The power of freedom

Chapter 16. About Chaos and Order

Chaos and order are fascinating and sometimes interconnected processes in business. A common mistake when establishing systems is misidentifying the points of equilibrium. In entrepreneurial culture, chaos isn't always necessary; sometimes it's crucial to create clear order and structure. However, within these systems, it's critically important to define the degree of freedom.

Consider a physics example: in solid bodies, molecules occupy a very small percentage of the volume, with vacuum surrounding them – this represents space for freedom. Even in the hardest materials, molecules take up minimal space. If we could compress all the vacuum in the world to the density of molecules, you wouldn't believe how tiny our world would become.

When creating systems, it's essential to understand what space for freedom remains. Let me share a story that illustrates this idea. In the real estate sector, the key is structuring information. The company "Etagi" was one of the first to take a step toward transparency for clients. In the early days, no one published apartment listings online. Realtors would say, "Come to us; we have all the apartments," but kept the details secret.

We decided to change this approach and made information accessible to everyone. The challenge of translating listings into a shared platform was that each specialist feared losing their deal to another realtor. Realtors argued and insisted that their listings shouldn't be visible to everyone. Competition is important in entrepreneurship; it establishes clear criteria for determining who is right and who has the authority to speak. But if I start deciding who is right and who isn't, that's not correct. It's vital to discuss and collaboratively determine whether an idea is valid. This approach fosters a strong and sustainable long-term system.

My arguments for making property information accessible were straightforward.

First, if we don’t do it, someone else will. Other services will emerge that provide this information on their websites.

Second, if all we’re selling is the address of a property, we won’t last long. If our goal is to build a substantial business while focusing on closed information, we won’t get far.

Third, clients want this information. A business that doesn’t prioritize customer interests is doomed. If a client needs information and we withhold it for our own reasons, we've already lost.

Fourth, it will make our work easier. We’ll be bothered less. I told realtors they should value their time – there are countless calls from people who just burden them with unnecessary work. If someone isn’t genuinely interested, they shouldn’t call. This way, we save time for both the realtor and the client.

Everyone agreed that this was the right direction. We undertook a comprehensive effort and built a system where property data was organized into a clear and understandable structure for everyone: it included well-unified descriptions, up-to-date information, and high-quality photographs. Presenting our properties in this way became our competitive advantage. Clients turned to us because they couldn't find comprehensive information about apartments anywhere else, especially with all options presented by a single company, in an appealing format, and with maximum transparency.

It wasn’t easy for us to start photographing the properties. Nowadays, everyone has a smartphone with a good camera, but back in 2003, the situation was different. I remember returning from England, visiting the website https://www.foxtons.co.uk/, and seeing stunning, sharp photographs. I thought it would be beneficial to photograph every property. Later, when I visited their office, I saw those beautiful images displayed right in their windows. At that moment, I felt inspired to do something similar. I told my team, “Let’s do this.” My head of information department responded, “Why do we need this? It’s unrealistic.” They laughed at me: “Our realtors are going to photograph every property and post the photos online? Are you out of your mind? Our business is different; it’s closed, and we won’t expose our information to the public.” However, I was certain that if our company created quality content, we would stand out from our competitors so much that they wouldn’t be able to catch up. I set a goal: every apartment on our website would have high-quality photos. This would make our site look like a media outlet, and people would come to us for information – we would outpace everyone.

The team had other objections: “This is too expensive. The market charges 1000 rubles per photo. We won’t have enough money for 5000 properties!” We calculated the costs and came up with huge figures. I suggested thinking in a different direction: let’s hire someone, train them in photography, buy a camera – not the most expensive one – and give it a try.

Resistance came not only from management but also from realtors, especially when we decided to publish property addresses. They raised the question: “If everything is visible on the website, what will be our role? The profession of realtor will cease to exist!” As a leader, I continued to explain and “sell” the idea. I had a rule: no matter how confident I was in my correctness, if I couldn’t convince the team, it meant I hadn’t done my job thoroughly. I argued that if our only advantage was having the property address, it was an illusion that we were irreplaceable: anyone could go for a viewing and then approach the owner directly without a realtor to negotiate one-on-one. It’s important to focus not on limitations and scarcity but on the value of the service we can create for the client.

Why do I discuss my ideas with my team? Of course, I can make decisions on my own, and sometimes (very rarely) I do. However, even in those cases, I try to align my actions with the team. If the team supports my idea, it's my responsibility to bring it to life.

So, why do I engage in discussions about my ideas? Because I respect others' opinions and am open to changing my perspective if I'm convinced. But even if I don't change my mind, I still make an effort to implement the idea. This quality is common among many entrepreneurs.

As Ray Dalio mentioned in his book "Principles": "The most important thing you can do is learn from failure and cultivate humility and open-mindedness to increase your chances of success." In both organizations and life, successful experiences justify taking risks. From my calculations, only 2% of my ideas have failed. 98% of the initiatives I've brought to the team for discussion have turned out to be successful. That's why I trust my intuition. There are many people in our company whose opinions I value highly, often more than those of others.

Does an idea have a path? Yes, it does. If an idea isn't implemented quickly, it will lose its relevance over time. In entrepreneurship and organizational settings, acting swiftly is crucial. Nowadays, there are many types of organizations, such as teal organizations, and methods like Agile, all of which emphasize one key principle: speed.

If you spend too much time pondering an idea, you might miss the opportunity to implement it – much like watching a girl and losing the chance to propose, only to see her marry someone else. That's why I believe everything in an organization should happen quickly. One reason I create an environment for people with good intuition is to allow them to express themselves freely. This is an important part of our entrepreneurial culture and the internal fabric of our company.

I advocate for order and believe it's essential to adhere to high-level rules and procedures. Some may think that being wrong 2% of the time is insignificant, but that's not true. If you constantly deviate by 2%, you can lose your way. That's why I've established procedures that can hold back even good ideas when necessary. I believe this is the ideal formula for a leader, even a talented one.

These 2% represent the instances where my ideas weren't accepted. Here, the majority opinion comes into play. We have a management council and an executive committee responsible for strategic decisions.

At the operational level, the management council is in charge. I believe that a business led by someone who thinks only their opinion is correct will not achieve significant success.

Rules must be mixed with chaos. Any system requires an element of chaos and initiative, but there also needs to be a higher structure. For example, after graduating from university, Regina Dydalina joined our company as a legal assistant. I immediately noticed her incredible talent. Within a year, she was promoted to deputy head of the legal department, despite not having a law degree. When we considered Regina for the position of head of the legal department, part of the team objected: she doesn't have a higher legal education, she's only 23 years old – how can she lead 500 people?

I said, "Wait a minute. She meets all the requirements for this position, has passed all the competencies, and is delivering phenomenal results. Our metrics for problematic deal payouts are at an all-time low, and our speed is the best. She has excellent communication skills. Why should we hold her back because of formal prerequisites?" Regina became an outstanding department head and eventually rose to the position of executive director.

Some systems impose strict rules. We have rules too, and I believe that higher education is important. Having a degree indicates a person's attitude toward life. The type of degree and the mere possession of a diploma are separate issues. However, we often focus not on the diploma itself but on the individual and their abilities. We are perfectly fine with situations where someone hasn’t completed their education yet – like if a woman goes on maternity leave or takes an academic break. Let her finish her studies; that’s perfectly normal.

Order in business is important, but we cannot ignore the presence of chaos. It must always be taken into account within the system. When someone creates a system, the rules need to be clearly defined. Even when it comes to me, I don’t break those rules. I genuinely believe that if you establish rules, there shouldn’t be too many of them, but they all must be followed.

When my ideas are not accepted, I say, "No problem." I don’t get angry; on the contrary, I praise those who convince me I’m wrong. Everyone knows we value such people. The principles of modern business culture allow for discussion among employees and between them and management. People who have their own opinions are a significant part of our entrepreneurial culture.

Many leaders dislike it when employees have their own opinions. They think there are two viewpoints: theirs and the wrong one. That’s not how I operate. One of my goals is to ensure that people aren’t afraid to argue with me. I even publicly praise those who challenge me.

When we create a system of rules, I am extremely negative about directive management within "Etagi." I try to remove leaders who adhere to a directive style of work. Many directors have been fired for this reason. We have a culture where ideas and thoughts take precedence over any individual. I don’t believe that only those in higher positions can be right. When discussing decisions, I strive to establish a flat hierarchy. This is very important to me.

When the system emerges from chaos, everyone does as they please. Then we start introducing rules, which initially meets resistance. People rebel: "Are you trying to take away our freedom? Now we have to follow rules?" But it’s necessary. Freedom is great, but to build a large system, everyone needs to learn how to submit and work as a cohesive whole.

There’s a fine line between order and chaos. An ant colony operates as a single entity; ants work together seamlessly as one organism, and their society is complexly structured. Companies and managers must understand when we act as entrepreneurs and when we come together as one unit.

No one knows exactly what rules should be established in each specific system. Sometimes they need to be introduced in the most unexpected places, while at other times, it’s important to give employees the freedom to be entrepreneurial.

Let me give you a concrete example: we struggle with scripts. I believe they are pointless in our company. Every person knows how to communicate with clients based on their own instincts.

We had managers who supported the use of scripts, but I proposed allowing everyone to decide how to interact with people. We won’t check what someone said or didn’t say. We respect each employee and let them build their relationships with clients independently. Sometimes this situation can get absurd, but freedom and respect are more important than isolated incidents.

At times, the scripts were ridiculous and everyone got tired of them. It’s important to understand this. We gathered together, and there was quite an uproar. I delivered a passionate speech for almost two hours. I always do this when I need to prove a point. I draw graphs and analyze mathematical systems. I’m convinced that if I can’t prove something, then it shouldn’t exist – it’s wrong. Having a solid evidence base is very important to me. I always strive to sell my idea to the team. Only when the team accepts it does it become a protective tool for the system. If everything is done autocratically, it won't be accepted. You can’t achieve anything through force in business; only acceptance works. The leadership’s task is to invest resources in gaining that acceptance. I use social media to broadcast my philosophy to a wider audience. People subconsciously pick up on this: what approach, what philosophy, what a person does and why. I write long letters to all directors on Sundays, explaining the reasons behind my decisions.

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