Leading in a company where the staff choose the length of their holidays.


How do you lead in a company where staff can choose the length of their holidays, how much sick leave they take and how to manage their own expenses?

Can't imagine it? Neither could Dragana Ljubisavljevic when she first heard about it from Matt Blumberg, the CEO and founder of Return Path, the worldwide leader in email intelligence.  Now Ljubisavljevic is Return Path's Managing Director EMEA based in London, and puts into practice this 'People First' leadership philosophy every day.

"When I first heard about the company culture I thought it was some kind of Harvard Business School-style experiment, because that's where big thought leadership ideas often originate," says Ljubisavljevic.  "But it soon became clear that Return Path was putting it into practice throughout the company. Now I do too - and it works."

So what is it? People First is a leadership philosophy that means prioritising, empowering and trusting your employees. This is in stark contrast to many organisations where shareholders come first and staff last, but Blumberg has turned this on its head. He explains: "Putting the emphasis on our employees means they provide the best service to our customers, and that in turn provides the best returns for our investors. I can't prove there is a straight line from this policy to profitability but I'll bet there is a correlation."

Each company adopting the People First philosophy chooses how to put it into practice. At Return Path that means no cap on vacation time provided it is cleared with managers, an expenses policy that relies on staff to exercise common sense and spend the company's money as if it was their own, a sick leave policy that allows employees to take the time they need, the ability to work from home if prearranged and a flexible parental leave policy that offers more than the local statutory entitlement. There is no hierarchy - staff are seen as equals doing different jobs.

Don't people take advantage? No, says Angela Baldonero, Return Path's Senior Vice President of People.  "We allow people to take the leave they need, but in exchange we expect them to work hard and live our company values. They know they still have to get their jobs done and that would not happen if they had two weeks off each month. So in practice we have seen no abuse of the open vacation policy."

Transparency is one of the keys to making the philosophy work.

"Financial information is shared with everyone so each employee can see how their work impacts on the whole organisation," says Baldonero. "If people want extra holidays, for instance, they are responsible for seeing that their role is covered."

Success also relies on recruiting people who can work within this collaborative culture. "People have to be willing to work within this new social compact," says Blumberg. "Ultimately you may have to say goodbye to people who cannot fit into the culture."

It sounds reminiscent of a start-up in its early days, when a handful of employees who all understand the organisation's goals pull together to reach them, and in return get a lot of flexibility. "It's like the best elements of small company culture scaled up for a big company," says Blumberg.  Return Path employs about 300 people in the USA and Canada and an additional 75 around the world in England, France, Germany, Brazil and Australia.

So what does it means for leaders? Ljubisavljevic says: "You cannot be a manager in the traditional sense, telling people what to do, being directive and demanding. Here leadership is about persuasion, negotiation, discussing, advising and supporting. Constant unfettered communication is essential. My first question to my team is 'What can I do to help you?'"

Sounds easy, but is it?

"Our People First culture requires more from leaders than usual," says Ljubisavljevic. "The challenge is to help everyone understand their part in the business process. It's about peer accountability, almost having a contract with your peers about meeting goals."

Return Path leadership training involves more than practical skills such as performance evaluation. Blumberg says: "It emphasises the need for faith in employees, active listening, self-awareness and self-regulation, all critical to empathy and influence over people."

At Return Path leaders are also expected to see employees in a holistic way. "You have to understand that you are managing the whole employee," says Ljubisavljevic. "For instance, if family circumstances meant a high performer had to move to a location where we have no office, or could only work a four day weeks for a period, we would be very likely to allow remote working or shorter hours."

All this may be fine in the American technology sector, but how does it translate to other cultures? Ljubisavljevic says: "People tend to be similar everywhere so even though there are some cultural nuances, the people first approach leads to happy people which results in high performance and high growth. European turnover grew by 50 per cent in 2012 and is on track to grow by 40 per cent in 2013...I would not have things any other way."