Everything that’s cool about TransferWise in terms of mission, vision, autonomy, empowerment, trust, engagement. It makes people bigger than they thought they were, it gives them an insane amount of confidence. And that’s the difference. It’s not just about trust, the end result comes from giving smart people confidence inspired by trust and a clear sense of direction towards some kind of personal meaning. It’s striking.
Quote from Chris S. TransferWiser since March 2015, 7 days after joining
"We hire smart people and we trust them." I’ve heard lots of businesses use that phrase. They've almost always failed at achieving this. "Inspiring smart people and trusting them" is something we’ve figured out how to do at TransferWise.
At TransferWise we run autonomous, independent teams. Each team is trying to learn what matters to our customers. We measure our progress on doing this with Key Performance Indicators (KPIs). These KPIs measure how good of a job we are doing at keeping our customers happy and as a consequence drive our growth.
Running in autonomous independent teams is the only way we’ve found to build an organisation that hires smart people and trusts them. It's part of the reason why we’ve been able to scale as quickly as we have – from 60 people a year ago to over 280 people today – and part of the reason thousands of customers trust us every day to move their money.
Why do we believe this works? We’ve found other organisational structures are too dependent on “wise people” at the top of the organisation chart. These people are quite far away from customers and very far away from making changes to our product, feel “accountable” for numbers and inevitably become a bottleneck.
Accountability in the corporate world
The challenge is in getting accountability right. Most businesses are run by a CEO who is accountable to their shareholders. Shareholders hire a CEO who says they will deliver a revenue/profit target over the next one to five years.
In reality the CEO doesn’t deliver the revenue, a team does, and of course no one ever makes money unless their customers want to play ball too. Nevertheless the shareholders hold the CEO accountable for doing this.
So the CEO hires a sales director (or a VP Growth), holds them accountable, and may also hire a COO and hold them accountable for costs. These guys and girls don’t really know how to deliver the revenue or profitability target either - but have very good spreadsheets saying how they believe they will do it.
So they hire people who say they can deliver the numbers they’ve signed up to and have a proven ability to execute within their domains.
And hence the business is built on a chain of accountability and “management” against goals. If people fail at their goals – they are fired dependent on the level of the hierarchy that is deemed to have failed. This inevitably ends up in hiring hordes of people whose role is to hold people accountable in fear of being fired themselves.
Trust in startups
Startups are luckier. Founders are lucky to have control of the business for a few years so shareholders don’t dictate terms. And they get to be accountable to their customers. They are really accountable to their mission in the first place, which usually means building a product that has a positive impact on a large number of customers.
Anyone who’s worked early stage in a startup knows that figuring out how to make customers happy and coming back for more is the problem that startups are trying to solve.
Startups turn the accountability challenge on its head. Founders have to trust their teams, customers have to trust startups. If this doesn’t happen – the startup will fail. We have a belief that through the discipline of learning to trust our peers within our teams we get very good at understanding how to help our customers trust us.
Accountability == Trust at TransferWise
At Transferwise we’re trying to maintain this accountability to our customers by devolving accountability from our founders to our teams. In a sense our customers hold our teams accountable through the Key Performance Indicators (KPIs) we track. These KPIs track the team's impact on our customer's lives and as a consequence drive our growth.
Autonomous and Independent
Our teams are autonomous and independent. They are autonomous – no one can tell a team what to do. For example, we have a currencies team. It decides each quarter which currencies it's going to launch. No one tells the team what currencies to launch. Anyone can challenge the team on what its doing and the team should have a rationale for explaining why its focussing where it is. What this means in practice isn’t anarchy – but empowering teams to listen to customers and not to “someone high up”.
We’ve found the teams need to be independent too. Independence means we try very hard to minimise the shared areas of our business that inevitably become bottlenecks for prioritisation challenges.
For example the currencies team has everything within it, it needs to launch currency - ex-bankers, developers, product managers. It has no dependencies on other teams.
Our performance marketing team (the team responsible for advertising on Facebook and Google) has a product manager and developers working within it. We are tired of performance marketing folk blaming a failing product or product folk blaming poor quality marketing - hence the performance marketing team can make changes to any part of the product that they believe will improve conversion from performance.
This focus on our customers and our KPIs - gives us incredible focus and stops us from prioritising abstract notions that do not matter, but the things that will make a difference to our customers. We have no roadmap meetings, no strategy sessions, our KPIs and teams give us clarity on where we should focus.
As we’ve got KPI ownership rather than product/code ownership this works. Teams can work across the entire experience to move their KPIs.
Back to accountability
So what you end up with is a structure where decisions aren’t made at the “top” of the organisation, but where our product meets our customers. With the people in the organisation empowered to make decisions quickly that will make a difference to our customers.
Challenges and some open questions
We've had many inevitable challenges in operating this way and many more to come. What we’ve seen is that its enabled to scale our team very quickly. One question we keep asking ourselves is why this hasn’t been done before on this level to this scale? We're aware of the great cultures within Spotify and Valve - but are curious as to why this way of working isn't more widespread.
Practical challenges we’ve faced are:
How to help teams that are failing ? Team’s fail when they struggle to identify the KPI they are trying to move – or fail at moving that KPI. These teams feel like early stage startups that should be run with seed funding. But culturally figuring out how to embrace failing is not easy.
We’ve begun to have challenges where two teams both try to change one area of the product with different aims. We believe having a product owner for all areas of the product is important – and this helps resolve these disputes. However this only works if team’s have a shared sense of customer context.
As we’ve grown in size to over 280 people, working at TransferWise can feel like your working with 280 stakeholders. This can be a little overwhelming at first, and we’re still experimenting with how teams empower their leaders to make decisions on their behalf.
Onboarding new TransferWisers to this culture efficiently is also a challenge. We’ve noticed that new joiners spend a few months trying to find a boss to tell them what to do. Once they understand the level of empowerment that have – we see they are bounded only by the limits of their ambition: by what they believe is possible and their fear of failure. Systemically increasing our teams confidence and the breadth of their ambition is our next challenge.
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