Interview: I run a company which is managed by its 600 employees

They have abandoned the typical model of business goals, handed over their decision-making powers to their six hundred employees, and are now only overseeing that the decentralized system works. The biggest challenge for vertical companies is to keep the system simple and maintain consistency between personal motivation and company vision, says Pavel Kysela, CEO of Adastra, in an interview.

It is typical for startups that at the beginning everyone is doing everything. Do you think it’s a good model?

A small team, where everyone does everything, does not fulfill my vision. In Adastra, we do it the opposite way – we prefer division of labor. Every employee has their own responsibilities and powers, but they must be in line with the company's goal. I didn’t have a good experience with collective (ir)responsibility.

Why do you think your approach is better?

I think that for our company and its employees, decentralization is more profitable than the classic top-down management approach. People who are in close contact with customers can make faster and more effective decisions. Employees feel more motivated and committed because they have more freedom in what they do and how. However, it should be remembered that with increased powers also comes responsibility – hand in hand.

What do you mean?

If you share powers and responsibilities across the company, you must ensure that employees’ motivations match the company’s motivations. If you fail, you will have a decentralized organization, where each part will work on its own goals and will look for optimal ways to achieve these goals. If you want departments to work together, you must constantly finetune the system so that current and long-term goals are in line with individual goals. Once you succeed, huge potential is unlocked.

What could happen if you left people "without supervision"?

People are very inventive and could exploit the system. I know about a case of one unnamed bank that changed the motivational system of its employees. They started evaluating salesmen according to the number of mortgages sold, not their total volume. In the end, it turned out that several brokers found a loophole in the system and started to divide the mortgage. Instead of a four-million-dollar mortgage, they offered two mortgages for two million. They got twice more on bonuses, but the company did not make any money.

Can this be avoided? If so, how?

You need to keep track of what's happening in the company. I'm trying to make everyone "run" in the same direction. This means that we give people the freedom and the opportunity to self-realize, but at the same time we want them to turn their energy towards the company strategy.

Do you manage to keep an eye on internal motivation of all employees?

In my position, this is, of course, not possible. It is the role of a direct superior. For me the biggest challenge is to keep the system simple and transparent, so there is no room for finding loopholes.

Are you able to do it?

I would say yes, although it is a never-ending process. I see a huge change between what our company was like in the past and what we are now. Since 2009, Adastra has undergone a major transformation that has made us much more transparent. Thanks to this change, we are experiencing the largest growth in company history.

To what do you attribute this success?

Previously, the company was divided into separate departments – each discussion between departments was a conflict of interest between the executive branch, sales department and project managers. We had business goals and one large client portfolio. Decentralization helped us to delegate powers to departments that have been taking care of clients for a long time, and thus client care is much more effective. Thanks to long-term planning and the decision to abandon the model of annual business goals, we make more strategic and longer-term decisions.

Has your approach towards employees changed as well?

We have always tried to make the environment informal, but with the growth of the company everything is changing. Therefore, we started to divide people into smaller autonomous teams. Generally, people can keep informal ties with a maximum of 150 people (Dunbar’s number); from my experience, it's even less in teams. As teams start growing, natural communication stops working. I can’t go to "John" to ask him something, but formal processes and rules come. That's why we try to form smaller groups where informal ties work.

What else is important for you in addition to team size in terms of employee care?

Definitely freedom. We do not have a rigid structure or career progression, which is unusual for junior people who are used to corporations which plan their lives many years ahead. Freedom is certainly a good means of motivation, which gives us the ability to change flexibly and develop.

How do you motivate your employees?

In addition to classical company benefits, we offer people an environment in which they can continually grow and become the top of their industry. Given that our area is evolving rapidly, we support education and personal growth in people. We give them the ability to move around the company and work in positions they like and are good at. We adapt positions to people, not people to positions. And thanks to this, we have a low turnover rate in the long run.