Event Recap: The Secret to Scaling a Tech Organization

On September 25th, 2013, I  attended the event, The Secret to Scaling a Tech Organization, presenting Gilt CTO, Michael Bryzek. This event was hosted by the New York Technology Council.

25 years ago, innovation happened in large research organizations handled by centralized bureaucracies. As a result, in those days, scaling technology was a slow and arduous process. But with the advent of the 21st century, the rise of the internet has changed this system. The bureaucratic model of managing innovative organizations, especially those that deal with technology, can no longer meet demands of the 21st century global economy. With social and economic paradigms shifting towards decentralization, how can today’s large scale businesses and organizations scale technology to meet the demands of today’s 21 century economy while still being innovative and efficient?

Michael Bryzek, CTO of Gilt, uses his organization as an example of the solution to this question. Gilt is a unique approach to online shopping where customers are given a limited amount of time (36 hours) to access discounted top brand products. This way, brands remain exclusive and customers get discounts on brand name goods.

But how does Gilt scale to accommodate not only the flexibility required for its market but also its overall growth? The innovation and efficiency required to create the systems that facilitate search engine optimization while exposing new brand products to customers on a daily basis under the umbrella of discreetness requires a new type of organizational model.  Since innovation is what drives the growth of start-ups, according to Bryzek, the secret to scaling a technology organization lies simply with the concept of trust. The ability of an organization to create an environment that cultivates innovation is tied to how individuals can interact with each other, as he says, “trust is an important ingredient to scale, recruiting, and innovate within any organization… Behind a company are people and if true trust is created within an organization, then people create great things.” In order to create the environment for innovation, the workplace setting must be merged with an environment where people can interact naturally.

Gilt’s organizational model is decentralized and rather than building bureaucratic hierarchies, they focus on fostering autonomous groups of specialists that are organized into teams. The problem with centralization and organizational hierarchies, according to Bryzek, is its slow speed of innovating ideas. When Gilt attempted to innovate (innovation is defined as not merely having an idea but also executing that idea) using a centralized model (a grand list of ideas), it could not keep up with the speed of the market because it took too long to come to a consensus on what idea they wanted to prioritize. As a result, the people at Gilt wanted to change this and focus on defining a strategy that quickly honed in areas that they want to invest in.

Under this new organization model, the prioritization of ideas must rely on KPI (Key performance indicator (metrics) KPI provides two advantages for an organization, in that, it fosters a debate on what matters to that organization and it provides a metric that justifies the prioritization of an idea. Within Gilt, the metric (such as how many people searched on Google and registered on Gilt in 30 days), will quickly drive the debate to the fundamental things that are important to the organization because an idea is tested empirically, for example: if Gilt had to decide on whether or not they should prioritize on developing a program that helps optimize the discreet searches for brand name Black dresses on Google or, they would check how many people searched on Google and registered.

However, the teams at Gilt aren’t merely a group of professionals divided into specialized positions in the organization. But what Gilt employs are teams of “smart and autonomous people. The teams are organized on the psychology of “people working together” where the members of the team decide what each other does based on what they learn from each other. Furthermore, going along with the paradigm of decentralization and autonomy, each team are afforded ownership of what they produce for Gilt (pieces of code and etc.) This way, if there is a problem with a certain program or platform, the teams that worked on them take notice and quickly fix it.

Therefore, the key to scaling in the 21st century is not to create innovation through centralization but to create the decentralized environment that cultivates innovation. That and a whole lot of trust!


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