Chad Silverstein built a company with no hierarchy, but pure freedom collapsed as the team grew. He learned to pair autonomy with written expectations and accountability, added mid-level managers at 50 people, and created pay systems that tie raises to measurable contribution and company performance.
Chapters
When I first started my business, I had a flat structure. I was convinced that I would not have any managers. I trained everybody when they first came in. And my first, you know, probably 5, 10, 15, 20 employees. And I made people team leaders, but I just stayed away from management. And the reason that I did it was because everybody said they hated their managers. And there was this negative stereotype that managers sucked and that, you know, you didn't want to work for a bad manager, you want to work for leaders. But most people weren't good leaders and they didn't go and have the proper training to be, you know, in a leadership role. And a lot of people, when they do get into that position, they use it to abuse, you know, having power and authority and, you know, it's not who people want to work under. So my, my belief was I don't want to work in an environment that I wouldn't want to work in, and I'd want to work in an environment where I was given the freedom and the autonomy to be able to do what I want as long as I can stay within the, the guidelines of whatever it is the company and the team expected. And so I had tons of freedom, tons of freedom in my office. And it worked really well. It worked well for many, many, many years until we got to a point where we had probably 50 people. And then, you know, I lost control of it and I needed to start compartmentalizing and having kind of a mid level group of individuals who can not only have things delegated to, but also kind of deal with a lot of the issues that I was stuck dealing with on a day to day basis. And the one thing I learned about that type of freedom is that one, it works really well when you have the right people. People don't want to work for someone who's standing over their shoulder and people don't want to work for someone who comes in and gets hired in from the outside and then they're in charge of a certain group of people and they've never even done the job before because maybe they have management experience. And so, you know, I used to hear that from pretty much everybody who came in and interviewed. And I wanted to continue to give people that type of freedom, but I learned that it has to be bookended with accountability. So it's okay to give this freedom to your culture, but you need to have a really high level amount of responsibility and a way to hold them accountable. Because nothing, nothing's free. And if you're going to give a lot of freedom to people, you got to have a lot of accountability. And the way that you can do that is to make sure that you have very clear, concise and direct written out expectations for all the people on your team. So you can call this what you want, you can call it performance plans, you can call it a job description. Whatever the case is, if you are an entrepreneur, if you're leading anything, having things in writing from the get go is critical because then it eliminates the need to have those uncomfortable conversations a year from now about where can I go in this job, where can I go with this role, Am I going to get a raise? And every CEO and entrepreneur dreads that. You know, can I talk? And then we have the money talk, because it wasn't made clear up front. So having a clear set of expectations from the get go about what you expect and what the responsibilities are and how someone could progress throughout this position and then obviously move out of it into a new job or kind of, I guess you could say, grow in the company and give them a path that they can follow and how they can make more money. So in my company, we used to call these accelerators and we'd give people these challenges. And my belief is you shouldn't be making more money unless you're producing more, you're adding more to the revenue and you're generating more of a reason why you should be paid more. You know, you don't and shouldn't feel entitled that you should be making more money because you've been there for a certain amount of time. You know, as an owner of a business, I don't care how long you've been there, that builds trust and that builds loyalty for sure. But that doesn't translate to dollar amount. And you can't rob Peter to pay Paul. So you really have to give someone a path. And if you're in sales, for example, you need to sell more in order to make more. And I'm a big believer that you have to incentivize big time your team and give them that carrot chase and give them a bigger portion of the wealth that they're generating for the company if they continue to meet and exceed expectations. So as a leader, write out your expectations, be very clear what the responsibilities are, be very clear what you expect, how the person can move up and increase their income if they hit certain mile markers or certain benches, and just ensure that if you're going to pay them more money that the company is also benefiting. And make it clear up front that the person understands that if the company's not doing better that they can't make more money. So you can't, you know, have one person be benefiting at the expense of another. And for leaders, it's the same deal. You can't expect people to love your company and go to bat for you when the company's doing great. You're not sharing the wealth with the people that you know you're working with. So a lot of nuances to leadership. This is a big one. And being clear and owning that it's your responsibility as a leader to be very clear and give the freedom and autonomy that people want and then bookend it with a high level amount of accountability and responsibility so that people know what's expected and you don't have to give them any bad surprises. By letting people go on Friday afternoon when you're not happy with their performance, you know, performance improvement plans, which you can check out that video as well, that's a big deal. And you got to be able to, you got to give people a clear path of what's expected so there's no bad surprises.
