the value stream naturally embedded in hierarchy. Bringing order out of chaos.