1. Decide what you’re trying to change
John M. Ferraro and Michael Di Nardo were working at an insurance brokerage with a highly structured management style: “This is your job; this is what you do,” as Ferraro describes it. Employees felt frustrated by the hierarchy, so when Ferraro and Di Nardo left to start their own firm, they decided to lead differently. “We wanted the complete opposite for ourselves,” Ferraro says.
2. Confirm that it works
Ferraro and Di Nardo launched Oracle RMS with two employees and gave them a lot of leeway to do what they felt needed to be done to make improvements and grow the fledgling business. Early on, it was clearly working. “They did a great job, and we didn’t have to keep an eye on them,” Ferraro says. “That made us think, ‘What a philosophy! Imagine if we could build the business by hiring good people and letting them do their jobs without micromanaging them. There would be fewer layers of management.’”
3. Decide where you’ll add flexibility
“You can’t have a business without any structure, so we have job descriptions and set responsibilities, but we give people the ability to go beyond it if they wish, and there are really no boundaries,” Ferraro says.
As a comparison, he describes the sales process at his old firm. “Our job was to bring in new business, so we’d meet with a new client, take down his or her information, then go back to the office and hand the information off to the marketing department,” Ferraro says. “That’s where our job ended. The marketing department would negotiate a rate with the insurance company and issue a proposal. A lot of us in sales felt we were being taken away from the central part of the process because we were not involved in the marketing. So, in addition to frustrating employees, it created a lot of conflict between the two departments.”
At Oracle RMS, if account executives want to, they can submit the risk survey to their account managers for marketing, or they can deal with the marketing themselves. “They make the choice based on what they feel is right for the client,” Ferraro says. Also, to avoid staff division, every account executive is assigned to one account manager so that the two can develop their own synergy.
4. Seek employee feedback
Employees often complain that at their former jobs, they were given work flows that had to be followed. “If they had an idea for doing things better, tough; they weren’t allowed to do it,” Ferraro says. “You’re basically telling someone he or she has been hired not to think but to do a job. But what if the employee’s way is better? We listen, and we say, ‘Go ahead, try it; then come back and let us know what happened.’”
5. Don’t go too far
However intent Ferraro and Di Nardo are on creating flexibility and encouraging innovation, they understand that there are lines that must not be crossed, particularly given that they operate in a highly regulated industry. “I don’t want to give people the impression that we run an organization where everyone is doing what they want, because that’s not the case,” Ferraro says. “We want our employees to become experts, and when experts make decisions, they don’t usually consult a manual but [instead decide] based on experience and intuition.”
Ferraro feels that many companies look at structure the wrong way. “Most companies put safeguards in place to prevent people from making mistakes and failing—because they automatically assume that they will do something to put the company in jeopardy,” he says. “We tell our staff what our guidelines are, and we require that they pursue new ideas within the rules of our governing body, but we don’t assume they’ll fail or do something wrong. We figure, let’s provide them with the flexibility first, and if they [get too off track], we’ll go back and take away the flexibility. But we see no reason to punish the whole for the few. Fortunately, we haven’t had any problems.”
6. Don’t be afraid to change
Oracle RMS has grown to 16 people in just two years, which suggests that Ferraro’s leadership style is working. However, he understands that the company’s small size has made management easy, so he’s willing to make modifications as the company expands.