When you're a company of up to a dozen people you can have everybody do everything, from setting a strategy to execution of tactical tasks and performing operational duties. But as you grow to a bigger headcount you need increasingly clear distinction between people responsible for defining strategy, people responsible for executing the strategy, and people for keeping the business running. Because if you don't, you get many confused and disempowered people and a crippled organization where top managers don't have time to contemplate and communicate the strategy, where smart middle managers cannot make independent decisions or their decisions are misaligned with the general direction of the company, and where less experienced/knowledgeable operational people get ambiguous instructions what is expected of them.
In my experience, effective stratification of a company must start from the top with founders and C-level executives restricting themselves in their scope and actions, and dumping their heads to a paper so that everybody in the company can understand their thinking and align with their goals. Especially the last requirement fall hard on founders who usually aren't MBA-trained professionals, but maverick hackers with disrespect for status quo.
(photo by Faith Goble)