Great startups are idea meritocracies

Most organisations make decisions based on hierarchy and position, so teams simply execute their leaders’ vision. In an idea meritocracy, opportunities are pursued based on their merit. Startups work best as idea meritocracies because they are idea-rich and resource-poor — prioritisation is crucial. Even a startup that expertly executes will fail if its strategy is flawed. Ray Dalio, the creator of the largest hedge fund in the world, coined this concept in his book Principles.

In an idea meritocracy, all people raise ideas, regardless of their position. Customer success employees raise product ideas; accountants suggest new ways of working to support teams; product managers recommend pricing strategy changes; junior staff submit ideas with managers from other groups; and customer service staff uncover content marketing ideas. People need to feel empowered to raise their voices for this to happen.

• Encourage detachment from one’s ideas. If you view your ideas as part of your identity, you will take it personally when others criticise or debate them. While tact can help here, it’s also vital for individuals to treat their own ideas with the same detachment they apply to other people’s ideas.
• Recognise (and never punish) idea sharing. Celebrate the act of raising ideas. Never make someone feel bad for speaking up, no matter how terrible their concept is.
• Let new ideas breathe. Enthusiasm for an idea starts high and fades over time. It’s easier to honestly debate the merits of an idea after the initial enthusiasm has worn off.
• Keep track of ideas. It will feel pointless to raise new ideas if they tend to fall by the wayside. You don’t have to act on every idea (in fact, most ideas should fail), but every idea should receive some consideration and constructive feedback.
• Create a well-informed organisation. The best ideas are grounded in fact and reason. Collect the data you need to inspire new ideas and ground debates in reality.

An organisation with freely flowing ideas has many more opportunities to consider than an organisation where most ideas come from management. To create an idea meritocracy, you need a way to determine the value of each idea so that you can focus on what will most move the needle.

• Standardise where ideas live. In an idea meritocracy, all teams receive many inbound ideas, which can be challenging to manage. Keep these in a queue for each team and manage them transparently.
• Standardise how you present ideas. A common way to outline ideas makes evaluating and prioritising ideas easier. Additionally, if you expect leaders to respond to all ideas, it’s only fair to expect those with ideas to put some effort into outlining them. I recommend an outcome-focused one-page document for every idea.
• Standardise how ideas are evaluated. For the best ideas to win, you need to know how good each idea is. In some cases, this comes down to a science: measuring conversion rates and revenue is easy. In others, it’s more of an art: it’s challenging to quantify the impact of some features before you build them. Think about what research, ideation, and general rigour you expect each idea to go through.
• Encourage (and make time for) rigorous debate. Debate is the best tool to evaluate the quality of an idea. For many people, this feels confronting at first, but a culture of healthy debate is the best way to come to quality decisions.

In an idea meritocracy, we frequently do the hard work to evaluate, teardown, and debate ideas. For the uninitiated, this can be an uncomfortable experience. But we achieve great outcomes by embracing this discomfort.