Company culture: an open and shut model

May 20, 2016 by lsmit@wemanity.com in Blog

There are nine and sixty ways of constructing tribal lays,
And every single one of them is right!

How many ways can you categorise the ways that different startups organise themselves, the different flavours and colours of organisational culture adopted by companies through their life (and death). Far more than nine and sixty, I assure you. And, yes, each of them is right. Models of the world are usually helpful in making sense of the continuous chaos of reality.

I’d like to propose a very simple and useful model for startup (and, more widely, company) cultures, that I feel is relevant at this point in history: open and closed.

hierarchical-pyramid

Closed cultures

There are a number of ways to run a closed culture, but the presence of any of the following features is usually a clear sign of an at least partially closed culture:

– Secrecy by default: Business information is closed by default, on a need-to-know basis. Typically, only the senior management team has access to all the information (e.g. salaries and bonuses, detailed financials of the organisation, etc). These multi-layered secrets often form part and parcel of the power structure: the higher you are, the more information you have access to.

– Top-down, hierarchical management: This can be implemented with varying degrees of flexibility, but the common element is the idea that you have a boss and you should do what they tell you. All closed cultures enable some elements of push-back from those savvy enough to know how to make their points from below, but the general mode of functioning is from the top to the bottom.

– The Pyramid/Career Ladder: Closed organisations are without fail mapped out as pyramid-shaped: there is one CEO at the top, with a senior executive team below, and progressively wider layers as you go down. This Pyramid also provides the Career Ladder – the ever-receding MacGuffin that motivates people to work hard so they can one day get on top of the Pyramid and finally achieve true Success.

– Focus on profit: The more advanced closed organisations tend to focus on profit above all. This is measured as a number and is the primary driver of decision-making. If an action results in more profit, it’s worth doing. If the company makes more profit, it is more successful. Profit is the essential driver of all decisions. “How will it affect the bottom line?” is the main (or perhaps even only) question being asked.

– Motivational measurements and individual incentives: Closed organisations, as they mature, learn to apply measurements as a method of ensuring performance. They will measure everything that can be measure and make up targets and projections (with varying degrees of involvement from those being measured), then hold people accountable to those estimates. Those who meet their targets are rewarded, and those who fail are punished.

– Fixed roles and masks: In closed cultures, you are hired for a specific role. You can progress towards more managerial responsibilities through promotion, but typically, doing things outside of your role is discouraged (if only because it will step on the toes of the person who currently owns that role). In closed organisations you are your role. It’s no surprise, then, that most people put on a mask to go to work: while they are at the office, they are no longer a full person with a variety of wants and activities and aspirations, but a “Web Developer” or a “Marketing Manager”. Professional behaviour is all that’s accepted, and it’s all that’s given.

– Distrust and control: A fundamental assumption of closed cultures is that people are lazy and cannot be trusted, so they need to be controlled, otherwise they will not do any work. This gives even more justification to adding more measurements and narrowly defining roles and performance criteria. When they don’t treat them like mindless cogs in a machine, closed cultures tend to treat employees like irresponsible children.

There are countless examples of closed cultures: most of the companies and organisations in the world are run on the closed model. In fact, in many countries it is illegal to run a public company in an open way . You’ve most likely worked for a closed company at some point in your life. In fact, chances are you’re working in one right now.

Whilst closed cultures (which form the majority of business cultures today) are clearly capable of delivering great results, they have a number of deadly flaws, which I’ll cover in more detail in a later article. For now, let’s look at open cultures.

Open cultures

If there are many ways to run a closed culture, there are even more ways to run an open one. Each open company tends to have its own way of expressing its culture. However, these are some typical commonalities by which to recognise an open culture:

– Transparency by default: In open cultures, business information is publicly available to all employees. This includes salaries, but also bad news, strategic plans, problems, decisions, ideas, etc. People are trusted to be able to handle that information.

– Flat hierarchy and/or self-management: If everyone knows everything and you’ve hired smart people in the right kinds of jobs, it is very difficult to maintain an arbitrary hierarchy, since everyone can contribute to any decision. When you trust people, it is also unnecessary to set up managers whose job it is to check after them.

– Personal development through work: When there is no career ladder, how do people achieve career progression? The obvious solution is that they take on more responsibilities without having to go “up” an arbitrary ladder. As a natural consequence of that, it is possible for people to fully express themselves in their work, by getting involved in their full range of interests, so they can achieve more personal development than they would in a narrow role with a career ladder.

– Multiple stakeholders, values, and purpose: In open organisations, the idea of valuing profit above all others becomes obviously absurd. It’s not only shareholders, but also employees, suppliers, customers, society, and the environment, which matter. The company does not exist in a vacuum. Values become a way to express what the company cares about, rather just a motivational slogan. Along with the higher purpose of the company, they become the way that decisions get made in open cultures.

– Team or company incentives: There is a progression from the closed culture approach of individual incentives, via team incentives, towards the eventual ideal, which is a system where base pay is determined by a combination of what the person is contributing, what the person needs, and what the company can afford, along with company-wide bonuses. Individual incentives are shunned.

– Self-determined pay: One of the surefire signs of an open culture is when people determine their own pay. In most companies, this is unthinkable. In open cultures, it becomes a natural consequence of all the other stuff. After all, if you trust people to make all sorts of important decisions about the company, why not trust them to make this decision too?

– Separation of role and person: The idea that a person and their role are intrinsically bound becomes visibly stupid as the culture opens up. Eventually, it is clear that people are not their roles, but are capable of engaging in several roles simultaneously, contributing more fully to the organisation’s needs. This further enables people to accomplish themselves and to be fully themselves at work instead of wearing masks. One of the ways this is accomplished is through Open Allocation.

– Trust: Perhaps most important is the fact that open cultures treat employees like adults, trusting them to do the right thing even in complex or ambiguous situations. There are of course processes to help people make better decisions, but the key point is that all these processes start from a perspective of trust and responsibility.

The benefits of running companies this way ought to be obvious, but in case they need to be spelled out:

– People in open cultures are more engaged, happier, more creative, they contribute more, etc. This makes them much more fun to work in, both as a founder and as an employee, but also much more productive – people work much more effectively when they care.

– Having a better environment makes it easier to hire great people.

– Open cultures are way more adaptable to change. Change management is an oxymoron in an open culture: change happens constantly and continually, not through expensive, long-winded, and often failure-prone change processes.

– Because they motivate people so much better, open cultures are, ironically, also better at achieving sustainable, long-term financial results.

There are some examples of open cultures out there, too, to varying degrees.GrantTree, Buffer, Valve and Github, in the startup space, are known examples of open cultures. Others include Semco, Burtzorg, Happy Startup, MorningStar, and many others in all sorts of different contexts and sizes. All companies could adopt an open culture, but most don’t. Why is that?

Reinventing Organisations, by Frederic Laloux, studies a dozen or so open cultures and comes to the conclusion that two things are absolutely prerequisite for an open culture to exist for any length of time: both the CEO/Leader and the owners must be fully supportive of this (currently) unconventional way of operating. Otherwise, eventually the company hits a hard time, and either the CEO or the owners pressure it into returning to a more traditional (i.e. closed) mode of functioning. So the obvious reason why more companies are not currently open is because most CEOs are not prepared to let go of their control mindset, and when they are, the owners (whether private owners or VCs with board seats and a traditional, closed mindset, or simply public markets) frequently won’t let them.

If you’re a founder of a startup, this poses an interesting challenge: are you up to the challenge of creating an open culture in your business? Even when that involves giving up the trappings of power? Even when that involves passing on an investment round from an investor whom you know will force the company to change its ways when it hits a rough patch?

If so, welcome to the club. Follow this blog, and I’ll do my best to share what I’ve learned in transforming GrantTree to be an open company. This is still a new field so we can all learn from each other.

By: Daniel Tenner from GrantTree

Company culture: an open and shut model

Self selection – How to restructure your team for greater autonomy.

May 16, 2016

One of our largest departments within Ocado Technology recently undertook a revolutionary self-selecting restructuring exercise, changing the entire structure of the department whilst allowing all team members to choose which team they would like to work in going forward. The need came about because multiple teams were stretched, working across two major business propositions and context switching between them. The goal was that following the restructure there would be a clear split between teams working on two different business propositions, such that each of those teams could really focus on that product.

ukteamsanonymous-

The overall aim of this restructure was to achieve greater alignment, autonomy and purpose.

Following the principle that a collaborative and distributed approach is often the best way to solve a complex optimisation problem, we decided to take a full day as a whole department to stop work and have a facilitated event to negotiate the moves amongst the five new teams. We did a lot of thinking and preparation prior to this day and the teams used a set of constraints around team size and experience levels to guide their decisions.

The plan going into the event was shared well ahead of time to allow people to get their questions in (and added to a shared FAQ forum) and to be sure the concepts were clear going into the day. Alongside this, we ran multiple “townhall” sessions where people could air their concerns and ask their questions openly. We hoped that at the end of the process we would have well-rounded, committed teams ready to face the new challenge.

There was a certain amount of ad-libbing and practical adjustments on the day, but on the whole it unfolded according to the plan:

– First, a pitch for each team by the Product Owner, covering the vision/roadmap and why the team is super cool and awesome. There was also a set of target criteria for each team as a guide for what we were looking to achieve in each area.

– Next, multiple iterations where we:

1. Assigned or moved ourselves/each other between teams until we’ve addressed any identified issues in the previous iteration.

2. See if we had met the pre-defined criteria for each team.

3. Repeat until we run out of time or we meet all of the requirements and everybody is happy and committed to the team that they are in.

Fuelled by 18 pizzas, we completed three exhausting rounds of moves and peer voting. At the end of each round, we (everyone, including Product Owners and Team Leads) voted on the viability of each team. From this we measured two scores: an intra-team score (the people in that team scoring the viability of the team), and an inter-team score (the rest of the people scoring the viability of that team). This lead to a few interesting dynamics, for example one of the teams gave themselves a high intra-team score, but scored low on the inter-team vote. They then gave a pitch justifying their viability as a team, and were able to dramatically increase their inter-team score in the next round.

The first round was deliberately obviously suboptimal, so that everyone was motivated to suggest changes and improvements and become comfortable with doing so in a very “safe” way. Naturally, this configuration had dramatically lower scores! This encouraged a large amount of movement in the following rounds, as we had hoped.

votingresultsanonymous

Essential to finding a viable solution was an appreciation from all of the ‘greater good’ of Ocado Technology. On the day, some people chose to make some really big compromises in order to serve the greater good and allow us to form balanced teams that are all capable of smashing out quality software.

After the final round of voting we then took a quick anonymous happiness reading by each dropping a green, yellow or red lego piece into a box. Although they were not perfect, we were extremely pleased the results, considering that our original goals was “at least 50% happy”.

Screen Shot 2016-08-16 at 1.23.46 AM

The very next morning we did a big-bang desk move:

image-resizer

We’ve since kept a close eye on the impact of the shuffle-up by measuring the things that matter most to us: throughput and team happiness. There was an expected initial dip in throughput as many people got up to speed on new products they had not worked on before and as new teams gelled and got to know each other. But the throughput three months on has risen higher than before the change and still rising. Improvements in team happiness (measured before and after by Spotify’s “health-checks”) were noteworthy from straight after the restructure.

In terms of the solution itself: we are delighted. Every team has a reasonable level of experience whilst a healthy number of people have chosen to change domain. It is a vastly better result than we could have hoped for had we chosen a top-down approach and the sense of autonomy it has created is invaluable. It seems that teams and individuals have a stronger sense of ownership than ever before and that they are taking quality more seriously than ever before. This did have an up-front cost in terms of short term throughput, but the long term benefits certainly justify it.

James Lohr, Ocado Tech Department Head

Free the office slaves

Mar 29, 2016

Free the office slaves: No more working day.

The 9-5 working day has come to signify office slavery.

In actual fact though, most knowledge workers work longer than 8 hours a day. A 2011 survey (ASHE) suggests that the average manager in the UK works over 9 hours per day, while extreme hours among certain groups (bankers and lawyers in particular) regularly involved sustained periods of working up to 120 hours a week.

What do set working hours signify?

Extreme hours hurt us. A study by Alexandra Michael, published in 2012, followed investment bankers over a 9 year period. The report concluded that people suffered physical, mental and emotional problems, including depression, a greater number of sick days and relationship breakdown.

Even normal hours often hurt us though. Studies suggest that those in the office spend a large proportion of their time unproductively. They might be checking personal emails or social media sites, or simply carrying out their basic work in a very un-productive fashion. Anyone spent ages staring at a spreadsheet unable to make head or tail of it? Ever fallen asleep in a meeting when supposed to be coming up with ground-breaking new ideas?

The energy cycle

Energy, creativity and brilliance rarely arrive on demand. Instead, human beings work in cycles. We can focus for limited amounts of time. After that we need rest in order to recover.

ultradian

The ‘ultradian’ pattern, as it is known, normally depends on working in cycles of 90 minutes, with energy troughs in between – normally of about 20-30 minutes. The working day takes no notice of this, however.

Sometimes of course, we enter that wonderful state that Mihaly Csikszentmihalyi referred to as ‘flow’ – where we are hardly aware of the passing of time because we are so absorbed by what we are doing. When we manage to achieve this, the idea of cutting it off with a commute home or a lunch hour seems crazy.

Manage energy, not time

Radical companies understand the need to manage energy, not time. Sometimes that means that workers can work far in excess of the normal working day – developer stories of being so absorbed in a problem they didn’t leave the office until 3am are common. At other times it means workers do far less than the traditional 8 hours and in a different way – starting late, for example, leaving early to pick up children; taking a walk.

No working day means that life and work are more closely blended. It’s not unusual for radical managers to answer emails late at night or to come up with ideas as they sit on a beach with their family. They are not oppressed by this (“oh no! the phone is beeping again!”), partly because they are just as capable of taking a nap when they feel like it or running errands in the middle of what others would call the ‘working day’.

Being Radical

Leo Widrich is a co-founder of Buffer, a company which allows people to manage multiple social media accounts more easily. He manages his own day by splitting it into 90-minute windows and then achieving a certain number of tasks – one per window. A side benefit is that this helps increase focus on just one task at a time, eliminating much of the cost of task-switching. He then tries to plan his rest periods. Instead of allowing these to be filled up with emails or meetings, he goes out for a snack or reads a book. This ensures genuine downtime that allows the brain to recharge and creative ideas to swim up from the subconscious.

So what should we do?

It’s simple really – set people free to work as much as they want, when they want.

There’s no need to say ‘do you mind if I leave early today because blah blah blah’. Just go. It can help to share with others what you’re doing and how to get hold of you so they can co-ordinate with you, but there’s no need to ask permission.

Nor is there any need for that irritating parade of being the last to leave the office, or the first to get there. If someone is emailing late at night it’s because she had a thought and wanted to communicate it, not to demonstrate how dedicated she is.

Some managers might start sweating in light anxiety. How do you know the person won’t bunk off, won’t take advantage, won’t drop their productivity etc.? The answer is that regardless of hours put in people know if someone isn’t pulling their weight or isn’t performing. You can still ask poorly performing people to buck up or get out. But most people want to do well and want the company to do well so they work hard, but you’ve created an environment that helps them work effectively.

You can just trust them.

And just that one piece of advice – trust – frees up a lot of your own time in or out of the working day.

By: Helen Walton from Gamevy

Remote Work: Stories of People and Teams Doing Great Things

Apr 29, 2016

Get ready to pack up your laptop and hit the road!

Today, I specialise in facilitating remote work. And it was an experience ten years ago that turned a light bulb on for me — in a way I would have never expected.

I was living in California at the time and belonged to a social community interested in the future, technology, and staying healthy. Every Sunday, we’d meet up for a hike together. One member of the group was particularly interesting to me because he was working on a startup idea I’d never encountered before: he wanted to eradicate death.

To the outside world, it appeared that he was building an online project management tool. That was a very “normal” startup idea, even for ten years ago. But what most people didn’t know was that he was building the tool so that longevity scientists from all over the world could collaborate and solve the “problem” of aging.

He had found that the best people needed for this unusual collaboration were not living in the same place. So his vision was to build a tool that they could use to work together remotely.

It was a true “aha experience” for me. Once we remove the issue of being geographically dispersed, we can gather the best, most enthusiastic people together virtually to work on the most challenging problems imaginable.

I was hooked by the concept and started interviewing people and companies working remotely to see what they were doing. Down the rabbit hole I went!

In the past, we had to go to a specific geographic place in order to access the information we needed for our work. Now, that information is likely accessible from anywhere. And this gives us the opportunity to play with new ways of working and new business models.

I’m increasingly seeing a move from a model of work-life balance, which assumes that work and life shouldn’t overlap or blend, to work-life fusion, where the lines between work and life blur.

Work and Life: No Longer at Odds

Jeffry Hesse is an agile coach working with a distributed development team of approximately 40 people at a company called Sonatype. He loves his work. He also loves mountain climbing, photography, and spending time with his grandmother.

Because he can work from anywhere, Jeffry combines his passions by working while traveling. He started by trying an experiment with his remote team. He spent one month traveling in Argentina — and didn’t tell his colleagues he would be on the road.

He wanted to test how productive he could be while traveling, and if anyone on the team would notice.

Admittedly, it was hard. Finding a decent internet connection in Argentina was one of the most challenging aspects. He tried coworking spaces and staying with friends — and his technical know-how came in very handy while experimenting with various VOIP phones. But while it was hard work, and sometimes shaky, he managed to get his work done without the distributed team noticing that he was on the road.

While being a digital nomad may seem like a radically unconventional way of working compared to the traditional 9 to 5 job, it gives us a glimpse into what’s becoming possible…and increasingly common.

What Does It Mean Today to Be “Present”?

The tools that allow us to work in new ways are developing at breakneck speed. One of the most exciting examples of this is telepresence. Telepresence is a combination of technologies that give you presence somewhere other than your actual location. Your smartphone and standard video conferencing tools — even Facetime — can all be considered forms of telepresence.

My favorite form of telepresence? Robots.

The Revolve Robotics Kubi, for example, allows someone to call in (via video conferencing) to any tablet device. The difference is that you can move the tablet from side-to-side and up and down and control where you are looking from your own laptop.

For instance, if you are a remote participant at a meeting where everyone else is sitting together in a room, you can turn yourself to see who is talking. Other telepresence robots allow you to beam in to what is basically a tablet on wheels, and drive yourself around using the arrow keys of your keyboard. Schools use these for kids who can’t attend classes in person. Museums use these to give remote tours. Even doctors use them when specialists are scarce.

These interactive sensory experiences bring us closer to replicating what it’s like to be together in the same room. And the technology gets better and less expensive every year, opening new options all the time. Holograms are just around the corner!

How Businesses Are Changing

Because of these new technologies, more and more people are like Jeffry, seeking to balance their work with the freedom to pursue their passions. What it means to actually “be at work” is changing rapidly — businesses are evolving as well. Here are three examples:

A Virtual Network With Global Impact

Happy Melly is a social entrepreneurship network of individuals and small businesses dedicated to happiness at work. Supporters include coaches, creatives, authors, speakers, managers, and entrepreneurs. Members of Happy Melly help amplify and globalise great business ideas through virtual and in-person workshops, blogs, guides, books, tools, and videos.

I joined the network to get business advice from people who shared my same purpose and values. With the help of “colleagues” from all over the world, I learned how to structure and scale my company, Collaboration Superpowers, so that myWork Together Anywhere workshop could be offered online and in person around the globe. I’m also now the remote team manager for Happy Melly.

Serendipity Turned Them Into a Team

The team at StarterSquad first started working together (remotely) when a client hired them for a software development project. They didn’t know each other before the project started, but over time, the team clicked.

At one point, the client unexpectedly ran out of money — but the team members weren’t ready to part ways. They decided to find other clients so they could stay working together. They now operate as a self-organised team of entrepreneurs, specialising in building minimum viable products for software startups. In addition, they offer seed funding for startups whose ideas they believe in.

Forget About Facetime

Another company, Teamed.io, prides themselves on having no central office, no meetings, and no phone, Skype, or video calls. The company is made up of a large group of freelance software developers that have never met or spoken to each other. They work entirely through chat on task management systems.

Specific people are brought together for projects depending on the skillset that’s needed. Projects are broken down into very small tasks. Programmers are paid as they complete tasks, and they are not paid if the tasks are not completed. When the project is over, the team is dissolved and everyone moves on to other projects.

Extreme? Perhaps. But it does show ways of working that were never before possible.

Leveraging the Remote Advantage

There are numerous benefits to being able to work from anywhere. Some resonate most for solopreneurs and digital nomads as a source of empowerment to work and travel. Others please HR departments and hiring managers who need to build virtual teams or want to offer flexible benefits to their employees. A few are aiming to raise visibility around worker happiness and the environmental benefits of not commuting.

The ability to tap into information and collaborate with colleagues from anywhere has opened up new possibilities for work-life freedom. People can work on the things they are most passionate about, and businesses can hire people who love what they do versus people who are just doing their jobs.

If you haven’t thought about what’s possible with remote collaboration options in a while, you might be surprised by what’s happening — and what’s possible for you as well! I encourage you to do some more exploring. We’ve come a long way, and it’s only getting better from here.

By: Lisette Sutherland from Collaboration Superpowers