Reinventing Business
Discovering Your Best Organizational Structure

Monday, April 6, 2015

Holacracy vs. Teal

(I've been rather absent from here lately, working on the now-complete Second Edition of Atomic Scala. However, more programming-oriented projects are in the queue so posts here might be spotty).

Here's a nice article on Holacracy. When I took the training a couple of years ago, I found it extremely useful and inspiring, more than worth the costs. But, as often happens in my explorations (especially company visits), something started bothering me over time and I couldn't put my finger on it until now.

As the article points out, people who don't understand it expect Holacracy -- because it's a form of self-management -- to be a free-for-all, and it's quite the opposite. Holacracy is a process for you to build your own structure, customized for your company (rather than rubber-stamping the same hierarchy used by every organization from the industrial age). So, quite the opposite of having no rules, Holacracy is the way that you create your rules.

That's where it bothers me. Even though there's a lot of emphasis in Holacracy on not adding rules you don't need. It's probably because of my experiences with Open Spaces, where we create just enough structure to produce interaction, and no more.

That's not to say Holacracy can't achieve this, but my gut feeling is that there are some reactionary parts of it, trying to prove that it's a real, grown-up thing. In fact, part of the Holacracy contract is about protecting Holacracy, agreeing that you will either do everything in the Holacracy practices, or "officially" back out of it and stop saying you're doing Holacracy (because people like to pick and choose practices).

While I understand the motivations, I don't care about them. It doesn't serve my goal of creating an amazing organization. Let me be clear, I think Holacracy is a huge step forward and makes important inroads, and may in fact be just what an existing organization needs to transition into a much better organization. Indeed, Holacracy might just be about that transition.

But it doesn't go far enough for me. I think the brain in my gut is telling me that, while I would much rather work at a Holacractic organization than an industrial-age organization, I ultimately wouldn't be happy there. Although it minimizes the rules, Holacracy is ultimately still about how to create rules, and I guess I just don't like rules -- if we must have them, they need to be only a few, that you can keep in your head and use to guide yourself (like Netflix's "freedom and responsibility"). Or the rules below.

I've had a fundamental-shift experience in recent months: reading Reinventing Organizations by Frederic Laloux. I will read it again, and I found myself stretching it out because, after years of looking at how to "fix" existing organizational structures, it was such a relief.

Laloux looks at the history of organizational development in evolutionary terms, considering the environment and what kinds of structures it supported. He classifies these structures by color, and each step forward produces an organization that is able to become larger and accomplish more. He foresees the next evolutionary step as the "Teal" organization, of which he gives a number of examples of existing, thriving companies (including HolacracyOne, LLC, the company that created and promotes Holacracy).

Here are the three foundations of the Teal organization (lifted from this review):

  1. Self-management:  To operate effectively based on a system of peer relationships, without the need for either hierarchy or consensus.
  2. Wholeness:  People no longer have to show only their “professional” self, or hide doubts and vulnerability.  Instead, a culture invites everyone to bring all of who we are at work.
  3. Evolutionary purpose:  Instead of trying to predict and control the future, the organization has a life and a sense of direction of its own.  Everyone is invited to listen in and understand what the organization wants to become, what purpose it wants to serve.
Here's a huge difference between Holacracy and Teal. In Holacracy, you figure out roles and responsibilities -- who is able/responsible to make what decisions. But in Teal, anyone in the organization can make any decision (including one that costs the company money), as long as they use the "advice process": you must talk to people who know more about the issue than you, and you must talk to people whom the decision will affect. You can still make the decision even if both groups recommend it (so the company can be very experimental), but one of the few fireable offenses in a Teal organization is not following the advice process. This ability for anyone to make a decision shows just how different Teal is. It's the very thing that I've seen work so well at the Open Spaces conferences that I hold.

I recently attended a week-long Esalen workshop led by the creators of Cafe Gratitude, where the emphasis was on point 2, wholeness. Although Cafe Gratitude is not a Teal organization (there is a management hierarchy), the focus on wholeness has made it a special place for both employees and customers; I suspect its success is precisely because of this emphasis. They use a practice called "clearing" (nothing to do with Scientology) that each employee experiences at the start of their shift -- you pair with another person and clear each other. They wanted an app, so during the Winter Tech Forum I worked with another attendee and built it; it's here and runs on all devices. The app walks you through the clearing process.

Holacracy is great, and I will visit Zappos again to see how the largest (so far) Holacracy experiment is progressing. Holacracy has a place in the world, but Teal feels like my color.

Monday, March 16, 2015

Do What You Love

An old but very insightful article by Paul Graham describing one process for discovering your best life path. Also see Start With Why and What Should I Do With My Life?

Hiring: Steps in the Right Direction

This is a nice post that describes how incompetent our hiring approaches are. In particular, interviews are a terrible way to find employees, because they basically test how well a candidate interviews and not much else. The article describes some better approaches to the problem. One of my favorite observations is that if a candidate doesn't understand a technology, buy them a couple of books and give them a couple of weeks to get up to speed.

I envision a completely different way to discover whether someone is a fit, that all but the most primitive companies will eventually use. The open-spaces conferences I hold have turned out to be fertile hiring ground, for example. You get to see a candidate in various creative situations, with the added bonus that they don't even know they're being interviewed.

Monday, March 2, 2015

Abusing Unlimited Vacation

Unlimited vacation time has become quite the rage among companies. What's happened? Have industrial-age companies suddenly seen the light and realized the benefits of treating employees really well? As you might guess, the answer is no.

It turns out that social pressures around job security outweigh the desire and need to recover from work. Across the board, when companies adopt an unlimited vacation policy, employees take LESS time off. Human resources gets a win while looking like heroes for such a liberal policy!

But it gets better. If vacation time isn't fixed, it basically doesn't exist. It's not an accounting liability on the books. Best of all, if you quit, the company doesn't have to pay you for accrued vacation! Now companies are adopting unlimited sick time, presumably to add to the benefits of unlimited vacation.

Here's a great story about the failure of a well-intentioned unlimited vacation policy (along with numerous other problems with vacation systems, and links to other articles -- especially see Jacob Kaplan-Moss' analysis), and how they fixed it: by adding in a minimum required amount of yearly vacation (I can just feel the MBAs and HR folk squirming when they read that).

Tuesday, February 10, 2015

Money is an Abstraction of Time

My friend Nancy sent me this in an email, and allowed me to post it here:
Money is basically an abstraction of time.  Time is real (to our physical, corporeal selves), money is imaginary.  Sort of a 'willing suspension of disbelief' construct that makes the material side of modern life function.  But at a certain point, money, like Newtonian physics, breaks down.  Because everyone knows that on a personal level, time is a relentless pursuer.  Material stuff is evanescent. Remember back when Adobe put all of the engineers' names on the splash screen of a project?  The business psychology of that was that ownership was important to creators.  But really, underlying that idea is something that looks like a straight across trade: time for time.  Chris told me recently that there is a saying that you don't die until after the last time your name is spoken. Offering a creative person money in exchange for being buried alive in a cubicle isn't any kind of trade.  It's more like indentured servitude.  Pile a bunch of non-disclosure/non-compete agreements onto that and it looks more like slavery...
I also see money as a social agreement. It is a way to transport value, to trade the value I produce for the value you produce. For this reason I find the ways that bankers and stock market traders come up with to steal this value particularly reprehensible; it only takes value out of the system without adding anything (caveat: not everything bankers and stock traders do falls under the "stealing" category, of course; many of them provide real value).

Wednesday, January 28, 2015

Slide-Deck Summary of "Reinventing Organizations"

Here's a very nice overview of the ideas from Frederic Laloux's Reinventing Organizations. I'm about one third of the way through the book and am savoring it. It's been rewiring my brain, and now it's even harder to watch traditional industrial-age organizations in action.

Sunday, January 4, 2015

Reinventing Organizations

Frederic Laloux has developed a new perspective on the possibilities of organizations. For me, the Holacracy training was a great step forward; I learned a huge amount and it changed my perspective dramatically on many issues. But this feels like a whole new level.

You can start with the rather long lecture (totally worth the time) and if you like that, he has a book (which I'm starting now). Here's an interview that adds more insights.

Some interesting points from the lecture:
  1. You need structure, but you don't need a boss
  2. Hierarchies can only manage low-complexity systems
  3. The "vision, strategy, execution" approach assumes that the organization is an inanimate object.
  4. Don't "lead." Discover where the organization wants to go.
The "advice process": anyone in the company can make a decision, including one which spends money, if they first:
  1. Seek advice from people who have expertise
  2. Seek advice from people who will be impacted by the decision
Other fascinating techniques (I'm thinking/hoping there are many more in the book):
  • During meetings, if someone is speaking to further themselves, you ring a bell. While it is resonating, everyone is quiet and contemplates "who am I serving?"
  • A high school with an open-microphone assembly where the only rule is that you are either thanking someone or paying a complement.
My general feel is that the crux of this way of thinking is in changing from directing behavior via a command-and-control approach to one which uses the individual's desire to be part of a community so that the individual self-regulates.

His web site is primarily around the book, but also has other resources.

This feels like something I will be pursuing in one way or another.

Tuesday, November 18, 2014

Heterarchy and Adhocracy

Heterarchy and adhocracy are two terms I came across when searching for hackerspaces while in Scotland.

Loss Aversion

When I was a kid, I remember being willing to jump into something without worrying about how it might come out.

Until you know things will turn out OK, there's always the potential that you could run into a problem that makes the whole effort a waste of time. In cognitive science, the bias against any kind of loss is referred to as "loss aversion."

"Loss" is a future-oriented idea. When we are kids we're much more in the present, thus willing to try something without requiring success. We're natural experimenters. But as we grow older we are taught not to "waste time" by doing activities that don't have guaranteed results.

I wonder how much of my life has been bound up by performing cost-benefit analyses on every possible option. This process, spun up decades ago, requires some certainty of outcome before allowing any kind of action.

Anything that amplifies loss aversion increases the gridlock.

No wonder the Buddha emphasized "detachment from outcome."

Tuesday, November 4, 2014

How Diversity Works

In Neal Ford's opening keynote for Geecon in Prague, he includes "diversity" as one of the things we are doing badly and not really paying attention to. Neal was specifically talking about women in programming, and he commented that "there's no down side" to diversity.

I'll argue that there is a "down side" which makes people resist diversity, and is also the very thing that makes diversity essential. It's this: when we're all the same, we all agree with each other easily and most of the time, and that's ... easy. When you introduce diversity: women and people from different cultures (including cultures nested within your own), you introduce the discomfort of disagreement, and that's precisely the point.

A design created by people that think the same way will be the same, and while it might sell to other people like those who created it, it won't address the needs and interests of people outside that group. More importantly, it just won't be as creative.

In the industrial age, design took a back seat to "following orders." Bad designs got pushed through to mass production. Consumers had far less choice; products could be forced into the marketplace. Information about products -- such as reviews -- could be "managed."

In the information age, the tables are turned. Consumers are just beginning to learn what level of choice they have, and new companies are just beginning to learn how to discover and provide what consumers want (this is the actual meaning of the word "marketing," which unfortunately has come to mean just "selling"). Older companies are struggling because, I believe, their structures are not designed for innovation.

It's not as simple as just introducing diversity. Diversity is a necessary but not sufficient condition for innovation in the information age.

There's an interesting elephant in the room when it comes to diversity, one which I think diversity advocates have avoided because they're just happy to be part of the discussion. If diversity introduces (important) disagreement, how much diversity can you stand? How much disagreement is beneficial, before you cross a line and it becomes divisive? An organization with a lot of chemists and physicists, for example, will probably benefit greatly by introducing some biologists and sociologists, but will it help to bring in non-scientists, specifically people who believe without evidence? The answer probably depends heavily on context (what products are you making?).

Another important aspect is communication tools. When we were non-diverse, we agreed more easily and communication could be local-cultural. With diversity, we need to focus more on ways to communicate across bigger cultural divides.