Last week, Raw Signal Group’s Melissa Nightingale and Johnathan Nightingale spoke candidly with BetaKit about why they launched an organization dedicated to supporting Toronto’s next generation of leaders. And in a talk at Canadian Tech At Scale, Johnathan goes into detail about how any growing company should think about scaling by explaining common patterns that lead to unhealthy scaling, and how to avoid them.

Johnathan says that startups should avoid getting caught in the mindset that they are too modern and disruptive for hierarchy; what ends up happening is that people end up looking for a structure if they’re not given one.

He gives the example of GitHub, where a flat structure made it difficult to get things done, and it was difficult to report sexual harassment because no one was trained to deal with it.

“The fact that you have to stay up all night worrying about stuff because you can’t trust your managers, is a symptom. How much is that costing your business?”

“When you take away explicit power structure and explicit rules about who makes what decisions, all that happens is people fill in the gaps,” Nightingale says. “Now it’s about who goes on smoke breaks with the founder. It’s about who looks like the founder, went to school with them, or was their roommate. It’s not that structure doesn’t exist, you’re just not invited to be part of it.”

On the flip side, a “matrix” management style that includes functional managers working alongside a set of strategic leads can be too slow.

“It’s totally fair game to say if we’re paying someone to manage a group of people, their job is to make that group of people more effective,” Johnathan said. “Their job is not to be their therapist…it’s often the case that great management of intelligent people involves talking about feelings and sense of direction and where I want to take my career and how I fit into the overall narrative, but your job as a manager is to make your team more effective at the things you need to get done.”

If your managers are good at one thing but not another, adding more layers of management to fix that problem isn’t necessarily helpful. And holacracies, which have teams working autonomously to serve their own goals, can make it difficult when there is a need for alignment across a company.

Johnathan breaks down the fundamentals: everyone has a manager and reasonable expectations for load, and urges organizations to be as functional for as long as possible — that is, organizing by the discipline of people doing the work, like VP of communications and VP of sales. Functional organizations also give people the opportunity to get mentorship for free, as employees can learn from VPs that have been there before.

Johnathan’s final two fundamentals: establish explicit ownership, and invest in leadership development. “When you invest, you end up with a cadre of people spotting problems before they even get to you,” said Johnathan. “Most startups, as they grow, wait way too long to invest in this because of sticker shock. Right now, if you’re not investing in this stuff, it doesn’t cost you anything.”

But, as startups grow, hiring coaches for managers look like a lot — but companies can end up paying for it in operational inefficiency and turnover. “The fact that you have to stay up all night worrying about stuff because you can’t trust your managers, is a symptom. How much is that costing your business?”

Watch the video below:

StartUp HERE Toronto is a publishing partner of Betakit and this article was originally published on their site.