The Issue: Workers as Crisis Consultants

When a sudden drop in demand forced electronic-signature service DocuSign to mull a strategy shift, senior management tapped the wisdom of its staff

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Only a few months into his new job as chief executive officer of Seattle-based DocuSign, a Web-based service for secure digital signatures, Matthew Schiltz saw two of the company's primary markets unravel.

It was mid-2007, and already mortgage brokers were bringing in fewer new contracts requiring digital transactions because of fears induced by the unfolding subprime debt crisis (BusinessWeek.com, 12/13/07). Around the same time, the College Cost Reduction & Access Act was passed into law, which constrained the budgets of, or closed down, many student lenders—also major customers of DocuSign. "We were faced with large market shifts in two of our top segments, both out of our control, and both within a 60-day period," recounts Schiltz.

Facing a potential crisis, Schiltz and his senior managers ignored the temptation to keep quiet and try to solve the problem behind closed doors. Instead they invited everyone in the company—some 40 employees—to a town hall meeting, where they laid bare the sobering implications of these new market conditions and asked for direct involvement in adjusting the company's strategy. "We went straight to the people that deal with these customers on a daily basis, and that's our employees," Schiltz explains.

Empowering the People

DocuSign engaged its employees in decision-making in two ways. First, Schiltz instituted monthly, company-wide meetings where workers in different business units share what they have observed about market shifts and come up with new ways to execute and measure the impact of changes. Second, he created subcommittees—groups of employees who meet to brainstorm solutions in specific areas, such as new products.

Less than a year after creating these new channels of employee feedback, the company has experienced what Schiltz calls "dramatic positive change"—both in its performance and the culture of its workforce. In marketing efforts it began to emphasize the environmental impact of the huge amounts of paper its clients save each year by using digital transactions. By signing big new clients such as Wells Fargo Funding (WFC) and Expedia (EXPE), DocuSign made up for the slowdown in mortgage and student lending segments while proving that a variety of industries, such as loan origination and travel booking, can benefit from its product. And it secured a $12.5 million Series C round of venture capital funding that will help the company grow in those new areas.

Now that they have started to take an active role in company strategy, Schiltz says employees are more invested in their everyday work. "You empower these people by telling them the truth and being open and honest with them," he says.

But knowing that it's important to place limits on the voice of lower-level staff in company decisions, Schiltz and his managers have tried to maintain an air of authority. "We don't always want to get into a situation where our employees think that our senior management team doesn't have any input or doesn't have any opinions," he says. "There's a balance there."

Douglas MacMillan is a staff writer for BusinessWeek.com in New York.