The most innovative tech companies today aren’t just inventing new technology, they’re also building totally new kinds of companies. Mature startups like Valve and Github and smaller up-and-comers like Treehouse and Medium have done away with managers who boss people around and expect servile compliance.
Instead, these companies have a flat organizational structure of makers without a middle-management layer. Individuals manage themselves and each other to build awesome things through peer management. These are companies without bosses.
How does anything get done?
I admit that I was extremely skeptical about bossless companies when I first heard about them. But as I worked with and studied innovative companies like Zappos and up-and-comers like Wistia more closely, I saw how their focus on bottom-up company culture drove productivity and motivation without hierarchy and authority.
What’s at stake can’t be understated. As New York Times bestselling author on the future of work, Dan Pink, told me, the most disruptive force in enterprise organization that’s happening today is that “talented people need organizations less than organizations need talented people.” What that means is that to attract and retain the best talent, you have to create an environment rich in autonomy–because talented people don’t like to be told what to do.
In place of hierarchy, authority and control, bossless companies run on accountability, autonomy and trust. People who are stuck on the concept of the traditional hierarchical structure as the gold standard are often buying into a system of a lack of trust, which drives the need to control. Instead, peer management works by entrusting and empowering individuals to control themselves.
How bossless companies do it
1. Information for everyone, not just bosses
The essential ingredients of peer management like trust, accountability, peer feedback, and decision-making autonomy rely on transparency of information. The problem with old school, hierarchical companies is that managers end up operating as obstacles for spreading information freely within a company. And this only becomes a bigger problem as your company grows.
Companies like Foursquare and Buzzfeed use a system called Google snippets, which is an internal database where every employee writes down what they’ve been getting done — as pioneered by Google. In other companies, you may only get the story of what’s happening in the company through your boss, and they have the power to shape the narrative. In companies that use Google snippets, everyone knows what everyone gets done so that you aren’t beholden to your manager for information.
Social media marketing startup Buffer takes information transparency to an extreme. They use iDoneThis to share snippets of what they get done every day, but on top of that, everyone knows everyone’s salary, what everyone is reading, and even how much everyone on the team is sleeping.
2. Peer-driven recognition and accountability
In peer management settings, individuals steer themselves and others, and with that power comes great responsibility to be accountable and take on jobs formerly reserved for managers.
Bossless companies foster that culture of peer responsibility through tools and processes, such as periodic peer-driven 360 reviews and even peer compensation. At Shopify, employees created a system called Unicorn, where they positively emphasize accomplishments at work by giving public kudos for a job well done. Moreover, peer-driven bonuses come out of the kudos you receive on Unicorn. This creates a culture where employees congratulate and celebrate each others’ work — they don’t have to rely on a manager to do it.
3. Strengthen your culture with every new hire
Fit is paramount in peer management because having a bottom-up culture means that it’s all about the people.
Stripe applies what they call the Sunday test: “If this person was alone in the office on a Sunday, would that make you more likely to come in just to hang out with him? We only make a hire if the answer is a strong yes.” Having taken such effort to build a team they believe in, Stripe also allows everyone a veto for candidates.
Innovation and information have trouble traveling through hierarchies and managers, and so the most exciting companies today have chosen innovation over predictability. As former Intel CEO Andy Grove put it, “Let chaos reign, then rein in chaos.”
With peer management, accountability isn’t to a boss or supervisor, it’s to each other, your team, your company, your customers, and yourself. That’s way more motivating than being told what to do. Using peer management to build a culture that enables motivation, autonomy, and purpose makes work fulfilling and joyful, and yields innovative results.