I once watched a CTO write a product requirements document on a Sunday afternoon. He was good at it. The requirements were sharp. The team would build the right thing on Monday. The board would have congratulated him.
He was also the most expensive person in the company. And his job was not writing requirements. His job was the architecture, the roadmap, the senior hires he had not yet made.
The reason he was writing the doc was that nobody else could. The PM seat had been empty for six months. The team kept asking. The CTO kept stepping in. The board kept noting that “product is on track” because the CTO was on it. Nobody looked at the cost.
This pattern shows up in every scale-up I have ever seen. A senior person doing junior work because the operating model has a hole and someone has to fill it. The org chart says one thing. The actual work says another. The gap between them is licence slack.
The phrase comes from medicine. A consultant working at the top of their licence is doing the things only a consultant can do. A consultant filling in a discharge form is below licence. The discharge form still needs to happen. But the consultant should not be the one doing it.
The same idea applies inside a business. Every role has a licence. The CFO’s licence is the financial strategy of the company, the capital structure, the relationship with the board on numbers. The CFO chasing an unpaid invoice from a customer is below licence. The work still has to happen. Someone has to do it. But not the CFO.
Org charts cannot tell you whether your senior people are at the top of their licence. The chart tells you who reports to whom. It does not tell you what each person actually spent the week doing. For that you need the operating model.
In the operating model every workflow has a named owner. Not a department. A person. The owner is the one accountable for that workflow producing what it is supposed to produce. The work itself can be done by anyone qualified. The owner is the one who has to fix it when it breaks.
The acid test is a question every chair should be able to ask after the operating model is on the wall. Pick your three most senior people. Look at what they actually did last week. How much of it was work they were the only person in the company who could do?
In a healthy scale-up the answer is most of it. The CEO is in front of board members and key customers. The CFO is closing a financing round or preparing a capital structure decision. The CTO is hiring senior engineers and signing off the architecture for the next twelve months. None of them are writing requirements docs or chasing invoices.
The under-priced lever in a scale-up is not adding senior people. It is freeing up the senior people you already have.
In an unhealthy scale-up the answer is almost none of it. The CEO is in the weeds on a deal. The CFO is reconciling a spreadsheet. The CTO is debugging. Each of them looks busy. Each of them is producing output. Each of them is well below licence. And the work that only they can do is not getting done.
At Lumeon the COO role existed to build and maintain the operating model itself. The COO was the oil that let the engine run freely. Every workflow had a named owner. Every owner had what they needed to do the work. When friction showed up, the TOM surfaced it before it ended up on a senior person’s desk.
At Apertio the product team was led by a former army officer who had been a product manager for years. He took the requirements work, the prioritisation calls, the engineering trade-off conversations. The CTO did not write requirements docs on Sunday afternoons. He hired the next senior engineer instead.
The under-priced lever in a scale-up is not adding senior people. It is freeing up the senior people you already have. The TOM is what makes that visible. The chair asks the right question once a quarter. The CEO answers it honestly. The work moves up.
A scale-up that runs at the top of licence ships strategic moves faster than a scale-up of the same size that does not. Same headcount. Different output. The difference is the operating model.
The org chart tells you who reports to whom. The operating model tells you whether they are doing the right job.
For a worked example of the operating model with both overlays, explore the interactive target operating model.