Here’s why we flattened our company

I have been blessed to have spent a majority of my working career as an entrepreneur surrounded by great people.  I’ve spent much of this career reading business books, blogs, and magazines. While there are many different opinions on how to run a business, no matter who you talk to in the entrepreneur or managerial world, they will tell you this: “It’s critical to surround yourself by great people”.  That being the case, as leaders, the next step is to make sure you have done everything in your power to set those great people free to grow the business.

The evolution of Vinasource started as a couple of guys, sick of Microsoft process, who wanted to operate freely and build great, affordable applications for our clients. We were fortunate to find a dynamic, enthusiastic group of developers in Vietnam and we were off to the races. We ran the company loosely, with very few rules, and loosely based process. Once you get into dealing with cultural differences, time zones, communication challenges, and English as a second language you realize process is the key to success.

But having a good SDLC and having a structured hierarchy of team members are very different things. When I was at Microsoft, they went through a realization that most developers are not cut out to be managers, and, in fact hate the routine duties managers are faced with.  So they stopped pressuring devs to move “up” the ladder and instead created an individual contributor track. Even though I was there through this evolution, I found myself making the same mistake again at Vinasource.

Cut to 2011. As we worked to really define our processes in a way that worked for our team and our clients, we started slowly “promoting” developers to managerial positions. By 2012 we had a beautiful hierarchy structure that resulted in us taking 50% of the time away from our top devs who were now managing people instead of pursuing their passion – writing code. As a services business, our three key metrics are utilization, partner satisfaction and team happiness.  We weren’t doing particularly well in any of the three.

My aha moment came when I was reading an article in Inc Magazine titled “It’s Time to Ditch Your Org Chart“. The study on Valve in particular and their Handbook for New Employees really resonated with me and made me think “wow, that’s an awesome place to work”. As soon as I started contemplating the idea for Vinasource I knew it was exactly what we needed to do for the following reasons:

1. Our core team unit was based around a client project, not a technology
2. Most devs don’t like to manage
3. Utilization is a key metric
4. Project team members are better suited to review a team member than a manger
5. “We own our work” is the #1 value in our company.
6. We needed to empower people with the ability to choose their work (project), train specifically for that work, be evaluated fairly on their work
7. We needed people who loved initiatives driving them: The “Champion” was born

So in 2014 we flattened the company. We appointed a managing director to focus on company initiatives. We are in the process of hiring a training coordinator to help people find the right resources they need to get better at their role. We do a quarterly “request process” that allows people to move projects. We focus more on roles and responsibilities within a project team (which fits nicely with the family values found in our culture). We introduced 360 reviews in which each reviewer’s opinion carries equal weight in the final score.

In our company now nobody reports to anybody. A project team has a unified goal each iteration and they work together towards it.  Piece by piece they work to build amazing software for our partners.  We are helping team members understand that they own their career growth and have the companies full support in climbing which ever mountain they choose. While it’s still a work in progress, the initial team satisfaction level, which we measure using a tool called Tiny Pulse, has been climbing each month. I’m excited to come back and post more concrete results once we’ve hit the 12 month mark.

While flattening your company may not be the way to go for you, one thing we can agree on is you need to find good people, then find a way to set them free.

Wipe out the org chart

What Does Transparency and Social Media Have To do With Creating a Strong Business Mindset Across Your Team?

Recently I was interviewed by Entrepreneur Magazine columnist Chris Hann.  The question they were trying to answer was “Do you accept friend requests from your employees on Facebook”. The short answer for me is yes.  The long answer is a bit more involved. I’ve been really excited about a recent move in our company to provide full transparency to our team while teaching everyone what it means to take ownership in our business. At Vinasource, one of our core values is “Build open and honest relationships through communication”.  What this means as company leaders is that no information is kept secret from the team. While some people feel big about privacy, I’m not one of them. In the modern era of social media, it’s a bit of a pipe dream to think you can really keep many too many things a secret. So, why not embrace it! At Vinasource we use social media to expose different parts of our company culture to the world.  This is valuable both for internal participation in company functions and external recruiting. A core competency we measure each month is “Business Mindset”.  Combining this with the value we place on communication, we have embarked on a mission to help our team members fully understand our business.  The first step to this was opening up our financials both at a high level, and at a project level. Currently, we are working with our team members to truly understand what it means to run a business, starting at their project level.  Every project has the core elements of running a small business:

• Team Building
• Client Satisfaction
• Budgeting
• Profit and Loss

By flattening our organization and getting rid of the hierarchical management structure, each team member has more significant roles within their project.  The most important being monthly peer reviews. While we are just starting down this path, I’ve already seen a noticeable bump in enthusiasm.  Using Tiny Pulse we measure our teams happiness and the week after we revealed our first set of financials we saw an immediate spike. Sure, there is probably a place and an industry where it makes sense to have a hierarchical structure and keep separation between your personal and professional lives. In tech though, I think it’s going to be harder and harder to recruit in a closed organization when you are going against forward thinking companies such as Valve, Zappos and Google.