Building and developing an organization is a constant balancing act between structure and culture. We intuitively know that both are important, but in practice we tend to focus on one or the other – often depending on what we as leaders feel most comfortable with. The problem is that if we only focus on one, the other will sooner or later put a stop to growth.
In order for an organization to grow and develop sustainably, structure and culture must develop in parallel and in interaction. If we focus too much on structure without working on culture, we risk creating a rigid and unwieldy organization. If, on the other hand, we invest everything in culture and ignore structure, we become inefficient and dependent on people.
The biggest challenge is that we often do not notice the imbalance until development have already stopped.
What happens when we only develop structure?
Imagine an organization that focuses only on structure. To create order and efficiency, regulations are built, a new IT system is introduced, control functions are established and all processes are documented.
At first it feels like efficiency. But soon problems start to creep in:
- Administration increases – more and more reporting, more approvals and more meetings are required.
- Flexibility decreases – because all decisions have to follow the rules, creativity and initiative are inhibited.
- People lose commitment – when work becomes a constant battle against systems and routines, the joy of work disappears.
The result? An organization where no one really knows why they do what they do, only that it is “the way it should be”. The energy that once existed in the business is drained by regulations and processes, and employees lose their sense of meaning.
What happens when we only develop culture?
Now imagine an organization that only invests in culture. Here it is all about values, community and commitment. Decisions are made by consensus, creative initiatives are welcomed and there is a sense of freedom and trust.
Sounds great? Absolutely – but here too, problems lurk around the corner:
- No one really knows how to do things – because there are no clear processes, the wheel is reinvented over and over again.
- The business becomes dependent on people – when there is no structure, it is individuals who carry the organization, which makes it vulnerable to change.
- Efficiency decreases – without clear frameworks, it becomes difficult to scale the business, and decision-making becomes slow and inconsistent.
The result? An organization where everyone thrives – until they become frustrated that nothing is getting done. Without a solid foundation of structure, you can have as much commitment as you want, but the organization will still get stuck.
Switch between structure and culture to maintain balance
The best strategy for creating an organization that both grows and thrives is to switch between developing structure and culture. If you have just implemented a new CRM system (structure), the next step could be to develop a team spirit and talk about values (culture).
If you have just made a major investment in strengthening creativity (culture), the next step may be to review the way you work with feedback and follow-up (structure).
This shift is especially important when the organization is growing, as each growth phase places new demands on both how we work (structure) and how we thrive and collaborate (culture).
Tipping points where the balance is tested
Certain phases in an organization’s growth are particularly sensitive to imbalances between structure and culture. Here are three classic tipping points:
- From small-scale growth (5–15 people)
- Everyone knows everything and can talk to each other directly.
- Suddenly, that’s no longer enough – you need clear roles and ways of working (structure), while maintaining a sense of belonging (culture).
- From informal to formal organization (15–35 people)
- This is where specialization occurs – different teams get their own areas of responsibility.
- The structure must be clarified: who does what, how do we communicate?
- At the same time, it is important to ensure that the organization does not lose its soul and that values and commitment live on.
- From a unified to a geographically dispersed organization (35–75 people and up)
- When an organization grows across multiple locations, it becomes more difficult to keep both working methods and culture together.
- More structure is needed for coordination, but also conscious efforts to maintain a strong culture in all locations.
In all these phases, we see companies getting stuck in either over-administration or chaos, depending on which side they have leaned towards. Those who succeed are those who understand that structure and culture must develop in parallel.
An organization needs both
Structure and culture are not opposites – they are prerequisites for each other.
- An organization without structure shrinks under its own inefficiency.
- An organization without culture becomes an empty shell without commitment and direction.
It is about switching between them and ensuring that they develop in step with the needs of the organization.
Once you’ve built a process, strengthen the culture. Once you’ve worked on culture, review the structure.
By actively balancing these two forces, organizations can not only grow, but also continue to be a place where people thrive, develop, and create value.
