Meet the company that’s knocking down the pyramid management structure

This arti­cle is part of our Going Against the Grain series, which tells the sto­ries of com­pa­nies bold enough to break busi­ness norms and try out new ideas. To explore the rest of the series, head here.

It’s com­mon for employ­ees to take umbrage with their man­agers, but how well would the work­place func­tion with­out some sort of chain of com­mand? 

Although 57% of employ­ees sur­veyed as part of Devel­op­ment Dimen­sions Inter­na­tion­al’s Front­line Leader Project admit­ted to hav­ing left a job because of their man­ag­er, the clas­sic pyra­mid struc­ture — with the CEO perched at the top — remains ubiq­ui­tous. 

Dig­i­tal mar­ket­ing con­sul­tan­cy Jel­ly­fish is one firm that’s decid­ed to chal­lenge the norm. Its CEO and co-founder, Rob Pierre, found that the tra­di­tion­al hier­ar­chi­cal sys­tem under which is was oper­at­ing was too con­strain­ing and pro­mot­ed the wrong behav­iour.

“Peo­ple were assess­ing their val­ue based on the num­ber of peo­ple they were man­ag­ing, not how good they were at the dis­ci­pline that had got them into a senior posi­tion in the first place,” he recalls. 

Under that organ­i­sa­tion­al struc­ture, employ­ees were caught up in bureau­cra­cy. People’s diaries were packed with sched­uled one-to-one meet­ings with their line man­agers. Reflect­ing on this peri­od, Pierre says: “Jel­ly­fish had become a job fac­to­ry; our prod­uct was man­ag­ing peo­ple.” 

It was at that point, about two years ago, that he decid­ed to unpick Jellyfish’s struc­ture, start­ing with his own posi­tion. Man­agers were removed and heads of depart­ments were replaced with “steer­ing groups”, with the aim of enabling deci­sion-mak­ing respon­si­bil­i­ties to be shared among employ­ees. 

This restruc­tur­ing has enabled more peo­ple to “add val­ue and give direc­tion to the way in which we’re going to work”, Pierre says.

It also solved a sec­ond prob­lem fac­ing the busi­ness, which acquired five com­pa­nies at the start of the year. “When you’ve got senior peo­ple com­ing in from an acquired organ­i­sa­tion, it rais­es awk­ward ques­tions about the posi­tion at which they should enter the busi­ness,” Pierre explains. “This struc­ture allows us to con­tin­ue grow­ing with­out many of the polit­i­cal and bureau­crat­ic chal­lenges that oth­er large organ­i­sa­tions face.”

Making the grade

With no line man­agers, pro­mo­tions are also han­dled dif­fer­ent­ly. All employ­ees have been giv­en a grade that reflects their salary, depart­ment and loca­tion. Instead of hav­ing to be rec­om­mend­ed for pro­mo­tion by a man­ag­er, an employ­ee seek­ing an enhanced grade has to com­pile a busi­ness case to demon­strate how their val­ue to the enter­prise has increased. Cas­es are anonymised and judged by a pan­el of employ­ees from across the com­pa­ny to deter­mine whether that applicant’s pay should be increased.

Unsur­pris­ing­ly, when the new sys­tem was intro­duced, peo­ple seek­ing a bet­ter grade com­pared them­selves with their col­leagues. But appli­cants quick­ly realised that if they could show how they were adding more val­ue they had scope to increase their salary inde­pen­dent­ly of what oth­ers were earn­ing.

“This [grad­ing sys­tem] is not about any­body else,” Pierre says. “We want you to improve and to be a bet­ter pro­fes­sion­al than you were yes­ter­day.”

The­o­ret­i­cal­ly, any­one in the organ­i­sa­tion could earn the same salary as the CEO under this sys­tem. “If some­one were help­ing us to win all our pitch­es and help­ing to devel­op all our prod­ucts, they could make a busi­ness case show­ing the val­ue exchange and be remu­ner­at­ed accord­ing­ly,” Pierre says.

Improving diversity

More than 800 employ­ees have been pro­mot­ed since the grad­ing struc­ture was intro­duced, 57% of whom are women. Pierre claims that remov­ing uncon­scious bias from the process has helped the firm to recog­nise a more diverse array of tal­ents. 

“I was con­fi­dent­ly told that women are less like­ly to pro­mote them­selves, so our pro­mo­tion sys­tem was biased towards males,” he says. “I’m delight­ed that the sys­tem gives every­one an equal oppor­tu­ni­ty to make their case with­out hav­ing to be the loud­est per­son in the room.” 

Pierre admits that it has tak­en time for peo­ple to “break the mus­cle mem­o­ry” that comes from build­ing a career in hier­ar­chi­cal organ­i­sa­tions. List­ing some of the com­mon mis­con­cep­tions, he says: “Peo­ple assume that you have no lead­er­ship so it results in anar­chy. In real­i­ty, it’s about putting empha­sis on lead­er­ship, not line man­age­ment, and giv­ing true auton­o­my and account­abil­i­ty to the indi­vid­ual.”

Regional variations

Giv­en that Jel­ly­fish has 40 offices around the world, cul­tur­al dif­fer­ences made the pro­mo­tion appli­ca­tion process hard­er for employ­ees in some loca­tions. “One of our senior peo­ple in India spoke to me and explained that it’s cul­tur­al­ly frowned on to boast,” Pierre explains. 

The Indi­an oper­a­tion solved this by adapt­ing the pro­mo­tion process, enabling oth­er team mem­bers to help write the appli­cants’ cas­es as part of a group ses­sion.

Pierre believes that Jellyfish’s expe­ri­ences show that oth­er com­pa­nies can adopt a man­ag­er-free struc­ture.

“It relies on every­one under­stand­ing where they fit in and where they add val­ue,” he says, adding that his advice to any CEO con­sid­er­ing a sim­i­lar change would be to “real­ly focus on the out­comes you want, get every­one in lead­er­ship to become an advo­cate and address any reser­va­tions imme­di­ate­ly”.