This Startup Launched Without Titles or a Traditional Business Structure. Here's What It's Doing Now. There's a right way to make a change.

Tracy Young and her cofounders knew the construction business and computer engineering, but they didn't know squat about organizational management. So when they launched their startup, PlanGrid, which digitizes blueprints, they "decided to run PlanGrid with no titles and a flat management structure. We were just going to build this business together," says Young. That worked fine for a while, but then…

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1. Stop defending your stupidity.

"When we hit around 50 employees, someone came up to me and asked what her career path was. I looked at her and wanted to say, "Don't you see we're all drowning in work? Why are you asking me about career paths? No one even likes career paths!' But these things matter. Basic business structures work and career paths are there for a reason. Our biggest mistake was trying to be creative about how we ran the business instead of focusing all that creativity on our product."

2. Test the solution.

"We could have unveiled some grand vision all at once, but instead we broke off several departments and recruited leaders. It was sensitive, to recruit a sales leader and give that person an official title. But there wasn't pushback, because everyone was so hungry for structure. As we had gotten bigger, politics had crept in. People wanted to own things but didn't have real ownership -- you can't just put a department on your LinkedIn profile, for instance. Seeing how staff reacted to the department structures was reassuring that we could make bigger changes."

3. Take your own medicine.

"My cofounders asked me to be CEO. I really didn't want to -- my cofounders are all so much more educated and older than I am. But they believed in me and pushed me to do it. And it was the right decision. PlanGrid has grown a lot in the past few years."

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4. Cement the change.

"We had a very serious all-hands meeting and unveiled a real org chart. I inverted the usual structure, because I think the most important people are the ones who write code and talk to users. So they're at the top, and leaders are at the bottom. I explained to everyone that all shit flows down. If there's an issue or a question, it has to flow down to the managers, the directors, eventually to me. We have 230 people now, and everyone knows where they fit on that chart."