TransferWise is London’s hottest startup, valued at $ 1 billion and growing fast.
But Kristo Käärmann, the co-founder of the international money transfer business, has revealed the company has a pretty unusual approach to management.
In a blog post last week, he said TransferWise doesn’t like to hire managers, instead letting natural team leaders emerge.
Käärmann says TransferWise has 450 employees but “in our entire history, we have hired only 12 people of the 450 directly into a team lead/manager position. 40% of them didn’t survive.”
He says the title manager is “deeply despised in the tech world” and here’s why:
It is slow. You task someone with building consensus and maintaining it. “It is a great idea, we’ll take it to the next product roadmap meeting“. You move responsibility from people who can deliver… to people who cannot.
It wastes brainwaves. Management overhead is the time, which should be spent on creating, building, recruiting, inspiring.
It kills creativity. I haven’t yet met a creative person, who likes to be told what to create.
It is misleading. The more removed you are from the place where rubber meets the tarmac – be it product code, sales calls, support emails — the poorer your insights and worse your decisions. You can’t expect managers to make better decisions than the team.
That’s not to say there’s no management at all. TransferWise has over 60 team leaders, but Käärmann says over 80% of them are first timers, promoted from within the team.
TransferWise like to manage their people by creating independent groups of workers that can ten find their own way. As they develop, a natural leader should emerge. Here’s Käärmann:
Someone in the team is helping others get unstuck, structures the shared tasks, she tells the rest of the org how the team is doing and where they need help. She gets a ton of street cred from her peers. She is the leader. Promotion will just be stating the obvious.
This way allows a structure to naturally emerge in theory and also empowers the new leader to take action, rather than run things up the chain of command.
That said, TransferWise has recently made a load of top level management hires, including a VP of engineering from PayPal and a CFO from Google.
Käärmann told me during a recent interview that this was part of “maturing” the team. In his blog post, he sheds more light on the search that led to hiring Harsh Sinha, the VP of engineering, and Matt Briers, CFO, writing:
Our VP Engineering search took me 18 months, 250 candidates, 48 founder interviews. We were lucky to reach Harsh from Paypal.
Occasionally, the team will go and hire themselves a lead. So did our finance team. They set up the search, case-studies and interviewing to bring Matt from Google.
You can read the full blog here.
NOW WATCH: Everyday phrases that even smart people say incorrectly