Brian Chesky's "Don't push decision making down" approach is brilliant

A little over a week back I was watching a recent interview of Brian Chesky.

And he said something very counterintuitive to most folks.

You can even say its probably an unpopular thing to say.

But it was something that I totally totally agree with.

He said he doesn’t aim to empower all the various departments of AirBnB to take their own decisions.

Rather he tries to centralize most core decisions to himself. Or at least to how he would have decided.

Now let’s dissect this a bit and I’ll point out why I love it.

How do most companies scale?

I’ve been a part of a number of companies scaling at various stages. Companies like Groupon, Lazada, Wayfair and Pomelo Fashion.

And what you tend to see as they get bigger is that you get more levels in the organization.

And so a hierarchy is set up in which the CEO manages a handful (usually max 7) direct reports. Then each of those C-levels in turn manage a set of direct reports. And on and on till you get the final front line-level employees.

Then there is usually some type of annual, or sometimes quarterly, strategic planning process to set high level goals (or in some companies they use OKR’s).

And each group in each level of the organization runs at implementing their OKR’s. And reports back on them at the end of each quarter usually.

Now this is a beautiful model if we lived in a static world where nothing is changing. But that is never the reality.

The reality is that tons of things are changing all of the time.

What is the problem with this way of scaling?

Teams do not live in isolation. Marketing is often tied to supply chain, which is tied to other functions.

A change in one has a ripple effect on the others.

So for example if you’re not able to produce the hot new product you planned… then perhaps this nullifies part of your marketing strategy.

And you hope that your interdepartmental communication is good enough to fully think this out. Which sometimes it is, but sometimes it isn’t.

What often gets missed is the impacts on other teams that are less direct. For example, maybe you should also adjust your pricing and your distribution approach.

Then maybe when you change them, you don’t even know what you’re changing them to. So you need to test and iterate.

But how do you do that when you’re driving an unwieldy ship of several thousand employees.

For example AirBnB is now 7000+ employees. It is like the Titanic.

What are the problems that start to crop up?

What you start to see is teams throughout the organization starting to make their own decisions on how to adjust their strategy.

In part because they are ‘empowered’ to do so.

The problem is that the folks in these teams are often not talking to the other departments or thinking about the full impact of their decisions.

Sometimes they’re not even capable to. Or they don’t see that as being part of their job.

And so it ends up not working. Or only partially working.

As a result resources are wasted.

Projects fail.

I’ve seen it happen a ton of times.

Why startups deal with these types of problems much better?

The type of problem I’ve described above typically doesn’t happen when the team is small and is still a startup of say less than 50 people.

Why? Because everyone is in close proximity to one another and they communicate.

They can test and iterate quickly because of their small scale. So they have a much higher chance of landing on the right path or solution.

It’s kind of like seeing an iceberg ahead in your path… and you’re driving a speedboat instead of the titanic.

There’s a much better shot of you switching direction in time.

How do you continue to operate as a startup even when you’re already quite big?

This was the problem that Brian Chesky was faced with. Because he wanted AirBnB to not become the Titanic but rather still operate like a speedboat and make big changes fast and successfully.

So what did he do? He centralized decision-making to himself as much as he could.

Or as he says it in the interview… “my job as a leader is to flatten the org.”

This doesn’t mean that he took every decision himself. But rather he’d been involved directly with enough people at various levels of the organization that even if he wasn’t directly in the meeting… they knew how Brian would think about it.

So how did he do this practically? Well he set up the organization such that the teams implementing the key strategic projects had direct exposure to him.

This way they would get direct access to how he thinks and makes decisions.

And after awhile.. even if he wasn’t in the room they’d be trained to have the long-term, customer experience-first way of thinking that he did.

He didn’t rely on the leader of an important team passing that culture and mindset to their team indirectly… because that would be like playing the kids game telephone.

He exposed multiple layers of the org to his way of thinking and decision-making directly.

And I honestly think that that is genius.

Now for my own personal twist… enforce this with structure and process

As many folks know I’m a Clickup guy.

Clickup is a project management application but the way that I use it…. it is much much more than that.

I’ve set up two of my own startups and ran it completely on Clickup with the mindset of “everything that takes more than twenty minutes is a Clickup task."

I’ve also set up several funded startups that were clients and larger client organisations

.Clickup is in my view amazing at two things…. setting up clear, transparent processes. And the ability to structure your entire organization into a transparent way of working.

With the Clickup approach I use…. I easily have transparency into the decisions and progress being made by 40+ people. I could probably even do 100+ if I wanted.

Because you’re just reading through and occasionally responding to notifications and comments.

So influencing managers’ decision-making two or even three levels down the org chart all of a sudden becomes possible to do systematically.

Once leaders of larger organizations begin to fully understand just how powerful this is I think it is going to be a game changer.

Because you can run a large organization with hundreds or even thousands of people almost like a startup.

Which means you react and iterate light years faster than traditional organisations of that size. Which essentially means that in the end… you win.

Wanna collaborate? Check out www.endgameken.com