Smarkets: Online betting company breaking rules with ‘self-management’ structure

CATERED lunches, indefinite leave, and setting your own pay sound like a luxury jaunt rather than a day job, but here, they’re all normal.

Supplied Editorial Jason Trost

RESTAURANT-catered lunches, free football tickets, unlimited holidays and getting paid what you like sounds more like a luxury jaunt than a day job.

But that’s the reality for the team at Smarkets, an online betting company based near London’s Silicon Roundabout. The business is run with a “self-management” structure meaning there are no job titles or defined tasks. Everyone directs their energy where they want, every time they’re at work.

“I think in 50 years all companies will be doing it,“ co-founder and CEO Jason Trost told news.com.au. “Everybody has the ability to make any decision within the organisation as long as they seek advice. The bigger the decision the more people you should seek advice from.

“If you want to make a major decision, you will probably need to seek advice from everybody.”

And it’s working. The online betting company earned more than $10 million profit before interest and taxes last year and is in the process of expanding their operations, which uses social media to generate odds.

Mr Trost said he decided to ditch the traditional management handbook after finding it time-consuming and cumbersome. In the last six months he’s worked to transform the business into a place where staff can set their own salary, leave and tasks without having to be managed into submission by a military-style heirachy.

“The organisation says we trust you because you’re an intelligent agent and you will make the right decision. There’s no need to have the supervisions that traditional companies force you to have,” he said.

“We’re basically coming from a position of trust. The reason why I think that’s exciting is that people enjoy working more, because [in every job] how much of that is just doing infrastructure stuff?

“From requesting holidays to telling people you’re sick to the whole salary review process to what happens to the head count, just a huge amount of corporate energy is devoted to maintaining that state. It’s inefficient and people don’t like it.”

WELCOME TO FLATLAND

The idea was inspired by US gaming company Valve, who famously named their workplace “flatland” when they adopted an ethos with no bosses and no rules, leading it to be dubbed a billion dollar company with no one in charge.

The 400-strong team of game designers and engineers is also responsible for Steam, a kind of iTunes for video games, and works as a self-funded entity where all intellectual property is owned by staff.

An online handbook describing the culture (which can be edited and improved by anyone in the team) said the flatland structure is a shorthand way of saving nobody “reports to” anyone else.

“We do have a founder/president, but even he isn’t your manager. This company is yours to steer — toward opportunities and away from risks. You have the power to green-light projects. You have the power to ship products,” it reads.

Valve’s ‘flatland’ structure is found in plenty of other tech companies, but makes Google look positively old-school in comparison. Picture: AP Photo/Jeff Chiu.

Inside, staff can wheel around their desks to suit the project they’re working on, which is their choice “100 per cent” of the time. Workers are encouraged to take advantage of perks like laundry and massage service and “don’t worry that somebody’s going to judge you.” Anyone feeling stressed is welcome to take a break anytime and they all go on holiday together once a year.

Sound ideal? Career coach Alice Stapleton said flat management styles can be ideal for gen Y and Millenial workers who want a hierarchy-free environment.

“They also offer the opportunity to be immediately involved in strategic thinking, idea generation, and decision making, which this generation craves and enjoys,” she said, adding they allow those with leadership abilities to thrive rather than managers being chosen as a reward for long service.

They also suit senior managers who want to stay close to the coalface rather than being swamped with dull management tasks. However it’s not everyone’s cup of tea and is best suited to those who are self-motivated, assertive and open-minded.

“If you prefer structure and work better under the authority and direction of others, I doubt this model would work for you. If you see promotion as a form of success and reward then you might find this model frustrating,” she said.

‘WORK IN PROGRESS’

For Mr Trost, building a self-management culture hasn’t happened overnight.

He said sometimes it can work brilliantly, like when a conscientious engineer took it upon themselves to read pages of compliance data and submit information for a regulatory approval. Other times, it can be a disaster, like when a hardware upgrade was due to take place and it was revealed no one was in charge and they had “more downtime” than was ideal.

“It’s very unintuitive. The reason is because society teaches us to follow leaders. It’s really hard for people to get used to not having that kind of figure that tells them what to do.”

At Smarkets, the salary issue is also still in “transition” with new staff asked to select where they see themselves fitting among public salary data attached to roles, but not names.

“In the future we will show new candidates everybody’s salary in the company and they will see where they fit naturally,” he said, adding that staff turnover rates are under 10 per cent every year.

“It’s self-regulated because all the salaries are public in the company, so if you take the piss you’re not going to have happy colleagues. But it’s built around trust, so when you trust people they don’t do crazy things.”

Ms Stapleton said again, this strategy suits some better than others. While on the one hand it can promote transparency and openness, it can be harder to accept for those who are less confident in their abilities.

“Those with low self-esteem however might find this approach destructive, breeding unhealthy comparisons, resentment towards the higher achievers, and the opposite effect on performance,” she said.

“Both approaches need to be implemented with care, and managed sensitively and appropriately for them to have the desired effect, whatever that might be — which also needs to be made clear from the outset.”

Would you like to work in this kind of environment? Continue the conversation on Twitter @NewscomauHQ | @Victoria_Craw| @Jasontrost