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Shawn Neumann, founder and president of Domain7 (Rafal Gerszak/RAFAL GERSZAK FOR THE GLOBE AND MAIL)
Shawn Neumann, founder and president of Domain7 (Rafal Gerszak/RAFAL GERSZAK FOR THE GLOBE AND MAIL)

The Challenge

Is it time to bring on middle managers? Add to ...

Every week, we will seek out expert advice to help a small or medium-sized company overcome a key issue it is facing in its business

For the last 15 years, Shawn Neumann, the founder and president of Abbotsford, B.C.-based Web agency Domain7 Solutions, has run his company without a single middle manager.

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He vowed he would never own a more typical, management-heavy company. But as Domain7 grows, he’s finding it harder to run his company the way he’d like to.

Mr. Neumann says he worked hard to create an open, collaborative environment, with an emphasis on autonomy and individualism.

About 50 employees report to Domain7’s three directors. As the company expands (revenues were $4-million last year), the directors find themselves spending an increasingly disproportionate amount of their day – about 70 per cent – dealing with staff and client issues, instead of their own revenue-generating duties.

“We could have [up to]25 people reporting to one person,” Mr. Neumann says.

With plans to add another 10 employees this year, he knows something has to change, but he doesn’t want to create the typical structure of middle managers. And he wants to maintain the autonomous, independent culture he worked so hard to establish.

“We don’t want to go the route of a traditional hierarchical structure,” Mr. Neumann says.

To ease some of the pressure, he’s implementing a “360 feedback loop,” where colleagues critique themselves and others, rather than the directors doing all the evaluating, but he knows that’s not enough.

“What worked with 20 people isn’t working with 50,” he says. “We’re at one of those pivot points where you have to fundamentally re-evaluate the business.”

The Challenge: How can Domain7 change its management structure without sacrificing its company culture?

THE EXPERTS WEIGH IN

Greg Tricklebank, principal at Delta Partners, Ottawa

He shouldn’t dismiss middle management. Yes, middle managers can tend to be a problem area, but that’s a result of an organization’s culture. If they lead in a way that avoids too much command and control structure – which is what stifles innovation – then there’s no reason he can’t keep the culture he’s developed. Reward managers for things like openness and leadership qualities, instead of command and control.

It’s also time to hire an HR specialist. Not someone to hire and fire – that can still be left to the directors – but someone who can handle the paperwork, offer legal advice, develop policies and fill out forms. It’ll free up a lot of the directors’ time and allow them to focus on maintaining the open, collaborative culture.

Hugh Arnold, adjunct professor of organizational behaviour at the Rotman School of Management , University of Toronto

Create a team-based structure around specific groups. Don’t appoint a director or head of the group. The team has to work autonomously and they have responsibilities for managing their own processes and resolving conflicts. Rather than giving that authority to one person, who’s the team head, you can say this is a team responsibility and everyone needs to spend 15 minutes at the end of every day to discuss issues with one another.

To do that, though, he will have to put some formal processes in place. Everyone has to understand company priorities, so, when faced with conflicting demands, the team can go back and say, “Who are our customers and how can we fulfill their needs?” He’ll have to invest time and energy in ensuring there’s clarity or he’ll end up with a chaotic workplace.

Leerom Segal, president and CEO of Klick Health , Toronto

Culture is very important to us, and, like Domain7, we have a collaborative structure. But we do have managers. At some point, he’s not going to be able to oversee everyone. What happens if he reaches 200 staff? He’ll need leaders, but it’s not about micromanaging, it’s about leading.

There is a way he can at least delay adding managers: Get rid of [internal] e-mail. E-mail is inherently bad at communication, there’s no accountability. Look at [work]ticketing systems instead. All messages are kept in one centralized place and nothing gets forgotten. It becomes easier to assign and manage tasks and stay organized. All the well-managed larger agencies have some form of ticketing system. It may not, ultimately, replace the need for managers, but it will postpone it.

THREE THINGS DOMAIN7 CAN DO NOW

Hire an HR specialist

Free up some of the directors’ time by hiring a human resources adviser to take on some HR responsibilities.

Create team-based groups

Put groups of disciplines together but don’t appoint a leader. Give them time at the end of each day to sort through issues themselves.

Ban internal e-mail communication

Use a work-ticketing system instead. Employees send messages through this work-flow program; all communication is stored in a centralized place, allowing for easier assignment of tasks, more organization, and less time needed to deal with staff issues.



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