To keep up with our evolution from the manufacturing age to a high-speed world of tech, you need to eliminate all obstacles to rapid growth. Companies young and old are quickly learning that replacing the traditional, top-heavy hierarchy of times past with a flat organizational structure serves growth and innovation with far better results.
To build a company with a mission to challenge assumptions, disrupt the status quo, and build things that change the world, Appster founders Josiah Humphrey and Mark McDonald knew they had to shake up the hierarchical stereotype to succeed.
"Initially we ran teams with the traditional levels of management, but that wasn't working for us. We needed to move faster than the model would allow," says Humphrey. So the co-founders went back to the drawing board and asked themselves how they could build a culture and organizational structure that would powerfully drive their innovative vision.
"We work with tech-based startups and the projects require a lot of problem solving," says Humphrey. "We had to develop an organizational structure that would quickly and efficiently drive these projects, one that people felt proud to be a part of and where they could make their own decisions." As a result, the company embodied a "no manager" approach by constructing "tribes" with full creative and decision-making freedom.
Today, Humphrey and McDonald know that self-managed teams have more ownership and will go the extra mile, garnering far better results for the company and its clients. "Everyone knows their own strengths and operates to their full potential, which significantly improves the team's overall bottom line," says Humphrey. Tribes "swarm" when another tribe needs help to meet a deadline--everyone steps in to help where needed, without a manager standing over employees.
The Appster Way, as they call it, encourages healthy rivalry among employees. Since new tribes are formed for each new project, employees never know whom they will be working with on the next project. Therefore, it's important to get along with everyone and be a good team player.
Naturally, this innovative solution comes with challenges. "We quickly learned that for this to work there could be no politics; no one could play favorites," says Humphrey. They had to find a way to consistently stay on the right track. "We now have metrics in place and we're obsessed with collecting no-BS data."
To do this, Appster uses a tool called 15Five to collect feedback from all of their 220 employees. Employees are encouraged to offer unfiltered feedback on every aspect of the company and each week the founders go through the data, flagging critical feedback. From requests for a coffeemaker to more serious impediments to performance, this feedback and its solutions are addressed publicly. Team members from all four of Appster's locations gather virtually every week for meetings referred to as Time Travel Tuesdays. In these meetings employees hear their concerns being addressed, listen to weekly announcements, and engage in public employee recognition.
"Even the most brutal feedback goes up in front of the whole company," says Humphrey. "We are passionate about how we can improve, and making even negative feedback public is a part of that process. We know that we are not perfect."
I was curious about how employees are given performance feedback and how they felt about future career growth in a hierarchy-free, or flat, business model. Humphrey and McDonald have pre-empted any problems in these areas.
"We've given a lot of thought to how to run HR and decided not do standard performance reviews," says Humphrey. "Tribe members engage in a biweekly or monthly rapid feedback process with someone who showcases a lot of leadership in the tribe. They talk about what the employee has done well and where improvements can be made." Here, the employees discuss career goals as well. "We will never hold our people back," says Humphrey. "Whatever their dream is we want to help them get there. If we really care about them and their future they will invest in us as well."
What are the key factors in making a hierarchy-free model successful? Here are a few tips from the co-founders.
Find incredibly talented people.
“We don't hire on experience and years worked,” says Humphrey. “Some of our young, inexperienced employees outperform the more experienced ones.” Do thorough reference checks and hire people who don't need constant management. Allow your employees to create their own destiny.
Empower everyone to make their own decisions.
Many of the old management techniques don't support rapid growth because it takes so much longer to make decisions and address problems. At Appster people are on equal ground and the elimination of traditional decision-making channels has improved efficiency.
Collect data and make it transparent.
Be relentless about encouraging feedback from everyone and make it public. Authenticity and transparency are critical.
Healthy competition is a natural byproduct of a flat organizational structure. Awards, bonus points, and incentives pay off. Tribes at Appster went as far as to use their own money to buy T-shirts with the company logo and their tribe's name on them. They even designed their own tribe logo!
No need to go totally flat.
Appster has not gone so flat that it doesn't have an executive team. This team takes feedback from other teams, as well as other big-picture actionable items, into a quarterly leadership-team meeting to set priorities for the next 90 days.
Finally, Humphrey believes that people don't leave a company because they hate their job; they leave the job because they're unhappy with their peers or leader. "The fact that Appster employees love to work here--they love their jobs--is our biggest testament to creating this structure.”