How Startups Can Increase Employee Freedoms Without Losing Control

 

Introduction from Leading Point:

We love collaboration here at Leading Point and we are lucky enough to have some great clients and partners that feel the same. We work with some similar like-minded start-ups that share some of the same challenges and adventures as us. Below is a brilliantly informative article by our friends at Spendesk, explaining how startups can successfully create a positive working environment for their employees through trust and freedom. At Leading Point, this is something we firmly embody. Forging strong, meaningful relations is how we deliver our services, and without a satisfied, confident team, this simply can’t be done. If you’re a startup, and increasing employee freedoms without losing control is something your company is in need of, don’t fret, this piece will provide great tips on how to apply some quick and easy changes to make team building better and brighter for everyone. Overall, we are delighted to be office neighbours with Spendesk, and are looking forward to some more collaborations in the future. Watch this space!

Words by Ellen Masterson:

Every employer wants their team to be happy, efficient, and effective. Most recognise that the vast majority make good decisions and don’t need to be micromanaged. 

And yet, because of concerns about risk and compliance, many companies create hurdles that slow down their teams and take power away from actors. 

As HBR explains, “executives have trouble resolving the tension between employee empowerment and operational discipline. This challenge is so difficult that it ties companies up in knots. Indeed, it has led to decades’ worth of management experiments, from matrix structures to self-managed teams.”

Today, we have bad solutions to legitimate concerns. The answer to a need for process security isn’t to restrict access – it’s to create more secure processes. And as we’ll see, that doesn’t have to be complex. 

In this article, we’ll explore the reasons why companies struggle allowing freedom, and how a few simple shifts can make all the difference. 

What prevents employee freedoms today?

Before getting to the positive actions all businesses can take, let’s start by identifying why employees may not have the freedom they need to excel.

Here, we’re talking about two kinds of freedom: 

  • Freedom to make decisions and shape their own work scope and projects;
  • Freedom from excessive administrative and managerial pressure.

Together, these lead to more productive employees, a happier work environment, and faster growth.

In particular, we can look at two crucial causes.

A systemic lack of trust

This is fundamental. Many businesses simply aren’t structured to let team members think for themselves. Every decision must be scrutinized, and every action needs sign-off. 

Of course, some micromanaging is always to be expected. And some actions really do need sign-off. But many don’t, and it’s vital to consider the cost of always putting the breaks on as team members push forward.

A few simple questions to ask: 

  • Are our employees free to do their best work?
  • Are the rules we have in place helping, or hurting?
  • Can we trust our teams to make the right decisions, without always second guessing?

As we’ll see, there are plenty of positive ways to remove hurdles without losing control over what really matters. 

Closed-off systems and gatekeepers

Aside from the broad principle that employees should be free to make choices, there are common corporate practices that limit freedom – and not always for good reasons. Whether there’s limited institutional knowledge or a lack of trust, we make certain people responsible for processes, and lock everyone else out. 

A few examples: 

  • Key business data is only accessible by executive leadership. New revenue, customer churn, and average deal size can all help employees make smarter decisions. But many simply don’t have access. 
  • Corporate credit cards belong to a few select managers. This makes it very hard for anyone else to spend company money, creates hurdles, and slows down business. 

Today, we have ways to give employees more hands-on access to these processes without creating new risks or losing control. Let’s take a look at these now. 

How to increase freedom while retaining control

We have what seem to be two conflicting objectives. But employee freedom and organisational freedom can certainly co-exist. Just follow these four principles. 

1. Recognise trust as a core company value

If you want employees to feel free to do their best work, you obviously need to trust them to do so. What’s more, they need to know that they’re trusted to make decisions. This is empowering. 

Which means that trust needs to be enshrined as a company value. Many startups are now taking the time to carefully craft their culture code – this is seen as vital to startup success. It’s also hugely important in the hiring process, and helps you keep employees around for longer. 

So one way or another, trust needs to be in there. At Spendesk, for example, one of our core values is ownership. Each employee owns their scope and is empowered to make decisions. Which is another way of saying that the company trusts us. 

2. Build systems that everyone can use

We mentioned above the trouble with having closed-off systems. This manifests itself in two main ways: 

  1. Systems are so complex that only those with specific skills can use them;
  2. Most employees literally cannot access them – they lack the permissions or the tools to do so.

And of course, there is occasionally good reason for this. Average employees shouldn’t have access to the company bank account, for example. Which leads many finance teams to believe they need control over all spending. Or that only managers should have the right to spend company money. Neither of which are true. 

Instead, you need systems that guide employees, set out limits and rules, and prevent them from making costly mistakes. Team members are free to make choices, just within certain parameters.

One example is replacing company credit cards and expense claims with more tailored spend management solutions. These let you set the rules per employee or team, create spending limits, and require managerial approval above certain thresholds. 

So there you have full control. But employees have their own access – they don’t need to come begging for the corporate card – and finance teams don’t have to hold people’s hands throughout. The software guides them through each payment.

That was one just one example. But similar systems exist for HR and payroll, invoice processing, accounting, and a wide array of other corporate procedures. 

3. Speak in plain language

Another simple error that many companies make is in communication. If you make policies harder to understand than they need to be, you actually reduce the likelihood that teams follow them. Which then leads to two outcomes: 

  1. Reduced control, since people aren’t following the rules you create;
  2. Slower outcomes, because a manager or finance team member has to explain every transaction to employees one-to-one.

So the simple and impactful choice here is to ensure that internal policies and processes can be followed with no intervention. In practice, this means: 

  • No lengthy policy documents. The more you trust your team, the shorter you can make your travel and expense policy, for example. 
  • Keep jargon to a minimum. Documents should be easy to understand.
  • Build policies into processes. Even better than cross-referencing policy documents is to have them actually built-into systems. Assume that people haven’t read the document, so have systems that guide them through the process and keep them within boundaries.
  • Communicate clearly and repeat yourself. At a higher level, company values and expectations should be expressed openly and reiterated often. 

Overall, don’t confuse freedom with a lack of rules. Employees need the freedom to make choices within clearly set boundaries. Knowing what’s expected and allowed is freeing.

4. Remove obvious administrative hurdles

One clear impediment to freedom is creating hurdles and hoops to jump through. If employees can’t work smoothly and independently – and are always catching up on paperwork – it’s hard to say that they’re operating freely. 

But we can’t remove all admin for good. Instead, here are principles to make processes as painless as possible, while still maintaining compliance and control.

  • Go paperless. The very act of filing a form by hand, only to digitize it later adds time and effort. Replace all paper-based systems with digital-first alternatives, and things will move faster and freer.
  • Make processes and data easy to find. Employees should be able to answer their own questions and find solutions quickly. Otherwise, you’re forcing them to rely on others – usually HR and finance teams – which can quickly lead to interpersonal issues.
  • Make approvals fast and efficient. Purchases will usually need a manager’s approval. As will other areas of compliance. Make this smoother with automated approval workflows, and with systems that track approvals asynchronously. In other words, it shouldn’t require an email chain to find out who approved a particular transaction. Build this into your systems. 

We often think of admin as a necessary evil if we want to keep control and compliance. But you can have free-flowing, fast processes without creating unnecessary roadblocks along the way. 

Conclusion

As mentioned above, it’s natural to micromanage and to seek control over company decisions. But it’s not good. You’ve hired team members for their skills and ingenuity, so why would you restrict their use of them?

Brian Carney and Isaac Getz offer this example of a liberated company’s manager: “When her team shares a problem or an opportunity with her, she will not offer a solution. Instead, she asks them to find their own—after ensuring that there isn’t something she’s doing that would get in the way.”

For some businesses, achieving liberated company status would be a tectonic shift. It’s a worthwhile project, but one that will take years and plenty of soul searching.

But we’ve seen examples above of precise, easy-to-implement changes that have profound effects. Start with a few of these, and gradually work towards becoming a company that puts employee trust on a par with corporate control. 

After all, the two can naturally co-exist with no issue.

 

Author:

Ellen Masterson: Ellen Masterson is a UK and Ireland market expert at Spendesk, where she helps startups and scaleups establish simple yet robust spend management processes.

Thushan Kumaraswamy