Wherever you go, you will hear from founders that they foster flat structure within their companies. The term ‘flat’ has become a trend nowadays, and it appears that everyone is trying to develop a flat structure.
Through my involvement in startups and with large established companies, I have found that most of the founders or managers misinterpret the term ‘flat.’ They consider this term synonym to ‘everyone is accessible to everyone.’ Well, this is just one tiny aspect of the ‘flat’ culture within a company.
In this post, my focus is on startups, because the significance of ‘flat’ structure changes dramatically in large established companies. In startups, I have observed that the founders act in many different ways that create an unintended virtual wall between the founding team and rest of the employees. Such acts hinder innovation and collaboration. Employees stop worrying about company’s well-being. And, therefore, the fundamental objectives of a ‘flat’ structure are not met.
This post is the beginning of a series, which will feature one example of founders’ behavior in every post of this series. Here is the first one.
1. Offering facilities based on ‘employee hierarchy’ rather than ‘need’
Founders have desire to feel ‘powerful’ and ‘exclusive’ within their companies. This desire leads them to lay down company policies that offer better facilities to founders. No doubt, founders deserve great facilities, but barring others to avail great facilities on the basis of employee’s rank sends a wrong signal to the employees. Let me explain with an example.
“In a company, founders structured a policy that allows founders to travel by air, but bars other employees to avail air travel facility within a country where rail and air both are the options.”
In this situation, an employee feels that he is less valued. The outcome of this policy is contrary to the founders’ intentions of making their employees feel valuable. The result is more visible in early stage startups.
You might argue that such a differentiation is made because founders’ time is more valuable than others. But do you also want to say that employees time are less valuable to the extent that they will have to travel 20 hours via rail as opposed to 3 hours via air? Well, you may again argue that the cost of air travel is more than the cost of spending 20 hours in a train by an employee. Ultimately, you are trying to minimize your operational expenses, and you may succeed doing so.
But, I would like you to look at your saving after implementing this policy. Then, look at the intangible (yet strong) negative impact that this policy has on your employees. The intangible effects might be visible in employees performance, their motivation, organizational culture, and similar. You may try to quantify this intangible effect and see the monetary effect. And then, compare these two numbers (cost saving and quantified negative impact of the policy) in a frame of a few years.
Do you really see a gain? If yes, then you should continue with your policy. If not, then you should give a thought to it. Even if you see a gain, if you really want to build an organization with appreciable culture, you should be careful in implementing such policies. You might be right with your policy, but you send a wrong signal to your core and early stage employees. And, the fact is that you will most likely not realize it, unless, after a few years, you look back on the incidences that would have happened within the company.
So, how about creating this policy based on ‘need’ rather than ‘employee hierarchy?’ Or, conveying the right message and making your employees understand the need behind such a policy. Ultimately, you want your employees to take care of your company’s well-being. So, no matter what path you follow, you might like to convey your intention and logic behind your decisions so that your employees could be with you in the journey.
This was just an example to show that founders set rules that directly affect the company culture. In different types of startups, different scenarios emerge and different types of policies require founders’ sincere attention. Founders will just have to think through the fundamental logic behind any policy and, consequently, they will have to step into the shoes of an employee and feel the possible implications of that policy. Otherwise, founders’ will experience the impact of such a policy in many different forms – attrition, low performance, low output quality, and similar others – that ultimately affect company’s health.
I will be back with the second part of this series.