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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!

Rudyard Kipling, In the Neolithic Age

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.GrantTreeBuffer, 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:

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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

Why we should lean into risk in Brexit Britain

May 10, 2016

I was going to write a blog about risk. I’d whip through the theory, focus on the practice, and back it up with science.

Then the referendum happened. And now, depending on your view, the country’s either deep in the mire, or free to succeed. The markets have crashed, but might bounce back. Hate crime is up, but might be a blip. We’re living in uncertainty, and we don’t even know how long it’ll last.

All of that feels uncomfortable and risky. So to write about risk without acknowledging the uncertainty around us feels a bit absurd. We’re already awash with political analysis, so I won’t add mine. But whether you’re delighted, devastated or unmoved by these events, it’s an interesting moment to take a look at the parallels with organisational and personal change.

Major change throws the status quo in the air. Before it settles, as it inevitably will, we can make some choices. We can pretend it’s not happening. We can choose to step back and see where the pieces fall. And we can choose to take a risk and lean into uncertainty. These are decisions organisations are making now – as they’ve done before and will again. Individuals are doing the same.

Unless you’re very lucky, pretending nothing’s changed will leave you baffled, and your colleagues disengaged. It’s also, counter-intuitively, a lot of effort. Our ability to adapt is part of what defines us as human. So while adapting might be hard, refusing to is exhausting. Sometimes, of course, the wisest move is to hold your horses and wait for a new normal. But you forfeit the chance to shape it, and risk being left behind.

Choosing to shake hands with uncertainty can be complicated and uncomfortable. It can also be profoundly creative. If you can lean into that, there’s scope to experiment with new ideas and products, have different conversations and make unexpected connections. You might fail, you might succeed, you might create something a bit… ‘meh’. But you only find out if you take the risk. And whether or not it’s sparked by external events, embedding a culture of testing, adapting and improving will reap benefits well into the future.

Thing is, it’s not easy. There’s a gap between intention and doing. And however much you want to, crossing it can seem boring, painful and hard work. And once you do cross it, there’s no guarantee it’ll work. Ugh. Why bother? It’s somehow easier to feel disrespected afterwards than to challenge in the moment. To feed back to your friends instead of your colleagues. To work within stasis than to venture an alternative.

But that ‘ugh’ is worth the bother. It’s when things shift, and when you learn. Plus you reinforce in yourself and colleagues that, whatever the outcome, you are people with the agency to create change. You’ll be more likely to do it again, helping build a culture of creativity in yourself and others.

So where to begin? Here are three initial suggestions.

1. Acknowledge fears, but don’t draw them out. Give yourself three minutes to project the potential range of outcomes from best to worst. Then begin, ditch or adapt. You’ll only find out what actually happens by taking the risk, so don’t waste time on the fundamentally unsound, or delay the great.

2. Solicit feedback; ask, listen, learn, adapt. And be specific: work out exactly what you want feedback on, and ask questions within a clear remit. This shifts the focus away from egos (easily crushed, despite denials) and towards ideas. Seeking feedback can feel like a massive risk in itself. But the more you do it, the easier and more useful it becomes.

3. Build networks. It’s exhausting taking a risk on your own and it takes ages. Talk to people who disagree: diverse opinion makes for robust ideas. And test the idea as soon as you can, drawing on your network for support. Make sure your network includes people unconnected to your idea, but who can help you reflect on progress and remain resilient. Action learning sets and peer mentors are ideal.

I’m not suggesting all ideas are sensible or risks worth taking. But change is definitely coming. New systems, new products and even new industries may emerge. I hope that as organisations and individuals we’ll be inspired to lean into risk when we encounter it. Start experimenting, adapting, innovating. The status quo has been shaken, and will rebuild. The space in between is yours to shape.

By: Kamala Katbamna from Chirp

http://www.chirp.org.uk/new-blog/2016/6/29/risk-taking-in-a-post-brexit-britain

Scrum Gathering Orlando Through The Eyes Of A Live Illustrator

May 17, 2016

Equipped with my graphic board, pens, sunglasses and shorts I set sail for the Scrum Gathering in Orlando. Having attended two awesome gatherings in the past, the bar was set high – however, I was far from disappointed.

From the offset, co-chairs Anu Smalley and Kate Megaw knocked it out of the park by entering the stage to the sound of ‘Starman’ by David Bowie, whilst wearing convincing spacesuits complete with helmets. This was their genius way of setting the Gathering’s theme ‘Infinity and Beyond: Transforming the World of Work’. With three tracks on offer, ranging from beginner (‘Mission Control’), intermediate (‘Orbiting the Earth’), to advanced levels (‘Agile Galaxy’), there were more than enough sessions to choose from for all 1100 attendees. Let’s not forget that this was the largest Scrum Gathering so far.

Although each session had a unique offering, there was an obvious key topic that resonated from all talks. During the CST/CEC retreat ‘Agile Leadership’ was introduced as a pressing subject, with one attendee keen to highlight the distinction between ‘Leaders’ and ‘Managers’. Brian Rabon reminded everyone that ‘Agile starts with Leadership’ during his opening keynote. A panellist on the PWC keynote pinpointed that any organisation would struggle without ‘Agile Leadership’, and Steve Denning went on to inform the audience during his ‘Agile Leadership’ talk that the key driver for ‘Agile Leadership’ is having a different mindset.

Leon Sabarsky identified during his ‘Extreme Scrum Hiring’ talk that an obvious flaw when interviewing individuals for team roles is to interview them on their own. His key takeaway was to move away from ‘One-on-One’ interviews by considering ‘Scrum Team group interviews’. This approach enables individuals to be assessed based on their engagement within the group, and demonstrate the qualities required for being an effective team player. It all comes down to good collaboration and communication, folks.

Leon noted that:

“the number one criterion that Scrum team members ought to be measured against is their Collaboration skill. It’s relatively easy to teach people a domain area, Agile methods and a specific technology. However, I can’t teach someone to collaborate well. They either have it or they don’t. If they don’t, they will reduce team effectiveness and cohesion over time.”

Another talk with an interesting twist was ‘Scrum Team CRM: Aviation Crew Resource Management Techniques for Scrum Teams’ by Thomas Friend. Using the narrative of flying aircraft, Thomas made strong comparisons between ‘Aviation’ and ‘Scrum’. Once again, the underlying message here was good communication.

During the Gathering another inspiring movement was unfolding. A group of passionate Agile Educators met face-to-face to carve out a manifesto for Agile that is authentic to Education. With a variety of case studies demonstrating how Agile values and principles have been adopted within an educational setting showing proven success, this group of innovative leaders were making a difference. They set out to define a vision and values for what resulted in the ‘Agile in Education Compass’, an inspiring model for how education can respond to the modern world with agility.

Once again, I had the opportunity to take to the pen and draw key insights from beginning to end. The canvasses enticed the crowds, and people soon took to Twitter to share the learning and store the visuals as a reminder of the Gathering.

Alongside this, on the final day, I couldn’t resist suggesting an Open Space topic around the use of ‘Graphic Templates’ which can assist coaches and facilitators in communicating with pictures. The session was a great success and those that attended were satisfied with their newly gained visual skills.

“Visuals speak volumes, this workshop encouraged me to draw and take these skills back to my team.” – Lynda Menge (workshop attendee)

Whether you wish to enhance your facilitation skills, make collaborative design thinking a key enabler within your team, or simply gain the confidence you need to draw live in front of an audience, join me for a one-day ‘Innovation through Visualisation’ workshop in London on the 1st of June or Atlanta on the 24th of July.

My final point on what drives so many people to attend the gatherings: passion and the desire to collaborate and share ideas. People attend these fantastic events for the discussions and seeds of information that are shared over breakfast, and last well into the evening over a cold beer, the networks that grow, and the desire to continue to collaborate way beyond the event.

I look forward to sharing some ideas with you at the next Scrum Gathering.

By: Stuart Young from Radtac

http://www2.radtac.co.uk/blog/scrum-gathering-orlando-through-the-eyes-of-a-live-illustrator/