How to trust your employees to make decisions

02 Jan. ‘19

How to build a self-management culture in your company – lessons learned at Mindbox

In May, Mindbox CEO Alexander Gornik conducted a seminar at IT-Agency about self-management cultures at companies. The idea is to enable employees to make important decisions on their own. To do this, you need to correctly formulate your business goals, break down management stereotypes and hire the right people.

Alexander told us how Mindbox works. IT-Agency has some similar elements, but there are a lot of differences.

Self-management is a corporate culture that develops people and delegates decision making. It makes it possible to work with a lower margin and helps to eliminate hierarchy. In such companies, the decisions are made by people who are not indifferent and who are ready to defend their opinion.

Self-management is not anarchy, but rather a strict set of rules

Alexander believes that there are four conditions for successful self-managed companies:

  1. They are profitable.
  2. They allow anyone to make any decision. They do not allow managers or other colleagues to approve decisions.
  3. They openly publish salaries.
  4. They openly publish their P&L.

For a self-managed company to grow, it needs to set goals, eliminate bad management habits and work correctly with the right people.

Setting the right business goals

The main goal in business is to add value, and money is an important metric that indicates how well the business is achieving its goals. For example, Mindbox’s goal is to make retail more personal. The more Mindbox earns, the more personal retail becomes and the more Mindbox achieves its goals. First comes added value, then money: not vice-versa.

To set the right business goals, you need to:

Build long-term relationships with your customers. Companies used to bet on mass sales. For example, Apple sold its smartphones itself. In such situations, it is impossible to be guided by added value, because once the company sells its phone, it no longer cares what happens to it. It has already earned its profit.

Alexander recommends building businesses on a subscription model, retaining the customer as long as possible. Ideally, you give the client a team that will work with them forever. Then you can add tangible value, without adjusting to the client and its values. For example, Apple has introduced its iPhone Upgrade Program, a subscription model that lets clients get a new smartphone each year.

Place added value above profit. Adding value for your clients is simple: you usually need to generate profit for them, reduce their costs or save them time. Employees need to always base their decisions on the value that they are adding for the client, rather than the profit they are generating for their own company. Everyone should constantly ask themselves: «Am I just wasting time?».

«What next?» sounds less aggressive than «Why?» and doesn’t lead to rejection

When a Mindbox employee wants to do something for a customer or the company, we ask a test question: «What pain point are we solving?». If the answer is unclear, we ask a second question: «Can you give an example?». If the added value is still not obvious from the example, we ask: «What next?». This helps to gently find out what the added value is for Mindbox or the customer.

Change management habits

There is a cultural stereotype that management requires prodding. When Alexander became a manager, he surprised himself by starting to think that he should tell one employee «Do A», the next «Do B», and the third «Do C». Why? Because that’s how things are done: that’s what everyone does in life and in the movies.

In his book «Organisational Management Thinking», Georgy Schedrovitsky divides management into three components:

  1. Leadership — imposing one’s own goals and tasks on a person.
  2. Management — influencing a team to change its course. To guide a team toward a new goal, you must clearly understand the purpose and principles of the team’s work.
  3. Organisation — a set of rules and business processes. Setting certain limitations for the team.

When we think about how to manage a team, old stereotypes immediately make us think of leadership. In a self-managed company, leadership needs to be eradicated. Employees need to be involved in management and a bit of organisation.

To eradicate leadership habit, you have to:

Consult and give veto rights. Work is built on the idea that any employee can make any decision. The important thing is to inform others and give them the opportunity to oppose the decision.

At Mindbox, all work is tracked in Trello and broadcast in Slack. For example, say an employee wants to sign a new contract with a customer. They fill out a new card on the «Customer contracts» board, which is automatically published on that board’s channel in Slack. Now any employee can subscribe to it: monitor its implementation, comment or even veto it.

Make business processes transparent. Sometimes, employees have hidden agendas that are contrary to the company’s goals. If these employees make decisions tete-a-tete, it can have unpleasant consequences. To avoid this, business processes should be open and transparent.

Let’s take a look at how bonuses are approved at Mindbox. Employees receive bonuses for posts on the corporate blog. The bonus amount depends on how well the post corresponds to the established criteria.

To receive a bonus for a post, the employee creates a card in Trello: «I want to write this kind of post and get this much money for it. If you disagree or want to add something, do so by this date.» This card immediately appears in the Slack channel, so that anyone who wants to can comment. If nobody comments by the deadline, then the bonus amount is set and the card moves forward. While the card is moving along the board, any employee can comment on it. As soon as it hits accounting, the author of the post receives a bonus.

Solve conflicts. Sometimes, someone is seriously unhappy with something. This is fine as long as employees do not make it personal. Such conflicts mean that the company has people who care what happens.

Sometimes, companies need to solve conflicts with the help of a third party. Special people are hired to do this. They can be at every level of management: from the secretary to the CEO. But even the largest companies tend to limit to four levels.

Ban Gantt charts. You don’t need to waste time and energy on a Gantt chart to get something done. The plan will change anyways. It’s enough to see the goal and the next step.

Stop assigning work. Mindbox does not have leaders who assign work to subordinates. There are customers who add work to the pipeline. That is, they add it to the first column of the corresponding board in Trello. From there, someone who is responsible for the work on that board will deal with it.

For example, Mindbox currently has one office manager who is responsible for work on the «Office» board. If we get a second office manager, nothing will change in the workflow: they will simply take work in turns, or whoever is free will take the new work.

A second important point: the person doing the work sets their own deadline. The customer can challenge this, but by default the work is always added to the pipeline and the person who takes it sets the deadline. This upends the traditional management model.

Hire the right people

When you build a self-managed company, you are faced with a problem: where to find the right people. Nobody can facilitate a conflict. Nobody combines modesty and ambition. If a person is not ambitious, they don’t need anything. If they are not modest, they begin to lead rather than manage.

To find the right people, you need to:

Build a growth culture. You need to look for people who understand that self-management is the right culture and create an environment where they must improve. All change comes from self-improvement. It’s hard, people don’t like it, but it’s the only way. The culture of a self-managed organisation should constantly push people outside their comfort zones so that they have to overcome challenges and grow.

Facilitating conflict is sorting things out by hearing both sides’ arguments

Hire people with the right motivation. Many people are motivated by money and power. This is bad motivation. The people who join Mindbox are motivated by importance and interest, modest and ambitious at the same time.

To understand whether someone is a good fit, one question often suffices: «Tell me about a time when your work was interesting.» You’ll hire the right person 70% of the time. You can also ask: «Tell me about a time when your work wasn’t interesting.»

The best employees underestimate themselves

Foster independence in people. Every new hire has a mentor who keeps an eye on them and helps them avoid mistakes. While the person has a mentor, they should tell them about all their decisions. But the mentor is not a boss. They just help the new hire become independent.

When the new hire becomes a mentor themselves depends only on them. Power is not given, it must be taken: you need to step up, say you’re ready and can do it yourself. People usually have a good feel for this moment, so conflicts don’t arise.

Give raises for accomplishments. If you want a raise, you have to accomplish something and outline a plan for future growth.

Possible accomplishments include completing projects or training courses

When an employee feels that they’re ready, they create a card on the right board in Trello. They note their achievements since their last raise and future plans on the card. Then they tag the people from whom they’d like to get feedback. Based on the feedback, they update their growth plan and move the card to accounting.

If the whole company is motivated and result-oriented, it doesn’t experience conflicts from feedback. One of the reasons is because feedback is given carefully and tends to be politically correct. People often write: this is good, but that can be improved.

This kind of process gets people out of their comfort zone and encourages growth. You can always see what an employee promised to do and what they actually did in their archived cards. It’s a sort of plan/actual comparison that calms tempers and stimulates people.

Appreciate people who don’t want to grow. There are people who do their job well, get paid, and are happy. These are valuable people, because they just do their job well.

Now, it’s another matter if they suddenly stop fitting their role. Then you need to think about development. If they don’t want to grow but are not coping with their responsibilities, that’s grounds for dismissal. But if an employee is doing a great job, let them do it.

Dismiss by promoting. Sometimes a person’s ambitions don’t match their abilities. They don’t understand it and demand a promotion. Don’t stop them – promote them. At some point, everyone will understand that they aren’t coping and need to be dismissed. But sometimes the employee suddenly copes with the new challenges – it’s the coolest thing.

Source: IT Agency Academy