In hierarchical organizations, levelling up is fairly clear–it means moving up the ladder from one position to the next. Those interested in doing so have a clearer path (although it’s not easy) to more responsibility. Hierarchies with lots of levels have all sorts of issues, but they do make levelling up more obvious.
Startups are usually fairly flat. At the very beginning there’s almost no structure. You start with (+/-) a couple founders (I think two or three is ideal). When you start hiring, you have two levels, and eventually you add some additional management (usually at the VP or Director level). Finally as the team scales, you may add Team Leads as well. So at most you’re looking at four levels of hierarchy, but you could very easily scale with three levels too (CEO -> management -> everyone). A flat organization should help with increased communication and transparency, but it does make levelling up less clear. Where is someone supposed to go? And by extension, how is someone supposed to get more responsibility?
People who work in startups are often quite loyal. They care about the company they work for. You don’t always see that same level of loyalty and caring in larger organizations. But people also care about their careers. And they should. People need to look out for themselves and plot a career path that they’re interested in pursuing. This can be challenging at startups when there are no new or more senior roles to jump into. Although job titles still hold weight (let’s be honest, you want your LinkedIn profile to show a progression), what the best people really care about is increased responsibility. So how do you give it to them in a flat startup?
The answer lies in giving people more ownership. For a product manager this might translate into ownership over a part of the product, or a major project, or a key metric (or all three). For an engineer this might translate into the exact same things, but could also translate into other areas such as code quality, improving communication between QA and engineering, etc. Giving people more ownership immediately increases their responsibilities, regardless of the startup’s hierarchical structure. The more ownership and responsibility you give someone (who wants it), the more eager they are to make things work and the more passionate they’ll be about what they’re doing. Value goes up (for the employee and the whole company), and happiness goes up too. It’s a win-win. Plus, that person is also levelling up (regardless of title), and that helps satisfy their career path objectives.
The only way to give people more ownership is to be a bottom-up organization. Founders and senior management have to be able to give up responsibility and transfer it to others. Founders and senior management have to trust that their employees will figure things out and make (mostly) good decisions. (Let’s face it, founders and management don’t always make good/the right decisions either, so assuming that others can do so 100% of the time is insane.) And when mistakes are made, they’re corrected and thought of as an opportunity to teach and learn, not punish.
When you start a company, you and your co-founders own everything, but as you hire people it’s critical that you pass some of that ownership on to your employees. Ultimately you’ll have no choice because your responsibilities as founders (and eventually senior management) will also be changing, scaling and levelling up. The CEO can’t own the roadmap anymore, quite like he used to, because he’s now got 25 people to manage and he’s out raising the next round. The CTO can’t be committing as much code as she used to, because she’s figuring out how to make sure the architecture will scale in 6+ months. If you have a very top-down approach to management and decision-making, a flat structure isn’t going to save you. It’ll get decisions down to people quicker, but at a certain point you (as the founder / founding team / senior management) become a bottleneck. On top of that, you’re not giving your people enough ownership and responsibility to level up.
The CEO of a scaling startup owns a lot — the company’s vision, mission/purpose, employee happiness, financing, recruiting, overall direction, and ultimately they’re responsible for the entire startup’s success or failure (yup, it still rests on the CEO’s shoulders) — but everything else needs to be “outsourced” to team members. There are two things to think about when giving up this responsibility and putting ownership into the hands of employees.
First is accountability. Team members that want ownership and responsibility also need to want accountability. If people want more ownership and responsibility but can’t handle what comes at the end (because it’s not all rosy), then they’re not ready. So this is the balance that startup founders and CEOs can offer: “I’m willing to give you this project, you own it, but you’re now accountable for the results too.” The best people will thrive on that.
Second, spend more time with your people. Accountability is great, but it can be a heavy price to pay if it only comes at the end of every project. That’s no way for someone to learn along the way, pivot and improve. I’ve messed this up a bunch of times. I would hand over responsibility for a project, disappear (I was doing stuff, honest!), and only reappear when I assumed the project was done. Then if there was something that I felt was wrong or not good enough it made for a very difficult conversation. Part of being a leader (of a scaling startup) is investing more in your people. And this investment only increases as you add more people (which means pushing more responsibility to your people so you can invest more in them, and so on…) You have to help people understand expectations and what responsibility + accountability really means. You have to help them level up, they can’t do it alone. I’ve gotten better at this over time (I think!), but it’s something I have to constantly remind myself of: you can’t just give people more responsibility without the tools to succeed. And in this particular case one of the key tools is time with the CEO/founding team/senior management.
A lot of founders start as control freaks and need to learn to let go and trust others.
A lot of founders start as doers but need to grow into leaders. Not that leaders don’t “do”, but really their job is to enable other people to.
Top-down decision-making and management may work for awhile. There are times and situations where someone needs to take the proverbial bull by the horns and say, “This is what we’re doing, let’s go!” But for any significant period of time, I believe this fails. Very few people want to be a cog in a machine. Very few people want to be told precisely what to do. They want to be challenged. They want to be given problems so they can find the solution. They want ownership so they can feel proud of their work and care about it. They want the responsibility that comes with that ownership and the accountability, so they can improve and level up (even if levelling up doesn’t mean moving up a ladder). If you don’t level up your people through responsibility and accountability they’ll lose interest and leave.