About three years ago, when I first had the idea for my company's flagship software product, ShortStack, I owned a Web design agency and worked with a small staff of designers and account managers. At first, coding ShortStack was a side project, but the technology requirements quickly exceeded my skills, so I had to find a developer to help me finish the project—he actually became the co-founder of ShortStack.
I also had one of my agency staffers dedicate herself to testing the software and devising new features for it. For about six months, it was just the three of us. Next, I took on another developer, and then someone to help with our documentation and customer support.
Yet even as the staff grew—we are now a crew of 14—I was reluctant to have any sort of hierarchy. In the beginning, I simply couldn’t afford to pay manager-level employees. But now I realize that the company and our culture is better because of it.
When I hire these days, I bring on people who have a manager's mentality but a producer's work ethic. In other words, they think like managers and figure out what needs to be done, and then they do the work.
I learned that there's a term for what’s happening here: flat or horizontal management. Let me offer five reasons why it’s a small-business structure worth considering.
1. There's more time to focus on and refine core products, listen to your users and develop new products. Having a flat structure means I spend very little time on HR-related issues, and we don’t need departmental meetings. We have one (brief) staff meeting each week when everyone gives status updates, and I give a general “state of the business” update. The meeting is also an opportunity for anyone to offer up ideas for new product features, content, customer service suggestions, etc.
Our culture is very democratic, and I’ve found that staying flat makes for great communication across the board. Of course I have opinions about priorities, and I sometimes step in and adjust the timing or scope of a project, but for the most part, I’ve found that my team is more aware of what needs to be done and are motivated to do it when they manage their own projects. One of the most rewarding things about this method is that I’m able to discuss a project with one or two people, and a little while later, I’ll discover that it’s done and out "in the wild.” Because of our structure, I don’t need to micromanage this team.
2. This structure offers management-level people the opportunity to keep putting their best skills to good use. When people reach a certain level in a company, they eventually spend so much time managing people that they don’t always have time to do what they were hired for in the first place. I think this is unproductive and potentially results in employees not loving their jobs anymore. If you promote a graphic designer to a management position and she can’t create very often, she might get bored—or worse, quit. I’d rather have my talented people free to continue to produce great stuff.
3. When everyone is a manager, everyone is more productive. Granted, our company is relatively young and small, but part of my flat-management mentality means that we have no formal sick- or vacation-time policies. And I would bet money that my company has fewer sick days per capita than most. The people who work with me are grown-ups—they know how to prioritize, and I don’t feel like I need to ration their time off. So far, the flexible time-off policy has not been abused. In fact, it just reaffirms my belief that employees with a manager mentality, whether or not they have the title, are more loyal and more accountable.
The fact that I don’t have to track these kinds of details also frees me up to track the things that really matter to the company: growth, customer feedback, industry trends, etc. I never want to be the kind of boss who, like one small-business owner I know, uses security cameras to keep an eye on employees to make sure they’re working. (And guess who sits and watches them five hours a day and no longer produces any meaningful work of his own?) There has to be something wrong with the culture he’s created if he has to keep such a close watch on his staff. A better tactic would be to have some trust—then he might see productivity increase.
4. Maintaining a flat-management structure serves as an employee screening tool. I used to believe it was serendipity that brought together a group of people who have the same work ethic, but now I believe that the structure I have in place weeds out the weak. In two-and-a-half years, I’ve had to let just two people go, and it was because they didn’t share the values that I and the rest of the team hold sacred. They weren’t self-starters or problem solvers; they were more comfortable being told what to do.
In an all-for-one environment, it becomes obvious pretty quickly who is pulling his weight and who isn’t. I want people around who don’t want to let their teammates down, as corny as that may sound.
5. Being flat allows for quick decision-making. In a traditionally structured company, the low-level guys—such as customer support staff—are the people who truly have the pulse of a company. They’re the ones who are dealing with customers and who know everything that’s great and everything that’s not-so-great about a company. But if their experiences on the front lines inspire an idea, it’s virtually impossible for it to make its way to the CEO’s desk. Instead, the corporate-level team will come up with some idea and force it down the chain without much consultation. Since we don’t have that type of structure, a customer service person has the authority (and the obligation) to fix, implement and change issues at a moment’s notice. The result is that we’re able to move faster and, I believe, provide a better product.
I've learned that when the “boss” empowers an employee to do the right thing, it gets done faster and the way the customers want it, which makes for happier clients and happier staff. Most of our product features have been implemented from user feedback, but we would never have had that opportunity if the entire staff wasn't on the same playing field.
Jim Belosic is the co-founder and CEO of Pancake Laboratories, a Reno, Nevada-based software company that manufactures ShortStack, software that’s designed to help small-business owners and designers create custom apps that harness the power of social media.
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