{"id":21146,"date":"2023-05-19T17:51:00","date_gmt":"2023-05-19T17:51:00","guid":{"rendered":"https:\/\/www.lemonade.com\/blog\/?p=21146"},"modified":"2023-06-28T22:50:42","modified_gmt":"2023-06-28T22:50:42","slug":"lemonade-company-model","status":"publish","type":"post","link":"https:\/\/www.lemonade.com\/blog\/lemonade-company-model\/","title":{"rendered":"Building Lemonade for the Future"},"content":{"rendered":"\n

There\u2019s something special about working for a great, small startup\u2014the work that you do matters, you understand exactly how it connects to the business objectives, and you feel mission-critical. If a new project or initiative launches, you probably had something to do with it. <\/p>\n\n\n\n

Unfortunately, the role and uniqueness of the individual can get lost during periods of rapid growth. <\/p>\n\n\n\n

Lemonade managed to grow from 10 to 200 team members without too much structure or friction. This was because of our great people and a collaborative culture, but also the fact that we only had two products in market during that time period. <\/p>\n\n\n\n

The real challenge has been scaling from 200 to 1,000\u2014while now offering five<\/em> products\u2014without losing the special fabric that defines our culture. <\/p>\n\n\n\n

As Lemonade\u2019s COO, I spend a lot of my time thinking about the various facets of the \u201cautonomous organization<\/a>,\u201d a vision Lemonade’s cofounder and co-CEO Shai Wininger articulated back in our very early days. The question I mull over, is how org architecture can support scaling gracefully versus simply growing. <\/p>\n\n\n\n

One solution? We’ve adopted and modified the Company Model, initially popularized by Spotify. It’s a way of structuring our organization that helps us become as autonomous as humanly possible. <\/p>\n\n\n\n

Under the broad umbrella of Lemonade, you\u2019ll now find discrete \u201cCompanies\u201d\u2014one for each product line, from renters<\/a> to homeowners<\/a>, pet health<\/a>, term life<\/a>, and car<\/a>.  Each Company is composed of all the teams and functions necessary to run its business. The goal is simple: achieve our business goals, while also optimizing for speed and agility. <\/p>\n\n\n\n

And while many brands have applied this model’s organizational principles of squads, tribes, and so on to engineering and product teams, we’ve gone several steps further\u2014applying them across the board, from Growth to Claims Experience, and beyond. <\/p>\n\n\n\n

The Company Model isn’t suitable for everyone. But if your organization is multi-product, and scaling rapidly, it has clear benefits.<\/p>\n\n\n\n

Why change? What wasn\u2019t working?<\/strong><\/h3>\n\n\n\n

Standard hierarchical structures lead to interdepartmental dependencies. They slow execution. They introduce red tape and inhibit innovation. Sound familiar?<\/p>\n\n\n\n

Old ways of organizing a company produce what we might call \u201cmatrix mania,\u201d a general inability to steer the ship.<\/p>\n\n\n

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They may look happy, but they’re suffering from “matrix mania.”<\/figcaption><\/figure>\n<\/div>\n\n\n

In a traditional corporate structure, you\u2019ll find multiple teams all charging toward the same goals, but from different perspectives. It wastes time and resources, since they\u2019re all scrambling for the same, limited resources to advance those goals. <\/p>\n\n\n\n

What does the Company Model look like, in basic terms?<\/strong><\/h3>\n\n\n\n

While Lemonade\u2019s Company Model owes a lot to the Spotify model, we\u2019ve taken elements of that structure and pushed them forward in unique ways. Without getting too into the weeds, let\u2019s briefly sketch out the structure and define some key terms.<\/p>\n\n\n\n

What\u2019s unique at Lemonade is that we\u2019ve taken the model\u2019s basic principles of autonomy and clear objectives, and applied them well beyond our Product and Engineering teams. The structure at Lemonade encompasses Growth, Customer Experience, and Insurance disciplines, among many others.<\/p>\n\n\n\n

Let’s take a quick look at how the Company Model is organized at Lemonade, from the bottom up.<\/p>\n\n\n\n

Central to the entire experience is a Lemonade Maker<\/strong> (our term for every employee). Each Maker at Lemonade directly contributes to and impacts on our business objectives. They understand exactly what their specialty and focus needs to be. <\/p>\n\n\n

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Makers are grouped together into Squads<\/strong>\u2014multi-functional, autonomous teams that have clear objectives and scope. A squad is nimble and capable of having a massive impact; it\u2019s \u201cdesigned to feel like a mini start-up,\u201d in the words of Spotify\u2019s Henrik Kniberg & Anders Ivarsson<\/a>. <\/p>\n\n\n\n

Above that, we find Tribes<\/strong>\u2014a cluster of several squads, all operating under unified leadership. <\/p>\n\n\n\n

Climbing a bit higher in the structure we find the Company<\/strong>. In Lemonade\u2019s case, that means Pet, Car, Homeowners, and so on. A Company is an autonomous group within Lemonade focused on achieving its distinct goals, derived from Lemonade’s overall business goals. <\/p>\n\n\n\n

Companies are composed of Tribes, Squads, and individual contributors (ICs)<\/strong>\u2014Makers who contribute to the company as a whole, but not in the context of a squad. A BizOps Specialist or a Data Scientist are both examples of ICs. <\/p>\n\n\n\n

Makers who work for multiple Companies<\/h3>\n\n\n\n

In order to make sure we \u201cdon\u2019t do things twice,\u201d and have consistency throughout the companies in terms of how they\u2019re run, we maintain separate, horizontal departments<\/strong> that support all<\/em> business lines. <\/p>\n\n\n\n

These groups are classified as either \u201csupport functions\u201d (Finance, Comms, Office Ops) or “platforms” (cross-functional groups\u2014like Growth or Data\u2014that build the infrastructure, products, and tools that help support multiple companies).<\/p>\n\n\n\n

What the Company Model provides<\/strong><\/h3>\n\n\n\n

The Company Model helps align our internal structure with our broader values, both from a professional and cultural perspective. As always, we\u2019re focused on autonomy, accountability, and high-quality execution\u2014all while designing magical customer experiences. <\/p>\n\n\n\n

There are many benefits we\u2019re already seeing after almost two years of implementing the model, while launching a few new products along the way:<\/p>\n\n\n\n