Lessons from a startup that scaled up | Kurtis McBride | TEDxUW

TEDx Talks
27 Feb 201719:17
EducationalLearning
32 Likes 10 Comments

TLDRThe speaker discusses how traditional business hierarchies are outdated for the modern workforce. He explains that 20th century hierarchies made sense when jobs were mechanical, but now jobs require creativity. He argues that the individual experience, not rigid structure, should drive organizations today. The key is allowing employees to pursue their passion, skills, and business needs. To do this, leadership should be 'functionalized' into strategy, execution, and coaching. This model creates more engaged employees and leaders. The speaker urges abandoning hierarchies in favor of these new organizational ideas that focus on the individual.

Takeaways
  • 😊 The speaker ran a successful mouse breeding business in his parents' basement when he was 12 years old
  • 📈 He reinvested his profits to rapidly expand his mouse empire before his parents made him shut it down due to the smell and awkwardness
  • 💡 He realized individual engagement drives business success after a failed attempt to implement hierarchy in his company
  • 🔍 He examined why hierarchy dilutes strategy, execution, and empathy as you go down the organizational pyramid
  • 🚫 He concluded that rigid hierarchy fundamentally disengages people and makes organizations slower
  • 👥 His alternative model functionalizes leadership into strategy, execution, and empathy to better support individuals
  • 🎯 It aims to help each person find the sweet spot linking their passion, skills and business needs
  • ☑️ Practical lessons include hiring people who want to flow between roles and having a bench to celebrate transitions
  • ✅ Leaders emerge organically by rallying people instead of being appointed in his self-managed model
  • 🌟 There's a revolution happening in organizational design - avoid accepting hierarchy as the only way
Q & A

  • What was the main problem the speaker experienced with implementing a hierarchical structure in his company?

    -The speaker found that implementing a hierarchical management structure in his growing company nearly destroyed it. It diluted the key capabilities he expected from leaders, leaving lower level employees confused and disengaged.

  • What three key things does the speaker say individuals want in order to be highly engaged at work?

    -The three key things are: to work on a business need they are passionate about, to utilize a skill they are good at, and to have their needs aligned.

  • What are the three core functions of leadership according to the speaker?

    -The three core functions of leadership are: 1) Turning vision into strategy, 2) Executing a plan, and 3) Coaching and mentoring with empathy.

  • How does the speaker recommend structuring an organization to improve engagement?

    -The speaker recommends structuring the organization around individuals and teams focused on key business needs, supported by functional leadership roles based on capabilities and passions rather than a hierarchical management structure.

  • What does the speaker mean by having people "on the bench"?

    -Having people "on the bench" means providing a safe space for individuals to transition to when a business need they were hired for ends, so they have time to find a new role matching their passion and skills.

  • What is the speaker's view on how leaders should emerge in this type of organizational structure?

    -The speaker believes leaders should emerge naturally based on their ability to lead, not through formal hierarchical promotion. If someone wants to lead, they should just start leading.

  • What is halocracy?

    -Halocracy refers to a type of non-hierarchical organizational structure based on self-organization and peer relationships between members.

  • Why does the speaker say hierarchy is fundamentally broken?

    -The speaker argues that hierarchy dilutes the key capabilities of leadership the further down the structure, leading to confusion and lack of strategy, execution, and empathy.

  • What does the speaker mean by functionalizing leadership?

    -Functionalizing leadership means breaking down the responsibilities of leadership into core functions like strategy, execution, and empathy that different leaders can specialize in based on their capabilities and passions.

  • What revolution in organizational design is the speaker referring to?

    -The speaker is referring to new ways of structuring organizations like halocracy and agile that focus more on empowering individuals, teams, and networks rather than hierarchical management structures.

Outlines
00:00
🐭 Starting a Mouse Empire

The first paragraph describes how the speaker started a mouse breeding business in his parents' basement when he was 12 years old. He bought a mouse from the pet store, it had babies, and he then sold the babies back to the pet store for profit. He expanded this into a sizable mouse breeding operation before his parents made him stop due to the mess and smell.

05:02
🌳 Where Hierarchy Came From

The second paragraph discusses the origins of hierarchical organizational structures. It states that in the 20th century, companies were making physical goods, so jobs were repetitive. Also, communication was expensive. Now in the 21st century, jobs are creative and communication is cheap. Yet we still use old hierarchical structures.

10:03
💔 Why Hierarchy is Fundamentally Broken

The third paragraph explains how hierarchy dilutes leadership traits like strategy, execution, and empathy as you go down the organizational pyramid. By the bottom, people are confused, feel undervalued, and disengage. It introduces the concept of functionalizing leadership into those three areas.

15:05
🚀 A New Organizational Structure

The fourth paragraph presents a new organizational structure focused on individuals supported by functional leadership areas. It arrange people around business needs with strategy, execution, and empathy leaders tied to each individual. One leadership function settles any conflicts of priority when needed.

Mindmap
Keywords
💡Mouse Empire
The 'Mouse Empire' refers to the speaker's initial venture into entrepreneurship as a child, where they bred and sold mice. This concept illustrates the early onset of the speaker's entrepreneurial spirit and drive, which began with a simple task of caring for a pet mouse that unexpectedly multiplied. The narrative of starting with one mouse and growing to a business of selling 40 mice a month to a pet store sets the stage for the themes of growth, adaptation, and the entrepreneurial mindset that are explored throughout the video.
💡Business Plan
A 'Business Plan' in this context represents the speaker's early understanding and application of strategic planning and goal setting. After realizing the potential to earn from selling mice, the speaker devises a plan to systematically increase production and revenue. This concept is crucial as it introduces the idea of foresight, planning, and scaling in business, which are fundamental to the development and execution of successful enterprises.
💡Organizational Structure
The 'Organizational Structure' refers to the system of hierarchy, roles, responsibilities, and communication within a company. The speaker discusses moving away from traditional hierarchical structures towards a more individual-focused approach. This shift is highlighted as a response to the changing nature of work and communication in the 21st century, emphasizing the importance of adapting organizational models to enhance engagement and efficiency.
💡Hierarchy
The term 'Hierarchy' in the video is used to describe the conventional system of organizing a company in levels of importance or rank. The speaker critiques this model for being outdated and less effective in the context of modern, creative, and communicative work environments. The narrative demonstrates how rigid hierarchical structures can dilute vision, strategy, and employee engagement, leading to less effective leadership and disengaged teams.
💡Engagement
Engagement refers to the level of enthusiasm, commitment, and involvement an employee has towards their work and the company. The speaker posits that individual engagement is crucial for the success of a business and argues that traditional hierarchical structures hinder this. By focusing on matching individual skills and passions with business needs, companies can significantly increase engagement levels and overall productivity.
💡Passion, Skill, and Need
These three elements form a core concept in the video, representing the ideal alignment for maximizing employee engagement and effectiveness. 'Passion' refers to what employees are deeply interested in, 'Skill' to what they are good at, and 'Need' to the business's requirements. The speaker suggests that aligning these elements for each employee leads to higher satisfaction and productivity.
💡Functionalizing Leadership
The concept of 'Functionalizing Leadership' is introduced as an alternative to traditional management roles, dividing leadership responsibilities into three functions: strategy, execution, and coaching/mentoring. This approach aims to allow individuals to lead based on their strengths and interests, thus increasing engagement among leaders and their teams. The speaker illustrates how this model fosters a more supportive and effective leadership environment.
💡Agile
Agile is mentioned as an inspiration for organizing teams not by their function (e.g., marketing or sales) but around business needs, allowing for more flexibility, responsiveness, and collaboration. This method draws from agile methodologies, known for their adaptability and focus on individuals and interactions over processes and tools. The narrative uses agile as an example of innovative approaches to team and project management that align with the speaker's advocacy for a more flexible and engaging organizational structure.
💡Core Values
Core Values in the video are described as essential principles that guide the hiring process and overall company culture. The speaker emphasizes the importance of aligning employees with the company's core values to ensure that the organization is filled with people who are not only capable but also deeply engaged with the company's mission and way of working. This concept underscores the strategic importance of cultural fit and shared values in building a cohesive and motivated team.
💡The Bench
The 'Bench' is introduced as a concept where employees can explore new opportunities within the company after completing their current projects or when their roles evolve due to changing business needs. This strategy is aimed at keeping employees engaged by allowing them to pursue areas aligned with their passion and skills, even if their original role is no longer needed. It represents a dynamic approach to career development within the organization, emphasizing flexibility and continuous growth.
Highlights

Started first business at age 12 breeding and selling pet mice

Realized hierarchy was not working for our 70-person company and nearly destroyed it

Individual engagement drives businesses forward; focused on passion, skills, needs

Hierarchy dilutes leadership skills over layers and disengages people at bottom

Functionalized leadership into strategy, execution, and empathy functions

Inverted pyramid to put individuals at top supported by specialized leaders

Organized people around business needs instead of functions

Hire people excited to find their passion/skills/needs - Complacent people won't fit

The bench - Safe place for people to go when a project ends without failing

Leaders emerge by leading, not by being appointed

Revolution happening in organizational design - embrace new ideas

Hierarchy makes organizations slower and employees disengaged

Focus on individual passions, skills, needs and functional leadership

This creates more engagement, performance, and market success

Don't accept hierarchy as the way things must be done

Transcripts

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