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A flat organizational structure: nightmare or dream?

3 years have passed and over 20 people have joined the company since its founders decided to change the organizational structure to a flat one. During that time period we had the opportunity to experience, first-hand, the challenges that were to be faced. Aside from a multitude of undeniable advantages, there were also problems which we had to confront face to face.

TL;DR

We have the courage to go against the flow and show that a company with a flat organizational structure can develop, scale and achieve goals: our own, and those of our clients.

CEO recruitment

Conscientiousness in selecting coworkers is key and originates out of a simple reason: everyone that works at SoftwareMill also plays the role of a CEO. Therefore, aside from programming/graphical/administrative/marketing skills (choose whichever you want), everyone should have a nose for running a business. That is why recruitment in SoftwareMill … takes some time. The multi-stage character and complexity level of the entire process forced us to develop our own set of methods for verifying the candidates. For the company, this means temporarily involving at least 4 people per process. We do not have a dedicated HR department so the interviews are conducted by, inter alia, programmers who will eventually work on a project with the prospective candidate. A flat structure does not limit a company’s development, but only pushes towards a more rational time management and constitutes a driving force for innovative solutions. As a result, specifically for the sake of recruitment, we’ve created HRobot (coming soon!) – a new tool for communicating with candidates, based on the Slack communicator.

Independence

At SoftwareMill there is no option of merely being a “worker” who simply does what their superior tells them to do. This is no place for those who take their responsibilities lightly, suffer from chronic procrastination, or have problems with communicating openly. The concept of a flat company also does not provide for the presence of people who supervise, assess and take responsibility for their subordinates. The lack of managers motivates employees to take matters into their own hands.

If you have a problem with something - you say it out openly and you can expect support, but do not expect that others will do the job for you. We assume self-reliance and a professional approach to the assigned tasks.

Additional duties

Another challenge in a flat organizational structure is being kept up to date. And that does not entail intra-company gossip. It means the ability to manage one’s time and knowledge in terms of information, documents or subjects not necessarily connected to the typical scope of a programmer’s duties. Working at a company with a flat organizational structure means also that each one of us takes part in managing and making decisions, and tackling issues which often prove difficult. These encompass:

  • long-range operational strategy,
  • hiring/laying off an employee,
  • negotiations with the client,
  • entering a new market,
  • investing in R&D projects,
  • adapting the remuneration system, etc.

Before making key decisions, every one of us has to have a full view of the situation. When it comes to such decisions, we devote more time to analyze the issue and consult it in work groups, to finally present a proposition of a solution to be voted on by the company.

Direct contact with the client

It may seem that in a flat company there is nothing but organizational chaos and no one takes responsibility for the results. Clients and contractors are most often used to communicating with managers. At first, the clients might be surprised by the fact that they are talking directly with the team and not a Project Manager. The initial consternation quickly gives way when it turns out that the programmers at our company also have skills and experience in business.

Making decisions

In addition to a flat company structure, at SoftwareMill we’ve decided on operating in self-organizing project teams, which work and communicate directly with the client, and make decisions in terms of executing the projects.

There is no person - within a team - dedicated to managing and making decisions, because at SoftwareMill each developer possesses appropriate competences to talk with the client. Sometimes, a leader emerges among team members in a spontaneous manner, which occurs due to the dynamics of small groups and is completely natural. However, the project team still organizes itself and executes the tasks as one whole. Solutions are created where problems appear, and the flat structure efficiently obliviates the need for Project Managers.

Getting used to a different standard

Maintaining a flat structure given a growing number of employees seems like a daunting task. Often, the employees working at the company for some time are those who the new ones look up to, to validate the correctness of their decisions. On one hand that is quite natural, seeing how the “veterans” are already waist-deep in the company. However, when hiring a new employee, we are actually hiring a managing director. Each person at SoftwareMill is capable of making decisions and should be able to make them independently. Our standard does not always fit what people are used to, so sometimes we have to demonstrate some patience when introducing a new CEO ;).

What makes me (personally) happy, and what I have learned

Despite the fact that the company grows and new people appear, we still maintain a friendly, almost family-like, atmosphere. I feel a personal satisfaction in seeing how our approach towards managing our business translates into financial results and respect in the industry. The lack of hierarchy additionally introduces several less apparent perks that I can enjoy thanks to being a member of SoftwareMill:

  • Full trust in people who are motivated to constantly improve their work. The truth is that it was only after joining the company that I’ve learnt to trust people, their promises and work output. And it goes both ways - the effects of my work build the trust of others.
  • Transparency. Now it seems obvious, but at first I was quite surprised that access to information is so natural and free. Result? There is no babbling or gossip in terms of the company’s condition, new clients, projects, direction of action – it’s all given out openly. And that also goes for salaries. I’ll add, as a fun fact, that we’ve created the company’s system of rises and bonuses collectively. I do realize that not many CEOs decide to do so, and even less open their finances and make strategic information available after a few years of their businesses operating on the market. SoftwareMill is a simple example of how such courage pays off, because …
  • … a flat structure works in favor of a feeling of co-responsibility for the company’s success. Employees actually involved in making strategic decisions are much more determined to achieve a common goal. It may sound like a “startupper’s dream”, but here I started to feel that we are working together.
  • I also admire the courage of the owners. After all, they’ve given the company to the people to be managed by the people ;). At the same time, the owners haven’t forgotten about the company. They are still with us and we work on projects side by side. These are people who keep their feet on the ground, yet still manage to surprise.
  • Self-development as a must. A daily opportunity to learn something new, taking part in a project, organizing events, lectures at conferences, participating in workshops and training courses. Tomek, in one of his posts, counted up the team’s 2015 activity – even we were surprised by the intensity of our actions. And to top it off, there is the possibility to execute our own ideas within of the company. I value this opportunity that everyone here has to leave their comfort zones.

So, from a practical point of view, what does a company with a flat organizational structure mean? That everyone has to regard the company from a CEO’s point of view. Employees themselves define their tasks and scopes of duties. Therefore, the sense of responsibility, self-organization and discipline are key. A flat structure introduces transparency – all employees are free to examine the company’s actions; we can engage in existing projects or execute our own ideas. Initiative and will to share experience and knowledge are praised within the team. In our case, it is also a democracy in which each and every one of us has an equal saying when it comes to making strategic decisions. Such a mode of organization is, for some, the worst nightmare, but for us… a dream come true.

What other challenges do you see facing a company with a flat structure?

How does management look like at your company?