Developing your organization with Claudia Michalski

Most startups begin with the intention of maintaining flat hierarchies. What needs to be clarified from the outset, and what warning signs indicate that structures need to be introduced urgently?

In my experience, many founders start out with absolutely no structure. In practice, this means that everyone reports to the founding team, to a single level of management. This quickly becomes problematic when all initiatives originate there and all decisions end up there. The founding team must not become a bottleneck. That’s why structures should be established early on, with clear reporting lines and responsibilities. One rule of thumb is that a leader can directly manage a maximum of twelve employees. That may sound like a lot of people at the founding stage, but when a company grows rapidly, there can suddenly be 50 people reporting to a single manager. That doesn’t work at all; it creates frustration on both sides and leads to unnecessary delays.

Pay close attention to this from the very beginning: Who takes responsibility for which areas and then makes decisions independently? In the early stages, everyone often does everything, and there is no clear distinction regarding who is responsible for what. It is important to make specific decisions: Who focuses more on internal matters, and who on external ones? Who is the central point of contact within the organization for defining processes, developing products, and – most importantly – resolving internal conflicts? At the same time, you should determine who will focus more on external activities: acquiring customers and partners, attracting investors if necessary, managing marketing activities, and representing the company externally are all part of this. Also important: Who is responsible for finances? I am an angel investor and mentor to a newly founded startup run by two women who divided up the roles at the very start and communicated them clearly. It looks professional, and it makes life easier for investors.

In general, HR aspects are often overlooked in startups; in the early stages, everything else seems more important. This can come back to haunt you later. Not everyone is willing to devote their entire life to the demands of a startup, and they don’t have to be. It helps to discuss from the beginning what each person is willing to contribute to the company.

Founders usually start out as a strong team; friendships either already exist or develop under the pressure of intense work. Often, splits occur later on, which can be traumatic. What should you keep in mind when building a team and as the company evolves to prevent this from happening – or at least to ensure that you can part ways on good terms?

Ideally, you clarify a few things at the beginning and seek advice. Personality tests, for example, can help determine whether the team has the right mix of characteristics. Some tests are based on the Big Five – that is, the factors of openness, conscientiousness, agreeableness, extraversion, and emotional stability. The results provide a good basis for determining which division of responsibilities makes sense within the team. For example, someone who is highly conscientious is well suited to handling financial matters, while someone whose strengths lie in openness and sociability may take more naturally to business development and public-facing roles.

What does not work well is when founders are too similar. It is better to look for co-founders whose traits complement each other. You also should not assume that a friendship automatically makes day-to-day business easier. At the very least, everyone should try to keep personal relationships separate from their professional roles. It is perfectly possible to have a barbecue with your families on Saturday after resolving a conflict at the office on Friday. But this requires a high degree of self-reflection and a clear understanding of your respective roles.

It helps to have an experienced founder coach provide guidance from the very beginning. Those who were already friends before starting a business together need this support most. That is because the demands and expectations placed on each other are often very high. You know each other on a personal level but are not necessarily used to working together. Sometimes, this new context brings out sides of each other that neither person expected. It often comes down to finding the right balance between closeness and distance, and everyone has different needs in this regard. For some, it is too much to spend the entire demanding workday together and then also go out in the evening or share personal thoughts with each other as they used to. For others, this closeness is essential. I would actually advise against co-founding a business with someone you are very close friends with. As you get older, your expectations of others also increase, and your own ideas about collaboration become clearer. That is why younger founders often find it easier – they are generally more flexible.

Even if it is difficult to think about when starting a business, it makes sense to agree from the outset on what the terms will be in the event of a split. Much like a prenuptial agreement, it is emotionally challenging to consider the possibility of an ending right at the beginning. Nevertheless, the articles of association should include a clause outlining the procedure in the event of a split or the death of a co-founder.

Many executives find it difficult to communicate clearly and provide constructive feedback, but both factors determine whether employees perceive the company culture as positive. What are your tips?

It is important to clearly define roles – that is, who decides what and who is responsible for which areas – including responsibility for giving feedback. Feedback is always a sensitive topic. But if you follow a few rules, it can be handled effectively. As a general rule: do not wait too long. Very often, someone notices something they dislike about another person but pushes it aside in their day-to-day work. In most cases, frustration builds up over time. Eventually, all it takes is a small trigger for that resentment to spill out – often at an inappropriate moment and in such an impulsive and accusatory way that it does not help the recipient. Giving feedback should become part of everyday routines, for example, by setting aside a few minutes during a regular team meeting to address it. This way, it becomes normalized and is not turned into a major issue.

The following framework is helpful here. First, describe your own perception: “I perceived your behavior in this situation as ….” You should maintain a neutral tone and avoid generalizations (do not say: “Whenever you talk to customers, …”). Second, describe the effect it had on you: “That irritated/upset/pleased me.” Unfortunately, talking about feelings is particularly difficult for us Germans. Third, connect it to a wish for the future: “I would like it if next time …” This turns feedback into “feed-forward.” You move beyond the specific incident. Positive feedback should also be given in this calm and constructive way. It is about recognition, not praise – which is often interpreted as political or, when expressed with excessive enthusiasm, tends to lose credibility. Institutionalized employee reviews are still worthwhile, however. They should not be used for day-to-day feedback, but rather as opportunities for development discussions.
 

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Last updated: July 28, 2026