BusinessHow permissionless organization design helps your company

How permissionless organization design helps your company

How do you make sure you discover the next Tony Fadell, who is already on your team? With a permissionless organization. The advent of machine learning and AI is allowing more companies to have the opportunity to embrace the permissionless org—and they must, I believe, if they don’t want to be left behind.

A permissionless org pushes decision-making out to the farthest edges of your organization, capitalizing on the scale of ideas you already have. It empowers the people removed from the C-suite to make decisions and seek new opportunities to improve the business—without requiring approval. Said another way, it means, “Follow the talent.” It empowers your team to run experiments in the firm, and creates an environment of innovation where your team decides the where and how of projects and mandates. In an era of more and more silicon staff, the opportunities for your team to flourish are endless.  

Software companies like UiPath are at the forefront of this silicon staff movement, and enterprises are adopting their tools exponentially; UiPath’s revenue has grown from $1 million in 2015 to $600 million in 2021. It’s easy to see why, with the tagline “We make software robots, so people don’t have to be robots.” UiPath handles “RPA,” or robotic process automation. An example is automating routine financial systems using AI. We can think of these AI systems as silicon staff; they don’t require HR and their offices already exist in the cloud.

Silicon staff translates into opportunity redistribution. Scarce talent can focus on the novel, transformative work and leave the monotonous tasks to the automated systems. Companies that ignore the benefits of permissionless org are investing in a tremendous resource (humans) while not getting anywhere near their full benefit. Top talent are abandoning companies in place of modern organizations that offer greater freedom to do the work they love. It’s critical for leadership to enable them now if they want to be ready for the future.

The permissionless idea came to me early in my career after reflecting on my first company and realizing I did it all wrong. I didn’t leverage the potential and let those working for me flourish. I realize now this is a differentiator; that for ideas to transform from flames into infernos, people need ownership of their ideas. 

One of my companies grew 4,971% in its first five years and had an unheard-of talent retention rate by trusting people to do fantastic work as they saw fit. We didn’t even have a CTO, as we felt they would get in the way. In that company, a permissionless team built a product called Missions that was eventually acquired by Slack. A mini CEO (think: a superpowered product owner with executive instincts) naturally emerged, guiding the team in the product journey. No KPIs or focus groups determined what to accomplish; it happened organically due to the lack of permission required. All it took was a thoughtful presentation aligning their vision to the company’s vision, and they were off to the races. 

There are three key benefits to embracing the permissionless org beyond the obvious financial benefits, but, as we’ve heard time and time again, keeping the talent happy keeps a business healthy:

  1. It allows humans to shine where they are uniquely human, while augmenting their work with silicon staff.
  2. It increases autonomy, ownership, and entrepreneurial thinking.
  3. It lets the voice of talent be heard in the oft bubble-wrapped echo chamber of C-suite.

If you want to benefit from a permissionless org, a Permissionless Innovation Process (PIP) is an easy first experiment. The idea is simple: Senior leadership sets the budget, but the talent sets the agenda. Here’s how it works:

  1. All talent is asked to pitch their idea. It can be something like rolling out slack, all the way to a new digital business model.
  2. The talent who created pitches then pitches to the whole team.
  3. Talent who did not pitch then votes for their favorite ideas.
  4. The winning pitch gets the time and resources that have been approved to build their idea.

So, what does this do?

  1. As business leader Andy Grove said, “Snow melts from the edges,” which gets the voice from the edge right to the center.
  2. It engages the entire company.
  3. It yields a feeling of genuine autonomy. Talent has a chance to win the pitch and advance the organization’s mission in a novel way.

Wait a second . . . doesn’t this just devolve into chaos? How does this line up with a corporate strategy? This could only work at startups! These are the most common objections I’ve been presented with when I bring up the idea of a permissionless structure. We have to remember that permissionless doesn’t equate to anarchy. I’m sure you’ve seen the videos of the Southwest flight attendants personalizing their routine safety demonstrations. They still adhere to the stringent criteria of what has to be said. Yet they have the freedom to deliver it in a personalized way. This is a subtle way to push decision rights out to the company’s edges.

So, how do you know if you are ready for a permissionless org? There are some criteria:

  1. It is an organization.
  2. It employs people.
  3. The technology could have a profound impact on your business.
  4. You believe that you are not always the most intelligent/creative person in the room.

Org design, in general, is clearly a source of competitive advantage. The declining need for permission is one approach to enable both silicon-staff and carbon-staff. Humans have and always will be poor substitutes for robots, especially when it comes to tasks that require endless repetition, with precision. 

The biggest downside I’ve seen with permissionless orgs is when they are not communicated clearly: If you fail to explain why and how, it can come across as playing favorites. That is why a process is so important, until it is fully ingrained in your culture. 

In an ever-shrinking global arena, you need to be pursuing every opportunity for asymmetric returns in the war for talent and market share. Remember, just 15 years ago, offering work from home was an absolute differentiator. Now, it’s a table stake. Decision rights for your talent will just be the next domino to fall. The alternative scenario: Risk your company joining the statistical average of a 15-year life span for companies on the S&P 500.

Michael Sikorsky (@mjsikorsky) is an EY Entrepreneur of the Year Winner, Deloitte Fast 50 Recipient, and serial innovator. His current mission is to simplify wealth as the chairman of Copia Wealth Studios.  

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