Many entrepreneurs resist the strictures of hierarchy, and I am no exception. We want the best ideas and actions to come from anywhere and take flight. In my experience, hierarchies limit people, keeping them at prescribed levels and often times preventing them from thinking bigger or stretching beyond their comfort zones.
When I started my business in 2006, I wanted “flat,” open-ended management for our team, unrestricted by rigid reporting structures and processes. I wanted us to function with the scrappiness, flexibility, agility, and sportsmanship of the softball teams I played on throughout my school years and beyond. No single person on the field is more important than another. A team in the zone produces results that far surpass those of any one individual. If the centerfielder needs to cover second base during a routine play or the pitcher needs to line up a relay to the plate, she does so. Every person contributes in any way they can.
Unlike Mark Zuckerberg, I didn’t wear a hoodie and prowl the office with a samurai sword in DGC’s early days,but we were (and still are) similarly fun-loving, informal, highly energized, resourceful and very scrappy. We laughed loudly and often and still do. When people are bright, motivated, self-starting, accountable and entrepreneurially spirited, they can work well and effectively without a lot of stifling managerial layers.
Starting my own business was exciting, fun and scary. Any scintilla of familiarity was comforting, and I tapped friends and relatives as my first staffers to help me chart these new waters. My uncle was my business lawyer. I paid a girlfriend who was out of work to organize all of our files and magazines. Even my mom came in on a few occasions to help set up and organize our first office.They all contributed to building a loose operational infrastructure.
As we grew, I learned that all the hierarchy and process I’d been resisting actually created some blind spots that would need to be addressed to yield ongoing growth.
Over the years, I’ve read lots of business books, many of which purport that the team that takes the company from $0 to $5 million may not possess the skills and experience to get it to $10 million and beyond. For any business to grow, it must continually invest in resources, advisors and talent with ever sharper skills and deeper experience.
Once I came to accept these realities, I began to invest in talent with new skill sets and different backgrounds that were better suited to manage the company’s long-term growth and push it further. I hired DGC’s first president and conceded to the implementation of processes and personnel structures, which our new breed of talent desired. In other words: hierarchies.
Investment spurs growth and vice versa as noted in a 2015 survey of small business owners. Fifty-seven percent of respondents expected their companies’ revenue to grow this year, and as such, 38 percent said they planned to add staff.
As much as our teams loved not having hierarchies, they did want to know who their direct boss was. Who was evaluating their performances and providing counsel as we began working with sophisticated and savvy Fortune 500 clients? We needed a structure and titles that reflected those of our client executives who grapple with complex business challenges.
In the past nine years, I’ve learned that our growth also made our business challenges more complex, necessitating an investment in more specialized (and more expensive) legal and financial counsel.
Almost suddenly, we felt less like a start-up operation and more like a legitimate business because we had an A-team with diverse sets of skills that expanded our offering. As nice as it is to be able to hire friends and family, I learned that it’s not a sustainable business (or emotional) practice over the long term.
If you’re in the early stages of a business you started, keep in mind that we all have blind spots. Think hard about what yours might be, and talk to a trusted business advisor about how to address them over the long term. The success of your business depends on it.
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