It was late summer 2021. New COVID regulations were in full force, and my company, Adtech, still had a few dozen classroom AV installations to finish before the fall semester kicked off at several local universities. Between the delays, the sudden restarts, and the product shortages, it was one of the most intense summers I can remember in the AV industry.
At the end of a particularly long Thursday (another round of contact tracing and quarantine guidelines had made staffing … complex), we held our daily huddle with the installation teams. Near the end, one of our lead technicians chimed in.
“I was looking at the project in our ERP system,” he said. “And based on the schedule, I think I have a way to increase our margin on this job.”
The call went silent. What...?
“Well, that’s great. Tell me more,” his project manager said, with equal parts curiosity, enthusiasm, and skepticism. The skepticism was fair. We’d spent dozens of monthly business reviews and town halls teaching everyone how to read a project P&L, but most of the team was still coming up the learning curve. Add a summer of supply chain delays on some tough projects, and nobody was expecting good news about margin.
The tech had looked at the project P&L that day and saw that he had about 16 hours of work left. He had two choices. He could work a normal Friday, then come back Monday and finish the job. Or he could stay a little late Friday, incur some overtime, and get the whole thing closed out.
He understood enough about the project to see the bigger picture: it was better to keep things moving than save about a few hours of overtime. So he proposed finishing Friday. By doing that, he could get the materials moving for the next project the following week. The crew would be able to start immediately on Monday, instead of losing half the day getting organized and fighting Boston traffic. Even with the overtime, it was the right call.
What gave him the ability to make that call?
Context.
He understood how the job made money and what finishing early would make possible for the next project. Knowing the business empowered him to do what was right for the business.
Every leader I know would love their team to take more ownership. They want them to make better decisions, more often — without asking their manager or waiting around for the weekly meeting.
But ask yourself: Why can’t they?
Do they have information they need to make those decisions? How much does the average person at your company really understand about how your business works?
When we first bought Adtech, we started to ask ourselves those questions.
We’d grown into a 150-person AV services company. A single project could touch 17 people before it was finished. Sales, engineering, purchasing, project management, field technicians, engineers. Everybody influenced a piece of the outcome.
Of course we wanted people to take more ownership at each step. We knew some of the best companies in the world had frontline teams delivering legendary service without waiting on approval from management. How did they pull that off?
We wanted our technicians to know whether to stay late or head home. We wanted the service team to know when to send someone immediately and when to stick to the schedule, and purchasing to know when to overnight product and when standard shipping was fine.
We’d talked about our values at town halls and in performance reviews. We’d shared stories of other companies going above and beyond. So why wasn’t it working? Why wasn’t the team thinking the way we were?
Eventually, we realized we were asking people to make those decisions without giving them the information we used to make them.
That had to change.
To do this, we had a metaphor. Our whole company made fun of it … but they really loved it. We called it “the bathtub.”
Every week at our company town hall, our CFO, Erik — who’s now our CFO at CultureWise — would walk the entire team through it.
Sales bookings were the water coming in.
Project backlog was the water sitting in the tub: work we'd sold but hadn't completed yet.
Earned revenue was the water going down the drain as we finished the work.
The bathtub: bookings coming in, backlog sitting in the tub, revenue going down the drain.
It was an incredibly basic metaphor. We repeated it so often that people started rolling their eyes.
But if you asked any employee at the time, no matter what department, they could tell you what bookings meant, why the backlog was important, and what happened if a job ran too long. We also showed an “all company” dashboard each week with real-time stats that we used to talk about our company goals, that week’s numbers, and what was going well or poorly.
With that baseline information, we started to build the context so that everyone understood what was important in order to have a healthy business.
This didn’t happen overnight, but once we started to share more (week after week), our team started to get more curious, and slowly but surely, the team’s perspective started to shift. Take the example I gave of the technician who finished a job Friday instead of Monday. When small decisions like that started happening throughout the whole business, our entire team dynamic changed. And the more other staff saw those decisions being made, the more they felt comfortable making them themselves.
One of the biggest dynamic shifts here was that metrics were no longer intimidating. A “red” project no longer felt like a bad grade handed down by management. Instead, our team saw the numbers as an opportunity to learn and improve. That way, the team had the context to look deeper, understand what had happened and make the next job better.
We made sure that everyone knew it was OK to make mistakes, to miss something, and to admit we needed help. That's how we collectively got better.
The idea behind sharing context came together for us through a few places. Around that time, we were reading Patty McCord's Powerful: Building a Culture of Freedom and Responsibility and studying Netflix's “context, not control” approach.
One idea from McCord always stuck with me: if somebody working for you seems clueless, there's a decent chance they haven't been given the information they need.
I see CEOs fall into this gap all the time.
They want people to "act like owners," yet the people doing the work often don't know what makes a project profitable or what the company is trying to accomplish right now. They may have no idea which tradeoffs leadership would willingly make.
That doesn’t mean you have to open every financial statement to everybody.
At Adtech, a technician didn't need access to company financial statements. But they did need to know that we targeted roughly 30% gross margin on projects. If we sold a job at 19%, the team knew we had work to do. That small piece of information changed the way they looked at the job.
You might ask: What motivated them to do what’s best for the business? I hear that concern, too. Some leaders think employees need a bonus tied to an outcome before they'll care.
Our experience was different. We learned that most humans want a few things from work: autonomy, to learn, to be paid well, and to feel like they are meaningfully contributing to something. Giving them visibility into the business helped them understand what good work looked like and how they could make it happen.
Think about a few of the decisions you wish your employees would make without you. Then think about what you know when you make those decisions.
Do they know it too?
Find a regular place in the rhythm of your business to teach people how the company works. Share the information that helps them make decisions, and keep talking about it over and over. One explanation at your annual meeting isn’t enough. Consistency beats intensity.
You need either a rule that tells someone to do A or B, or you need to give them enough context to make the decision themselves. Before you add another rule, think about whether better context would let your people make the call on their own, instead.
Thanks for reading. See you in three weeks.
– Alex