Alison Eyring’s Insights on Airbnb
Excerpted from Ch. 5 of Pacing for Growth: Why Intelligent Restraint Drives Long-term Success, by Alison Eyring (Berrett-Koehler Publishers, 2017)
What’s Better than Vision? Focus. — A Case Study of Airbnb
Airbnb is an online accommodation marketplace for people to list, find, and book unique places to stay around the world. It was set up to “help create a world where you can belong anywhere,” and that remains its mission.
Established in August 2008 as the brainchild of Brian Chesky, Joe Gebbia, and Nathan Blecharczyk, Airbnb has grown larger than any other hotel chain in the world. From an original concept of renting out air beds and providing breakfast (hence airbed and breakfast), by 2014 Airbnb had notched up nearly 70 million nights booked and more than two million listings.
Between 2014 and 2015, its growth doubled, and in the same year the company took on as many new staff as it had hired since its inception. But while such rapid growth generated impressive headlines, it became clear that if the company was to continue at this pace of head-count growth, its unique culture — the magic sauce that had got them so far — would be at risk.
Airbnb’s culture is built on a foundation of core values that are centered around the uniqueness of the global community and the lessons that the founders had learned along the way. Values such as “Be a Host” and “Embrace the Adventure” had been simple, understandable keys to getting the company off the ground in the first place.
The firm’s top leadership decided to stop, take a deep breath, and decide how they could sustain growth and at the same time protect the company’s unique culture.
The decision was made to stop and to “grow by design.”
Here’s how they did that. Airbnb’s leaders looked across the business and saw a large amount of duplication of work and many areas where people were not clear on roles and responsibilities. People were stepping over one another. The overlaps were damaging their focus. The company had grown so rapidly that no one had time to stop and simplify.
The starting point of Growth by Design was to think about what Airbnb would look like in the future. Leaders explored in detail what the business would look like if it were to double or quadruple. This creative process led them to questions about how they would operate and with whom they would partner. Most importantly, they asked how Airbnb would maintain its culture.
To tackle this last and critical concern, Airbnb started by defining its organizational philosophy, looking at what it would centralize versus decentralize. In some cases, leaders also made tough decisions to stop incremental increases to head count. This choice led to a deeper look into Airbnb’s existing resources and how they were utilized. As they looked at the future organization of Airbnb, they asked what would it look like if they started again from scratch. They insisted there be a logic for every single role. The aim was to do fewer things better and get more from the resources they had.
With Airbnb’s Growth by Design philosophy in place, the company began to focus on leveraging and growing its existing team and not simply recruiting more people externally. As leaders looked at the future organization, they found that too many of their current employees were involved in setting up partnerships. As they were growing their brand, they were being approached by a multitude of companies in every market where they had a presence. Potential partners came in lots of sizes and varieties, from music festivals to airlines. This inflow of interest resulted in their setting up too many small partnerships in too many locations.
A focus on bigger, more impactful partnerships meant fewer people were needed — but Airbnb decided not to lay off employees. Knowing that the vacation rental area needed people, the partnership-focused employees were reskilled. This decision created new career opportunities for them and reinforced their commitment to the growing company.
The Airbnb experience is a great example of how focus liberates the business to align people with capabilities needed to grow for the future. Part of that is about empowering other people to say no and helping them align their effort with what is most important to the business. That’s how Airbnb used Intelligent Restraint to reorient its growth path and build capabilities for growth.
Alison Eyring is a global thought leader on building organizational capacity for growth. Founder and Chief Executive Officer of Organisation Solutions, Alison has 25 years of experience in large-scale organization design and change and executive development. She works closely with global leaders and their organizations, including Royal/Dutch Shell, BHP Billiton, Chubb Group of Companies, NEC, and Thomson Reuters. She also serves as an adjunct Associate Professor at the National University of Singapore.
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