Here’s how our startup is challenging the top-down managerial structure with a new system for autonomous, agile, and inclusive decision making.
When our startup was only 10 people, we made decisions as a team and it felt fantastic. We would sit around a table and tackle our biggest problems with everyone present. Each of us directly influenced the success of the company on a high level. But then we doubled in size over a period of just a few months. Suddenly it didn’t make sense to include everyone in every decision. Team meetings were chaotic, with the loudest voices prevailing. When we instituted a democratic voting system to bring order to the chaos (a modified version of Robert’s Rules of Order) they became long and exhausting.
As we suspected, we quickly hit the point where we had too many chefs in the kitchen. At the same time, our team was reluctant to give up the ability to influence important decisions. We didn’t want to give all the power to one individual or a set of managers — part of our strength had been in our group problem solving, as well as in the ability of teammates to act autonomously and quickly when they saw an opportunity to move the company forward.
This was our challenge a few months ago: to come up with decision-making guidelines that balance inclusion with efficiency so everyone still has the chance to make an impact while growing the company in a quick and agile manner.
A year later, we’re nearly triple the size we were when we sat around that table making decision with an entirely flat structure. And we’ve finally devised a system that allows TINT employees to feel empowered and autonomous, is inclusive of other teammates, while being efficient with solutions.
We didn’t get there overnight, and we are far from being finished. Part of what allows this system to operate is our company values, and a general agreed upon guideline that we learned from our friends at Expensify — “Don’t be that person that ruins it for everyone.” In this case, it means follow the guidelines, don’t abuse the system, and when in doubt, get feedback from colleagues.
Our New System
Below is the document we use to guide our decision making. We broke decisions down into five types of decisions:
Personal decisions that can be made alone (remember, we always encourage employees to talk to a teammate for feedback);
Department decisions that can be made within a department without bringing it to the whole team (we leave the structure of department decision-making up to the department);
Committee decisions which can be made by inter-departmental committees convened to dive into a particular issue and make an informed decision on behalf of the team. This can range from fundraising to new hires to pricing changes;
Co-founder decisions where the three co-founders handle sensitive issues like promotions or firing (though we know eventually we need to delegate this responsibility to directors or people who work most closely with the relevant hires/employees);
and finally, the rare All-team decisions where we still democratically vote on proposals, though Ryo, Nik and I always have the power to override the vote as co-founders if need be. It’s our own little system of checks and balances. 🙂 Most recently, we used this system to make a decision about changing the waiting period for new employees before we calculate them into our employee bonus pool.
Here’s our actual internal document, which we use to determine which decisions fall under each category:
Types of Decisions
- Personal Decisions
If the answer to all of these questions is “yes,” you can make the decision independently:
- Will this cost less than $500 one time unbudgeted?
- Does this offer clear benefit to the company?
- Would I happily write an email explaining my reasoning to the team?
Examples: SaaS tools < $500 total, gifts for employees, application licenses, personal office improvements, vacations < 1 week.
- Department Decisions (sales, marketing, engineering, design, operations) (if yes, you can make decision with department)
If the answer to all of these questions is “yes,” your department can make the decision:
- Will the proposal affect a singular department?
- Will this cost more than $500 that is unbudgeted for the department?
Example: Large server investment, department process improvements, hiring part-time/project consultants for design team, attending conferences, hackathons/offsites, investing in PR firms for marketing, purchasing leads for sales, taking time off (vacation > 1 week should be discussed with department so they can cover you).
- Committee Decisions (cross department committees) (if yes, you can make the decision with committee?
If the answer to any of these questions is “yes,” a committee should make the decision:
- Is this a big deal?
- Will this significantly affect all of our customers or the business?
- Will this cost more than $5,000 that is unbudgeted?
- Will the decision be better made with people outside your department?
- Will this include bringing someone onto our team?
Example: Hiring full-time team members, international expansion proposals, changing pricing, product feature specs, increasing budgets.
- Team Decisions (these examples are explored in committee and voted by team after)
- Will this affect our overarching company culture (internal operations)?
- Does this involve work/attention from all team members/team effort?
Examples: Compensation formula changes, cultural value additions/changes, investing/moving to new office, internal operations, devising business vision.
- Special (Cofounder) Decision (these examples MAY be explored by committees and MAY be polled by team, but final say goes to cofounders)
Examples: firing, promotions, sensitive employee topics that deal with employment / compensation / feelings, fundraising, acquisition.
After reading these 5 ways we make decisions, you may have many questions relating to how personal decisions are conveyed to others, how department decisions are voted on, how committees are formed, how committee members are picked, how committees run, veto-powers, etc. The answers to these are for another blog post (so I can share in-depth each way to make decisions), and if you’re interested in reading it sooner than later, tweet me @timsaekoo to let me know!
Like I said, these decision-making guidelines are by no means perfect. In fact, we’re constantly revising them as it was agreed by our team this is a living document, hence, they are called guidelines. But they are so important because without these, chaos ensues. If employees do not know how to make decisions, efficiency goes down, miscommunication goes up, and momentum stalls.
Autonomy, Mastery, Purpose
If you are facing this challenge now or soon, and you practice a culture of inclusion and empowerment for employees like we do, here is my best tip: A M P. Autonomy Mastery, Purpose.
Autonomy – the urge to direct our own lives.
Mastery – the desire to get better and better at something that matters.
Purpose – the yearning to do what we do in service of something greater than ourselves.
Balancing these 3 factors when creating your own decision-making guidelines is the key to motivated and creative employees, which can in turn lead to a successful company. I stress ‘balance’ because practicing them in extremes will clash. If you give full decision-making autonomy to everyone, then some may feel they don’t have the opportunity to ever master skillsets by participating. If they don’t feel like they can ever master skillsets, they do not feel like they can achieve their purpose they set out to achieve.
Challenging the Norms
This is how we make decisions right now. It does challenge the traditional managerial hierarchy and top-down decision making. It may change in the future with more people, just as we had to abandon our ideally flat org when we grew past ten people. More experienced entrepreneurs than I have advised me that this is inevitable as we grow. But before we accept that, I want to explore other avenues that maintain our flat structure and allow for inclusion and efficiency in our operations and decision-making.
This is where I need your help.
How does your startup or company make decisions today? What are the pros and cons you see with those guidelines or structure? I would LOVE to hear your ideas and challenge the societal norm saying that hierarchical ladders and top-down structures are the only way to do this. Tweet me @timsaekoo to discuss, or email me to meet up and brainstorm.