#151 - Interview with Dan Teran, Founder of Managed by Q
Building, operating, and selling a tech-enabled service business with Dan Teran, former CEO of Managed By Q and Head of Corp. Dev. at WeWork
Why happy employees help create happy customers
The opportunity in tech enabled services
His role in M&A at WeWork
His thoughts on the office and big cities post-pandemic
If I've learned one thing from working at a high-growth, highly dynamic technology company over the last two years, it's the critical need to balance structure with flexibility. In more technical terms, all organizations have two forces operating against each other: Control Systems and Creative Systems. Organizations that overweight Control Systems (e.g. the DMV) have very little creativity, while organizations that overweight Creative Systems (e.g. the constantly pivoting startup) have lots of creativity but no controls in place. The tension between Control Systems and Creative Systems - that ideal balance between structure and flexibility - is called the "Adaptive Space", and organizations that maintain the right amount - which differs between organizations - tend to effectively foster innovation and produce superior results.
Adaptive Space is like the strategic cousin to the military concept of Commander's Intent. At the tactical level, as long as the agent understands the overarching objective and the purpose behind it, the task should largely be left to him to carry it out in the most effective manner possible. An organization full of order-takers will miss the mark on achieving its objectives because the "boots on the ground" fail to tie the tasks at hand to the overall mission and thus will miss opportunities to deliver exceptional value. Similarly, an organization full of rogue warriors will throw it into disarray. At the strategic level, Adaptive Space ensures that agents have the knowledge and resources to innovate on their tactical responsibilities as well as the organization's activities at-large.
In order to enable innovation, organizations must create Adaptive Space, and those that do so typically share a few common traits. First, organizations that innovate are often subscribers to a high-level goal-setting system (e.g. OKRs) that aligns all employees on the strategic priorities of the company. Additionally, they give their employees dedicated time and money to innovate; counter-intuitively, constraints of time and resources foster creativity by effectively building a framework for what innovation can occur, rather than leaving employees in the wide open space of "anything is possible" with nothing to latch onto. And perhaps most importantly, organizations that enable innovation via providing Adaptive Space are meritocratic and reward employees responsible for new innovations.
While most businesses tend to skew to one side of the structure-flexibility spectrum, it is those companies that find that equilibrium that innovate and excel the most.