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At Yellowfin, we continuously experiment with our organizational structure. This is driven by our desire to constantly look at how we motivate people and improve how decisions are made.
For background – about our organizational structure
Philosophically, Yellowfin is about creating value, continuous learning, and efficiency. These principles have driven how we structure our organization.
For example, I believe that most value is created by the people at the edges of the organization. As a result, we want to drive decision-making and action to the edge of the business. As CEO, I shouldn’t hold all the decision-making power. In fact, if people ask for my approval I often believe it’s because they’re not doing their jobs or they’re in survival mode and don’t want to be caught out.
My opinion is that most traditional organizational structures are hierarchical, approval-driven, and bogged down by delegations of authority, paperwork, and bureaucracy. These processes have been created to ensure individuals survive within the organization. Survival becomes the modus operandi rather than actually delivering value to the business.
At Yellowfin, we want an organizational structure that encourages everyone to contribute. That’s why we’ve removed as much of the bureaucracy as possible, allowing people to just get on with their job without the fear of failure. If mistakes are made along the way we will all learn from those – we don’t typically fire people for making mistakes at Yellowfin.
We’ve conducted several experiments to help us try and bring our philosophy to life.
Experiment one: I resigned as CEO
One of our successful experiments involved my role – I resigned as CEO. My role had become an internal approval engine, and I felt that cycle needed to be broken. So I told everyone that I just didn’t do that any more. Internally, I was no longer a rubber stamp. Leaders needed to make decisions, rather than abdicating responsibility up the tree.
This experiment has worked well and has been effective in achieving its outcome. I now have more time to contribute to the business, which is in line with our core philosophy. We want everyone to be a contributor to our teams and that includes the CEO. Now I am able to contribute to the teams where I can add the most value.
While there’s some aspects of my role that I can’t resign from, like my responsibility to the board and fiduciary responsibilities to the organization, internally I still continue to remove myself from some functions that are traditionally viewed as the role of a CEO.
Experiment two: Holacracy
We have experimented with the concept of self-managed teams that is essentially a form of holacracy. When we first implemented self-management there was a perception that individuals suddenly had the right to do whatever they wanted (which wasn’t what we intended). This misunderstanding was partly a result of how we communicated and rolled-out the experiment.
In reality, self-management is about the team not the individual. We wanted people in the organization to think about the goals of their team – what is the team trying to achieve and how do we optimize the team’s experience.
This proved to be challenging for many, perhaps because people are fundamentally comforted by the concept of hierarchy. Some people don’t necessarily want the responsibility that comes with true self-management.
While much of the experiment in self-managed teams didn’t work, we did take away a valuable part of the process – the advice process. The advice process is based on the premise that an individual doesn’t have the right to change the way other people within the organization work without asking their advice. This is very different from many traditional organizational structures, where an ‘expert’ might come in and unilaterally disrupt and change the way everyone works.
This approach also requires the team to consider the impact the change will have on other people within the organization. This is fundamental to Yellowfin’s culture. If you’re not talking to your peers and other teams and thinking about how they’re impacted, then you’re not really behaving like you’re part of the organization.
While self-managed teams didn’t work for us initially that doesn’t mean we won’t try it in a different format at another time. For the moment, we’ve found a middle ground with the advice process and that’s been really successful.
Experiment three: Removing leadership meetings
One more experiment that is still ongoing is our ban on leadership meetings. Most corporate organizations require their most senior people – those with the most experience and who understand their industry the best – to spend all of their days in meetings achieving pretty much nothing.
I think these people should be working with their teams, leading their teams, and actually delivering on results. So our leadership team doesn’t meet as a group.
As a result of this experiment there are now a lot of one-on-one conversations across the company. This has increased the level of engagement between individuals. If we need to communicate or update people en masse we can use our blog and people can read it at their leisure.
This has been one of the most difficult experiments to implement. When senior people enter our organization it can take a while to deprogram them. Meetings provide comfort and give some people structure over their work day. Without meetings, senior leaders have to think about how they are going to contribute. And contributing is actually hard work – you’ve got to think about it and continuously reinvent yourself as a contributor.
Finding our path forward
In the end, each organization needs to find where on the continuum suits them. These principles and experiments have worked for what we’re trying to do, but I wouldn’t be so bold as to suggest that they’d deliver the same results in a different organization.
Ultimately, we often receive feedback from our employees is that our culture is one of our key differentiators. They value our culture, and we’re constantly thinking about how we can optimize it. It’s a philosophical way of running a business, and that’s what really makes Yellowfin different.
Find more of CEO Glen Rabie’s stories of how he built Yellowfin BI, mistakes made along the way, and a few gold nuggets of wisdom on Yellowfin’s YouTube channel.