Nilan Peiris, vice president of growth at TransferWise, laughs when it’s suggested the company is one of the UK’s successful examples of a self-managed company. “It feels a bit like organised chaos sometimes,” he says.
Organised chaos it may be, but flatter workplace structures are gaining popularity across the world. AirBnB, Spotify, Buffer and Zappos, are all moving towards similar models. GrantsTree have gone so far as to let employees set everyone’s salaries, including the director’s.
It’s a trend that is being led by the fast-moving technology sector, but is by no means limited to one industry. The traditional top-down pyramid structure that employees climb as they gain experience is being replaced by self-managed teams, a holacracy where there is no designated boss, and agile organisations that are constantly innovating their processes or products.
At TransferWise, the company runs autonomous, independent teams that each work on a different business function (currencies, verification, user experience, etc) and set their own quarterly goals, but are guided by KPIs set by a management team. New staff members are not hired for one particular role but are coached “to find where they can have an impact”.
The fact that the teams are independent means that all of the necessary expertise lives within one unit to solve an issue or deliver an enhancement. It has proved an efficient way of working. TransferWise is only five years old, but already has 600 employees (up from 60 three years ago) and manages transfers of £500m per month, across 35 currencies.
“The ownership you gain from the teams is not something I’ve seen anywhere else,” Peiris says about the upsides of working in this way. “[You gain] agility, because you don’t really need to talk to anyone outside your team to get anything done. And speed – we move very fast as a consequence.”
Speed is a real competitive advantage in the modern marketplace. Unlike in the industrial age, when customers purely wanted goods to be consistent, there is an expectation today that everything is being constantly improved. An abundance of customer feedback is on offer via social media, and brand loyalty is easily swayed.
A top-down organisation, by design, makes decisions slowly and is not quick to respond to these insights. In a flatter structure, it’s those closest to the customers that make the decisions. Buffer executive, Leo Widrich said of the company’s move to remove all managers and bosses: “Almost immediately, people on the team, myself included, started to come up with ideas for processes and regulations ... This seems so incredibly natural for us to do.”
But a flatter structure, leaves very little room for promotion. Arwen Smit is 25 and works for tech startup, Rebel Minds, in London. As the company’s head of growth, she admits: “What the next step will be is rather unclear.”
However, she’s extremely happy in an environment where employees can choose their own hours, have unlimited holidays and work wherever they like. It benefits colleagues with children and those for whom the traditional nine-to-five model doesn’t work. “It’s a very agile way of working. I also think it’s very good for morale, our team definitely puts in more hours than at other agencies.”
But she admits that this structure doesn’t suit everybody: “Some people just become miserable. You have to be conscious enough of your own qualities, know what you can bring to an organisation, and then add value to it in your own way. That’s a completely new way of approaching it.”
At Deeson, a web development agency in Canterbury, owner Tim Deeson says culture is a real consideration in interviews: “We always say upfront that if pay’s your primary motivator, you’re probably not a good cultural fit and we’re not a good fit for you. We look at the package of how you work and how you choose to live.”
Deeson offers its staff freedom to set their own work schedules, paid leave to work on their own open-source projects, a mandatory five week sabbatical every five years, and unlimited training budgets, which encourages the team to keep learning.
Professor Julian Birkinshaw from the London Business School and author of Reinventing Management says that intrinsic motivators – self development, doing meaningful work, and working with interesting people – have surpassed extrinsic motivators, such as pay and promotion, for many jobseekers, particularly millennials.
“They’ve grown up in a very well off world and don’t need the security from joining a company and staying with it for 35 years. They’re also looking for work that has some sort of purpose above and beyond what they are earning.”
And while the notion of career development may have changed, Birkinshaw says it still exists: “You are celebrated for what you know, rather than the number of people that report to you. And the notion of the professional freelancer is a booming market.
“It’s happening in law, accounting, medicine, banking. A lot of the professions are creating these hybrid mechanisms whereby professionals can take charge of their own destiny.”
