The Inverted Org Chart – How being CEO means you’re on the bottom and why that’s good for your business

Many entrepreneurs start companies partly because they want to be the boss. The thinking goes like this: “Once I’m the CEO, I’ll be free because no one can tell me what to do.”

In actuality, when she starts her company and becomes the CEO, to her surprise, she has never had so many bosses in her life!

As Phil Libin, CEO of Evernote, put it: “The life of most CEOs is reporting to everyone else…if you want to exercise power and authority over people, join the military or politics. Don’t be an entrepreneur!”

We are all familiar with the typical org chart – it’s the one that strictly resembles those military and political institutions.

The reality? Most new companies have an org chart that actually looks like this; whether founders like it or not:

 

In my opinion, this is good news for start ups – particularly companies disrupting established industries. I know I’m not alone in this thinking – see slides 39-87 on the now famous Netflix Culture deck and Harvard Business Review’s article on the subject.

So; entrepreneurs – don’t fret!

While this structure does NOT ensure you’ll be kicking back while everyone else does all the work for you (and honestly, if you thought that would be the case you should seriously question starting a company at all), it does put you in a position to unseat the behemoth competitors that came before you in industries ripe for disruption.

This inverted org chart is really good for you. Why?

Because:

• Big + Traditionally Structured = Slow (and often lacking in a strong performance culture). There’s no getting around this.
• Speed and agility matter when it comes to evolving your offering to the rapidly changing needs of your customer base.
• Putting the needs and happiness of your employees at the top of your agenda will translate into increased energy and enthusiasm towards your customers.

Demographics

Today’s workforce is also drastically changing. Millennials already nearly dominate the make-up of our organizations. In an article published here, HBR even points to the idea of reverse mentoring where this new generation of “young chiefs” mentor senior executives on the world that has gone social and mobile.

And while not everyone has the bruises of an entire life spent in business, the internet has made us incredibly well informed without, in some ways, having had to. Everyone with a device and an internet connection can add significant value to our companies without the need for traditional oversight by “box ticking higher ups” hoping to stick to strict protocols that often only used to work.

One of the realities of this demographic is that they don’t respond well to authoritarian styles of management where the self-proclaimed “wiser” boomers expect the simple act of their words, espoused while feet are firmly kicked upon desk, to lead to a standing salute followed by direct action. Whether this younger demographic knows better than you or not, they think they do. So, boomers, in the context of your wisdom, do you think hanging onto the traditional org chart will serve you? Perhaps it’s time to wise up and adjust your sails to make these relationships work for everyone’s collective gain.

Does an inverted org chart lead to chaos? No! Nail the Context.

For those employees interacting with your customers, Millennials or not, focus on nailing the context for them. Provide mentorship, get obstacles out of their way, and allow them the freedom to grow by serving your customers well. With the right context provided, a level of freedom then exists for everyone to serve those above them on this inverted chain of command.

To share a personal example, as the CEO (though I prefer to be called Mayor) of RTOWN, I do not have a boss. I have a bunch of them. They are traditionally called employees (though I prefer to call them RTOWNers where the distinction is their ownership mindset). Each of my bosses and myself have hundreds of other bosses. Those are traditionally called customers (though I prefer to call them RTOWNers as well where the distinction is the partnership we create with them by becoming an extension of their digital marketing team). Am I frantically running around responding to the demands of hundreds of bosses? Is my inbox overflowing with tasks? No, because my team is the second in command after our ultimate bosses (the customers). To support my team and ensure they are successful in supporting our ultimate bosses, I focus on providing the right context for them to make decisions that will benefit our customers as well as their own personal and professional growth. I also focus on the following to support our collective success:

• Culture
• Strategy
• Cash

Know When to Fire Yourself

A customer recently noticed that a social media channel that we managed for them was not performing for them. We knew it before they pointed it out to us, but our team was too worried about losing the revenue that we didn’t get in front of the problem and reallocate their funds to another platform before they raised it with us. Losing this customer was my failing because I didn’t provide the right context to my team who were in the best position to make the decision that was right for our customer. Had we fired ourselves from servicing that channel and rehired ourselves elsewhere, we would have kept this customer through a bond of trust that would have been created. Never again. And how much stronger are we now for not continuing to service a digital marketing channel to our customers if we know it isn’t adding value to their specific business?

This is really good news for our customers who trust RTOWN to take care of this new world of digital media for them.

Parting thoughts on serving your team and customers

The best companies today have leaders who understand that they are servants to their team and their customers. Not the other way around. And there is nothing better in life than to live in service of other people who need and trust your help.

Lastly, being a start up founder, I know my team is betting some of the best years of their life on what we are building together. It’s not only my job to support them for the benefit of our customers; it’s simply the right thing to do for them as people. In the end, it’s all about people.