Let me tell you a story about great leadership that doesn’t involve a leader at all. Back in the early days of Gusto, each December to February period (known as “End of Year”) was make-or-break for the small payroll company. These were the months when there was the most work to onboard new customers and to deliver tax forms to existing customers.

A strong End of Year would mean a strong growth trajectory for the coming months, but a poor End of Year would put the company on a much less ambitious path.

It was during one of these critical periods when the company had a serious issue; a core part of the service stopped working and it affected a large portion of Gusto’s customers. Even worse - nobody in the company knew why.

Given the stakes involved, how should Gusto’s leaders intervene? Before we answer this question, we need to better understand the type of leadership style and culture that exists at companies like this, which I will describe as a culture of empowerment.

What is empowerment?

An Empowerment Culture is an environment where employees have the knowledge, confidence, and authority to make decisions and take actions to affect their day-to-day work. Successfully implemented, empowerment is a powerful motivator because employees will take greater ownership over their work, will feel a stronger sense of accomplishment when they are successful, and will learn more from their experiences when they make mistakes.

“Never tell people how to do things. Tell them what to do, and they will surprise you with their ingenuity.” — George Patton (US Army General during World War II), War As I Knew It

Creating a culture of empowerment is a task bigger than any single leader; it must be a core component of an organizational culture as a whole and contributed to by everyone. There are four main attributes of a culture of empowerment:

First, information is freely shared across the business. People are empowered when they are able to be informed about what is happening around them. Empowerment leaders work to communicate activities and plans, transparently sharing both the good and the not-so-good news. And they invest in a data infrastructure and documentation to make it possible for teammates to stay updated on the most relevant company information.

Second, feedback on projects and plans is receptively heard. People are empowered when they can affect change in parts of the business that they think can be improved. In an empowerment culture, teammates are comfortable asking questions about—and challenging — how things are done in other parts of the business. This is especially true for challenging the plans and decisions of company leaders.

Third, the majority of decisions are made by the people closest to the topic. People are empowered when they can make day-to-day decisions to deliver successfully on their responsibilities. An empowering leader optimizes to push more of the decision-making to the team-level or individual-level rather than the leadership-level. As much as possible, decisions are made by people who own a particular topic (e.g. a technology, customer use case, or KPI) that is most affected by the decision.

Fourth, when leaders make decisions, the most affected people are typically involved. People are empowered when they can provide input on, and understand the rationale of, decisions which significantly affect their day-to-day work. An empowering leader seeks to ensure that teammates have a chance to have their concerns heard, especially for decisions that are disruptive to these teammates.

The most challenging part about creating an empowering work environment is that it must be lived throughout the organizational culture. In the following sections I’ll share why this is true and what it looks like in practice.


Empowerment must come from the leaders

It’s only possible to create an empowerment culture if your company leadership truly believes in this approach. Your manager and their manager— all the way up to your CEO — must strive to foster empowerment. And company leadership needs to be more than just fair-weather fans of empowerment. They need to continue promoting this approach even when the stakes are high, when they disagree with decision makers on important decisions.

Three of the four cultural attributes of empowerment listed above are more a matter of habit and process. This isn’t to say that implementation is easy though; it requires time and forethought. Transparent all hands meetings, an inclusive decision-making process, forums to ask questions and challenge ideas, and the public sharing of team goals are just a few tactics that can create the right environment. But the cultural attribute that is most challenging for leaders is giving a significant amount of the decision-making power to the teams and individuals. But despite the difficulty, this is the empowerment trait that is most needed from the top.

Despite a manager’s best efforts, their leaders can always overrule their ability to empower their team. And when this happens, it demonstrates that teammates are in fact not actually empowered to make their own decisions. Once my manager decided to solve an issue by setting up a special task force which included a PM on my team. Within this task force, my manager made a number of prioritization decisions with the intent to move quickly, without giving this PM a chance to shape the decisions. The result was that my PM was put in a tough position; he felt accountable for delivering a successful outcome for my leader’s decisions but he didn’t believe in some of the decisions and didn’t feel able to change them. When you see dis-empowering situations, like I did in this case, it’s important to bring the problem to the attention of your leader and work to find an alternative that leads to a better cultural- and business-outcome.

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