How we build a high performance team at Expensify
By David Barrett, Founder & CEO, Expensify
A CEO’s most important task is building a high performing team. That’s why at Expensify, my focus is on hiring amazing people and giving them the autonomy to make great things happen.
The most effective way to do this is by constructing the best team from the start. You must set the hiring bar high and continuously raise it. When you have high expectation in talent, you will never disappoint your employees and you’ll reap the benefits with great results.
What follows are my insights on building an amazing team and giving them autonomy to achieve the company vision.
Only hire amazing people.
I’ll get right to the point.
In large organizations, it’s common to see 20% of the company create all the value, while 80% just show up. There may be several reasons this happens at large companies, but I still believe hiring must focus on finding the few people who continually create value in whatever role they chose.
Mediocre people decentivize all the great people you have and you’re trying to hire. If you only have high quality people surrounded by high quality people, then you can create a team that exerts exponential output.
Of course, no organization sets out to hire mediocre people or poor performers. So here are my lessons for hiring.
Be patient, do not overhire
It takes incredible patience and discipline not to overhire. You must resist the temptation of “I could get to this opportunity if only we had a person to do x”. Instead, view each hire as bringing in a unique asset into the organization that will add value over a long period of time.
Every time you add a person to your team, you get a linear increase in productivity and an exponential increase in overhead. In the past when I wasn’t so focused on hiring amazing people, and more focused on filling a seat, I noticed that the overhead cost to bring in a new hire superseded the productivity they provided. That’s why you hold out and wait for an ‘A’ person to come along (I’ll explain the qualities of an ‘A’ person in the next section.)
Hiring is a very long and often tedious process, but the results are well worth the effort. If you’re not doing the hiring yourself, it means you need to assign hiring to another ‘A’ person. ‘A’ people hire, and attract, other ‘A’ people, whereas ‘B’ people attract ‘B’ and ‘C’ people, and mostly hire the latter.
What to look for in a hire
‘A’ people are superstars. They’re 10–100 times more effective than an average person and incredibly hard to find. Identifying them takes time, which is why the hiring process at Expensify takes a while. It means that my current team might feel like they’re sinking at times, but it wouldn’t be fair to them if I brought someone in who does not perform to the company standard.
‘A’ people have incredible natural talent. They have a deep humility about their capabilities, which creates a willingness to work in teams.
The best way to get to these superstars is at the very start of their careers. In some ways it means you take a risk because you’re not hiring based on past experience, but there’s a simple reason you want to try to hire superstars right out of school. Once they join the workforce, they gain experience, and develop a network, and very quickly they become unattainable. ‘A’ people never have to look for jobs. Opportunities just fall into their laps.
Those looking jobs, by definition, are not superstars.
That’s why unemployed ‘A’ talent is not just scarce in Silicon Valley, it’s non-existent.
Another tactic is to look to other cities. Superstars exist in every city around the world and may be overlooked or not have the right opportunities in their communities. Many CEOs, including myself, seek them out. We hire outside the local market. We hire from San Francisco, or from the East Coast, or even overseas.
Hire stem cells
We are the exact opposite to Netflix.
Netflix hires very skilled specialists to fix very specific problems. Once those problems go away, that person needs to leave or reapply for a different job. They’re an organization that is unapologetically built upon mercenaries. Everyone there is highly paid and focused on a single objective.
We don’t have specialists. Everyone in our company has the capacity to execute on every task (although there are distinctions between technical and non-technical roles). Everyone is a stem cell. They do a certain task for a while and when it’s no longer needed, then they do something different. They may not always know what they’re doing, but they figure it out as they go along.
This approach is terrifying for a lot of people. Many leaders define “qualified” as someone who has performed a certain task 100 times. I define “qualified” as someone with natural talent and a deep passion for learning and the company.
For example, we recently announced that we’ll be hosting our first conference in May. The person in charge of it has never hosted a conference before and yet, I know she will knock it out of the park. Why? Because she will approach the challenge with no preconceived notions of how to get it done and will come up with the best solutions. Our conference will be great because it’ll be different than any conference anyone has ever been to.
Give your employees autonomy
Now assuming you’re successful in filling your organization with superstars, the second important step is to help them understand the vision and objectives and then get out of their way.
True autonomy is a tricky thing
I believe that the most successful leaders are those who offer their employees a vision and trust that they will achieve it with little or no instruction. The most successful employees are those who are autonomous. They step up to the challenge and help bring the leader’s vision into reality.
In order to become truly autonomous, leaders must abandon traditional organizational structures and processes. Easier said than done. Having a loosely defined leadership structure when the rest of the world isn’t compatible with it has its set of challenges. But when your team is made up of ‘A’ people that you trust, it’s entirely possible.
Let go of structure and process
Structure and processes are designed for a different set of people than the ‘A’ people I employ. My people are highly skilled and trustworthy. Sure, they might fail once in awhile but they will also succeed wildly.
When you trust your employees, metrics like OKRs (Objectives and Key Results) aren’t necessary. In fact, I think they’re bullshit. We don’t use numbers to measure performance. I trust that my employees work hard and pay close attention to what’s working and what’s not. If something isn’t working, I trust that they’ll alter their behavior to make it work. They pay attention to what’s working and double down on that.
No one wants to be reduced to a number. I feel like any organization that does that will turn away the best people.
Cultivate leaders, don’t hire them
No one likes to be managed, but everyone likes to be led. That’s why real leaders become elected by their peers vs. given a title and org structure. We have about 100 people at Expensify and three levels of management. Being a leader here doesn’t mean you have any direct reports. It just means you stepped up in an area and we’re going to formalize it, so that you can influence the rest of the company and new hires to model your behavior.
I believe that leaders are born over time. After awhile, you’ll notice a couple of your employees stand out. They’ll take initiative, lead discussions, or do something that shows they take a great interest in the success of the team. When you recognize this behavior in an employee, fan that flame, but don’t smother it.
Some people don’t have interest in being a manager, so you have to ease them into the role, especially when they don’t feel like they’re ready. If an employee is management material, encourage them gently once they’ve established themselves amongst their peers. Then assign them the minimal title necessary in order to formalize what happened informally.
Most importantly, avoid hiring managers from the outside. Hiring from the outside instead of promoting within disrupts the internal leadership structure and positions the new hire as an enemy to the rest of the company. Without any relationships inside the organization, you’re just setting them up for failure.
We do things a little differently at Expensify, but it works. There’s no reason why the formula wouldn’t work at another startup, or even at a large organization.
It’s okay to be super selective about who you bring back to the team.
When hiring, don’t limit your search. Look for ‘A’ talent beyond your backyard. Learn which university grads are accomplishing big things and go after them. Don’t wait until another company scoops them up. It’ll be too late.
Once you have a team of ‘A’ talent in place, trust them. Give them the freedom to make mistakes. Let them figure out challenges on their own.
What happens when you you employ the best possible people? As a leader you get to focus more on vision and strategy and you get to take a step back and watch them make magic.
David is the founder and CEO of Expensify and an all around alpha geek. David Barrett started programming at the early age of 6 and has been aspiring to become an expense report magnate ever since. After a brief hiatus for world travel, technical writing, project management, David started Expensify in 2008 to make the world a better place, one expense report at a time. Expensify was recently named one of the Most Innovative Companies in 2015 by FastCompany. A pioneer in the expense management space, Expensify has become the model for the modern expense solution.