There’s been an interesting long-term study on graduates. Those who prioritized wealth and financial success in survey responses were significantly more likely to achieve it 20 years later. It seems almost intuitive, doesn’t it? Their choices, actions, and focus were likely geared toward accumulating wealth and maximizing financial gains.

This phenomenon isn’t confined to individual career paths. I’ve observed a similar pattern across organizations within our industry. It’s quite telling to look at the trajectory of companies over a decade or more.

Some organizations have had a laser focus on growth, and subsequently, they’ve experienced remarkable expansion. Others have chased public recognition and local fame, their representatives becoming well-known figures in relevant communities. Still others have invested heavily in technological excellence, attracting top-tier engineers.

The intriguing part is this: often, you could predict these outcomes simply by understanding the priorities of the company’s leadership.

Why? Because leadership’s influence on an organization is immense. Their personal aspirations become the organization’s goals. Their decisions, consciously or subconsciously, are often optimized to serve their own individual objectives. It’s no surprise, then, that an organization’s achievements frequently mirror the priorities of its leadership – much like the undergraduates in the study.

This observation, by the way, also translates to the prevalent issue of short-term thinking in the corporate world. After all, the top leaders are typically manipulated to “increase value for their shareholders” with hefty rewards. But that’s a discussion for another time.

Acknowledging the above, here’s a valuable tip: before partnering with any company, try to understand what truly motivates its top leaders. Not what they say officially on their website or in the materials they send you.

Find who’s on the very top of the organization and do a little bit of research. Heck, ask AI to do it for you if you can’t get a report from someone working directly with them. And if you can get them to talk to you, it’s a home run.

Ideally, get them to articulate their priorities, values, and beliefs. That should be easy, especially when dealing with a smaller organization. This insight will be a telltale of how your collaboration will look like.

You’ll gain a picture of how you, your company, your product, and your goals fit into their agenda. That fit should be a critical factor when choosing a technical partner, business collaborator, or, really, anyone in whom you want to invest loads of money.

Looking back on my 13 years at Lunar Logic, every long-term collaboration we’ve forged serves as a testament to this principle. Our (often unspoken) priorities were consistently aligned with those of our clients and partners.

And if there’s one reason to explain our record 17-year-long (and counting) collaboration with one client, it’s precisely this match. By the way, not only is it the longest gig in the history of Lunar, but also, hands down, the best client we could have dreamt of.

Coming back to Lunar’s focus, it’s never been on rapid growth, widespread fame, or even undisputed technical superiority.

We’ve been this crazy company that decided to experiment with radical organizational culture. We have no managers. Anyone can make any decision (in a structured way, of course). By many accounts, we are rebels.

Does it work, though?

I bet Michael, who has collaborated with us for 17 years, would confirm. And he’d be far from the lone example on this account.

People stay at Lunar for over twice as long as the norm in our niche suggests. So, it’s another voice that we do something right.

But walking the talk, if you want to get an accurate picture of whether there’s a match, let me know. In the spirit of transparency, which is one of our values, I’m happy to share a lot about Lunar.

Then, it’s anyone’s choice whether we are a good match or not.

Some time ago, I had a lengthy exchange about how we work at Lunar Logic, which behaviors are OK and which are not. At one point in the discussion, I realized that the source of the different stances in the dispute was a very different perception of what organizational culture is.

Organizational Culture

When I’m referring to organizational culture in my presentations and writing, I typically use quotes from Wikipedia.

“Organizational culture is the behavior of humans within an organization and the meaning that people attach to those behaviors.”

“Culture includes the organization’s vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits.”

Interestingly enough, over the years the exact phrasing of Wikipedia article on organizational culture has evolved so you won’t find identical words there anymore. Either way, the original quotes stand the test of the time.

If you need a more concise definition, I could propose something like “a sum of behaviors of everyone in an organization, or a part of it, and the reasons behind these behaviors.”

Even shorter: “how everyone in a group behaves and why.”

Building Blocks

From the perspective of a person who wants to learn an organization or to influence the culture shift, not all the building blocks are equal. It is near impossible to change people’s fundamental beliefs or core values. It is neither easy nor fast to alter subconsciousness. Habits, assumptions, and perceived systems often reside in the subconscious part of our thoughts.

What’s more, all of the above, except for some habits, aren’t easy to spot. Ultimately no one has their core values tattoed on their forehead, and very rarely we are aware of these inner drivers of others’ behaviors. It’s no wonder. No one teaches us to pay attention to that.

The most visible aspects of culture, and thus, the easiest to work with, are rules and norms, respectively. Rules, by definition, should be written down, so they are accessible to anyone interested. Norms are a bit trickier since they’re defined by what people believe is, or is not, appropriate. Either way, if one pays attention, it is not hard to derive organizational norms by merely observing what people do and what they do not.

The Role of Observation

Let’s assume that you’ve just joined a new company. You enter our office cantina and see me having a beer with my lunch. You realize that there was nothing about that in the rule book you read during the onboarding. However, a societal norm is that we don’t drink alcohol during work hours. How do you react? Most likely, you look at other people to probe their reactions. If they ignore my behavior altogether, it appears that it is OK for me to have a beer during lunch.

Note: it’s too little to tell what the norm is yet. It’s a decent first step, though. You may still want to watch whether other people do the same thing or instead I am a special case, and I can do things others can’t. Oh, and it may be relevant whether a beer was a regular or non-alcoholic one.

Either way, eventually, you have a good sense of whether you (or anyone else) can safely have a beer for lunch. You will derive that knowledge by merely observing and absorbing the environment around you.

Observation is indispensable too in the context of rules. Something can be written down as a rule and still get ignored. We could tweak the story above so that there is a rule, e.g., in the employment contract, that explicitly states that drinking alcohol at work is forbidden. This way we’d have a situation when a norm (having a beer with lunch is fine) contradicts a rule (it is prohibited).

The outcome would be the same altogether. The norms trump the rules. Without observation, it is neither possible to figure out the norms nor to learn which rules are there in the name only and which are the law.

Figuring Out Organizational Culture

If one aims to understand the organizational culture of a company they just joined, there is no real shortcut that would be an equivalent of prolonged observation. Some tricks may hasten the process, of course. Not too much, however. You can’t learn the organizational culture in several weeks. At best you can familiarize some parts, but it would be far from a complete picture.

Again, let’s imagine that you’ve just got hired. You joined a team of five, which is a part of a division of 40-something, and the whole company is around 200 people. Figuring out how to safely operate and behave in the closest neighborhood — your atomic team — should be a straightforward process. You’ll get plenty of opportunities to observe, and feedback loops will be short. You’ll have validation paths readily available through the means of chatting with your team lead and your peers.

This way, you would explore, however, only one small area on a big map of organizational culture. Yes, it is by far the most important for your everyday work, but hardly enough for a complete understanding of how to act in all situations, including some that may get you fired.

There are interactions within your division, both cross-team and division-wide. There are all sorts of rules and norms that apply to a company as a whole, or specific ranks, or even particular people. Discovering all these uncharted areas takes time.

The Tricks

There are a few tricks that can speed the exploration a bit. By no means, they are a substitute for awareness and observation, but they help.

The higher up in the hierarchy someone is, the bigger their influence over the culture. To get a roughly accurate, even if a vastly incomplete and imprecise, image of the organizational culture, you could shadow the company’s CEO for some time. Since the behaviors of higher ranks often get copied at lower levels, a sneak peek at the very top of the hierarchy gives you a potentially most statistically significant representation of the culture.

Ignore officially expressed company values, its vision, or a mission statement. It is such a rare case that a company indeed follows an aspiration expressed in either of them that they most usually are a source of noise, not signal. Look at the actual behaviors, not aspirational statements.

Seek conflicts and watch how they get resolved. Controversial situations require parties to take a stand, and thus, they trigger action. On such occasions, it is easy to see who calls the shots and whose opinions count. The friction that is an integral part of any conflict is a natural fuel for shaping and reshaping norms, challenging rules, and expressing less visible drivers of the culture: values, beliefs, and assumptions.

Ultimately, though, there’s no better trick than patience and perceptiveness.

Crucial Role of Understanding Culture

OK, but why is understanding the organizational culture so important? Unless we have a good grasp of it, we are bound to either traveling only through well-beaten paths or risking frustration.

Well-beaten paths are safe. It’s easy to follow what everyone else is doing. It means, however, that our influence on the organization would be limited to the face value of our everyday contributions. We wouldn’t be challenging or changing our team and our company. Typically, that’s perfectly fine, even expected, during an initial period at any organization. Later on, not necessarily so. At least not in a firm that hopes to use the potential of its people.

The other scenario is quickly jumping to the acting mode, challenging rules, status quo, opinions, behaviors; it’s a departure from a beaten path. The problem is when such a departure happens in uncharted territory. There are things which are appropriate and those that are not. There are norms, beliefs, assumptions, and values. Blindly flailing around means that we would inevitably violate these informal constraints.

This way we will, of course, uncover the part of the uncharted territory, but the price is high. One part of it is frustration: “Oh, we don’t do such things here; I wasn’t aware.” The other part is reputation. Opposing or challenging things with little effort to understand them first doesn’t score much respect. There is a world of difference between being a contrarian who understands the culture and one who doesn’t.

If we aspire to influence organizational culture eventually, learning it first is a crucial and obligatory prerequisite.

How does transparency feel? Early in my career, I had an occasion to experience that. I was working in a typical organization where lots of things, payroll included, were secrets. Then the salary list leaked out. It wasn’t a huge leak, i.e. it didn’t go public, but I was close enough to the source that I could take a look.

When I was about to open the spreadsheet with the data, I was thinking about my expectations. I hoped that information about salaries would help me to make sense of how people in the company are perceived by the leaders. I thought that it might provide me with role models to look up to. I was ultimately looking forward to transforming new knowledge into some inspiration and motivation for myself.

That was totally not what happened.

What I saw on the payroll was a lot of unfairness. I saw numbers I couldn’t possibly justify. I couldn’t make sense of the system that produced these numbers. Most of all, I was painfully aware that there was literally nothing I could do to change that. After all, I shouldn’t have seen the data in the first place.

Ultimately, I got frustrated.

Transparency without Autonomy

With the benefit of hindsight, I see a broader picture of that experience. On one hand, I am aware that back then I couldn’t have had the whole perspective on what was valued in the organization and thus my sense of unfairness might have been exaggerated. I didn’t have insight on systems thinking to be able to rationalize the shape of the payroll as a pragmatically predictable outcome. Should I understand that my outrage and my frustration wouldn’t be that big.

The bottom line remains the same. I should have been expecting frustration as the only logical outcome of such an experiment. I put myself in a situation when I was about to get access to data that was important to me on an emotional level and yet I knew I had no influence whatsoever on shaping the future state of that data.

I got transparency with no autonomy to act. Heck, I couldn’t even ask all my “whys” to better understand what was going on. I put myself in a position where my frustration was guaranteed.

Transparency without autonomy is a recipe for frustration.

It’s like telling people stuff that they don’t like, or agree with, and then telling them to live with it. You don’t like who gets a raise? Live with it. You don’t agree with who gets promoted? Live with it. You don’t agree with disparities on the payroll? Live with it. You get the idea.

A side note: I refer to autonomy and not authority. There’s a significant difference between the two. For the sake of this discussion, the crucial part is autonomy defined as the actual use of decision-making power, not just the availability of decision-making power.

Autonomy without Transparency

What about the opposite situation? Can we let people act while keeping them from accessing sensitive data? The answer to this case is rather obvious, I think. Acting in an organizational context means making decisions. Can we then make decisions with limited access to relevant information?

Yes, we can. The question is: would that be good decision-making? Even though a common perception that more information available to a decision maker would result in a better decision is a myth, it is still crucial to have access to a few most important bits of data.

In our context most important often translates to most sensitive and thus available to few. If we let people decide without making such information accessible we’d set them up to fail. Their decisions simply won’t be informed and thus random and low quality.

Decentralizing control requires decentralizing both the authority to make decisions and the information required to make these decisions correctly.

Don Reinertsen

To stick with the original example, just try to imagine people deciding on raises without knowing what salaries are.

Transparency and Autonomy

OK, so neither autonomy nor transparency alone does make sense. What does, then? If we aim to improve either one we need to think about both at the same time.

Each time we loosen transparency constraints we should answer: how can people act on newly accessible data? What will they be able to do if they aren’t satisfied with what they see? The answer doesn’t have to be full control over changing the part of reality that we’ve just made transparent. They do need to have influence, though.

When we were making salaries transparent at Lunar Logic we didn’t give people the power to set the salaries. Well, not initially. We gave them as much as, and as little as, influence: an option to start a discussion about a salary and space to share their opinions about any raise under discussion. Even if the final decisions were still being made by the same person as before the change there were clear options anyone could exploit if they were dissatisfied with any number on the payroll.

While eventually influence has transformed into full control over decisions, the key move was the initial one. The one that gave people influence.

The guidance is much more straightforward if we start with the intention of extending autonomy. We simply need to answer what information we consider when making this kind of decision and then make that information available.

Most often the hard part is realizing what range of information we really consider. When we started experimenting with the decision-making process at Lunar Logic, the first step was to let people spend company money without asking permission. The part of the process was, and still is, what we call the advisory process.

As a part of advisory processes, I was often consulted about planned expenses. The most important lesson for me from the advisory processes was how unaware I was of all the data, experience and mental models I was using when I was making decisions myself. This, in turn, made me realize how much more transparent with all these we need to become to get autonomy working. A simple example: if we want people to spend company money wisely they should know what’s the financial health of the company and how specific expenses may affect it, i.e. regular financial reports should be available to everyone.

Moving the Bar

The bottom line is this: when we raise the bar of transparency we need to raise the bar of autonomy as well. And vice versa.

It is not as obvious as it sounds. Each change fuels and influences another. It is more of a balancing act than a prescribed set of moves one could repeat in every situation.

There is a caveat too. Transparency is a one-way street. You simply can’t undo making salaries transparent. You can’t make people unsee the payroll. Then again, transparency doesn’t go alone. It must be followed by autonomy. This means that changes on both accounts are almost impossible to reverse.

In fact, rolling autonomy back is a bad idea not only because it is connected to transparency. Even if we looked at autonomy in isolation there’s a painful penalty to pay for removing autonomy that has already been granted. It is an equivalent of saying “we weren’t serious in the first place about giving you that power”. Not only we are back to the square one but also people would be discouraged to embrace autonomy in the future because they got burned.

The obvious advice in this context would be to tread carefully and to take one’s time. We will find ourselves in a place where we feel like we took a step to far. What we can do is to take a break until we learn how to embrace the new situation.

At Lunar Logic it happened sometime after we made salaries transparent and gave people influence over raise decisions. Suddenly we found ourselves in the middle of what we now call the raise spree–a lot of raises were happening simultaneously with little consideration of their ripple effects. Instead of removing autonomy or double guessing individual decisions, which would end up the same, we focused on educating ourselves. How individual raises would influence other decisions about salaries and the overall financial condition of the company. Only as soon as we felt comfortable with the autonomy we had we moved the needle again.

Neither or Both?

If we stick to the assumption that increasing autonomy and transparency should go together, the question we should ask is: should we even bother? If it’s the choice between both and none, why not to choose none and stick with the status quo?

The younger version of me would say that more transparency is always better than less. Well, now I would argue with my younger self. There are edge cases, like the one that I started with. However, in general, I believe that it is easier to lead a company when more information is available to everyone. At least in a part, it comes from a fact that not only is it more transparency, but also more autonomy. The latter releases a part of the burden of people in leadership roles.

I do have a better answer when it comes to autonomy. Dan Pink points autonomy as one of the crucial factors that our motivation depends on. Little autonomy, little motivation, he says. Given how discouraged autonomy is the modern workplace we can only do good if we pursue it more. It won’t happen unless we care about autonomy and transparency together.

For me the answer is obvious. It’s both; not neither. As difficult as the evolution can be, it’s worth it.

There is a remark on hiring I’ve heard quite a few times recently. It’s about sending a rejection message to a candidate. It goes along the lines: “Just don’t tell them that they’re not a good fit for the culture. That’s bullshit. That means nothing.”

A Bad Fit

I can’t say that such a remark lands well with me. I do, however, understand where it is coming from. As the industry, we started paying attention to the culture. It’s on our radars. We may have only a vague understanding of what organizational culture is but it is already a part of the discourse. This vagueness of understanding of the concept actually comes handy when there’s no tangible reason to reject a candidate but we still somehow didn’t like them.

They are a bad cultural fit.

Whatever that means.

See, the problem I have with many of these statements is that they’re used as a bludgeon without much thought invested to why “we didn’t like” a candidate. Because of that we often throw the baby out with the bathwater.

A Good Fit versus Likability

When hearing about lack of cultural fit I often follow up ask what it means that a candidate wasn’t a good cultural match. The answer, most often, is something like “that’s a person we wouldn’t get on well with”, or “that’s not a person I’d like to hang out with”, or “it’s not my kind of a person”. These boil down to how likable a candidate is for an assessing person.

The problem is that likability is a terrible way of assessing cultural fit. Not only is it not helpful, but it is also counterproductive.

If we chose likability as our guiding principle to judge cultural match we would end up with a group of people similar to each other. They’d have similar interests, many shared views and beliefs, etc. We would be building a very homogeneous culture. An echo chamber.

Sure, there wouldn’t be much conflict in such a group. There wouldn’t be much creative thinking either. There would be premature convergence of the ideas, little scrutiny, few alternative options would be explored.

If we consider knowledge workers such a team would have appalling performance. Thus my problem with such a shallow understanding of cultural fit.

Shared Values, Diverse Perspectives

So what is an alternative? How to define cultural fit in a way that would yield a high performing team? General guidance would be to optimize for representation of different, diverse points of view while creating an environment where people are encouraged to contribute.

These two ingredients—diversity and enabling environment—balance each other in a way.

We want diversity to have an option to learn about other, non-obvious ideas. Such ideas won’t come from people similar to ourselves. We thus want to have a range of different people in a team. And when I say “different”, I think of different walks of life, different experiences, different beliefs, different preferences, different characters, etc. This might be translated to maximizing diversity.

However, diversity for the diversity sake is not the way to go. This is exactly where the second part kicks in. We want to sustain an environment where people share their diverse opinions, and not simply have them. For that to happen we need to have a common base that encourages people to feel comfortable enough to contribute.

That common base is a set of shared values. I won’t give you a list as I don’t believe there’s the way. There are many ways to build such an enabling environment. There are, of course, usual suspects: respect for people, emotional safety, or autonomy, just to mention few. The important part is that such a set of shared values provides an informal, and typically implicit, contract that makes it safe to contribute.

Cultural Fit

With that founding principle, the definition of a cultural fit would be very different. A good match would mean that we share core values but beyond that, a candidate is as different from current team members as possible.

This means that friction will happen. Conflict too. Not everyone will feel comfortable all the time and not everyone will be getting on well with everyone else.

This means that when we decide there isn’t a good fit we may come up with a much more tangible explanation why. It is because we don’t share values—e.g. we perceive a candidate as disrespectful—or we don’t sense any aspect in which a candidate would stretch diversity of the team in one of the desired dimensions.

Note: not all dimensions of diversity are equal. There’s little, if any, value in my experience as a sailor in the context of product development. There’s more value in, say, cognitive studies that someone else went through. That’s why I add a quantifier “in the desired dimension” next to “diversity”.

Some time ago at Lunar Logic, we rejected a candidate for a software developer role whose focus was purely on their technical skills. There’s nothing wrong in that of course unless this is the only dimension a candidate uses to look at themselves and at others. There was some mismatch in shared values, e.g. little understanding and appreciation for teamwork and collaboration. We didn’t see much diversity that they would add to the mix either—we already have quite a bunch of excellent developers.

Interestingly, the decision was made despite the fact that we liked the candidate and were getting on well with them. That’s a complete opposite of what a naive approach to cultural fit would suggest us to do.

We believe that we are better off with that decision. More importantly, we believe that the candidate will be better off too. As long as they find a company where there’s a better overlap in shared values not will they contribute more but will also be appreciated better.

One of the concepts that has been widely popularized by Agile movement is self-organization of teams. It lands very nicely in any Agile context, no matter the discussed method or even a general approach one might have to Agile implementations.

It is, after all, an idea that appeals to line employees and managers alike. Let’s give atomic teams power to decide how they would work within safe constraints. Safe here means safe for managers, of course. In one swift move we address, at least to some point, two issues. One, we increase empowerment across team members as they get more say over how they work. Two, we remove managerial burden of work organization at a the most detailed level, at which managers’ competence can frequently be challenged.

All but the most micromanagerial types should be satisfied.

Since how the work gets done is decided closer to where it actually gets done, we increase odds of good processes and policies. At the same time, through more autonomy we improve motivation and engagement.

It’s not without a reason that self-organization at a team level got its way into common practice.

History of Agile (Oversimplified)

The starting point for self-organization as a technique or a practice is not unlike other agile practices. Early Agile methods were focused on a team. The perspective might have differed, but the atomic entity in consideration was always a team. Be it Scrum, XP, Kanban or anything else, in their early forms there was little mention on interoperability across teams either horizontally or vertically.

Obviously, once Agile got traction there was a need for scaling the approach up. Initially, some makeshift approaches were being made to do that (anyone remembers Scrum of Scrums?). Eventually, whole methods were built to enable large scale Agile implementations—SAFes and LeSSes of this world.

These approaches were built around a core method, typically Scrum, and took good parts of other methods whenever authors saw fit. Fundamentally, the value added of these methods was in a description how to roll everything out in a big organization. The desired outcome would be to see the core method implemented in multiple teams while ensuring some level of alignment across an organization.

It was about scaling up the method and not scaling up the principles behind. It was about getting more Scrum / Kanban / whatever teams in an organization and not figuring out how the basic values and principles would have to work if they were applied on different levels of an organization.

That’s exactly when we petrified self-organization as a technique relevant to a team and a team only.

The Broken Leg

Let’s look at the problem we are solving with self-organization. We give people autonomy and they organize work better as they are most knowledgeable how the work can be done optimally. At the same time, since we distribute autonomy, we increase motivation and engagement.

So far, so good. I can’t help but ask: are these problems exclusive to the lowest levels of organizations, i.e. atomic teams, or are they more endemic?

There’s no reason to think that the disease isn’t wide-spread. After all, for a century we are perpetuating Taylor’s and Ford’s ideas of separating the workforce from workflow design. It doesn’t happen on the factory floor only but throughout the whole hierarchy. A higher rank designs how lower rank works and what is expected of them. It is, in fact, the hierarchy itself that discourages us to distribute autonomy more than absolutely necessary.

What we are looking at is not just a marginal problem of line employees going shallow into the higher ranks. The injury is not a scratch but a broken leg.

The Band-Aid

Despite how widespread the disease is the solution we have is far from enough: self-organization… but just at a team level. It is exactly the proverbial band-aid for a broken leg. It does the work, i.e. stop the bleeding, but only as long as the injury is skin-deep.

We know it’s not the case.

And yet we keep curing our broken organizational leg with just more band-aids of atomic teams embracing more autonomy. At the same time, we don’t address the structural problem of lack of autonomy throughout the hierarchy.

There lies the root cause of the problem. Working only on the lowest possible level, i.e. teams, we already have hard constraints of how far we can go with autonomy (and it’s not far really). Unless we start working on self-organization systematically, we won’t get much long-term effect in an organization. It would be just one more band-aid.

The Cure

We got principles missing when we were figuring out how to scale Agile up. Interestingly enough, it had long been figured out in the military. Even more curious, the problem had been solved with tangible practices and not with some vague aspirations. The difference is that the military practices were designed as scalable from the very beginning.

Take briefing and debriefing as an example. It is a pair of activities of sharing the goals and the context (the orders) by an officer to a unit and having the unit brief back to the officer what they understood. The goal of briefing and debriefing is for any rank to make sure that: a) a lower rank unit understands the goal (the purpose) of a higher rank officer and one rank above, and b) a lower rank unit understood correctly what was briefed.

Such a practice is rank-agnostic. It can be applied at any level of a hierarchy without any specific adjustments. It is entirely not so with Agile self-organization practices that were immersed in 7 plus or minus 2 people as a definition of a team.

If we aspire to see organizational transformations that would be an equivalent of turnaround of some of our teams, we need to reinvent self-organization. Autonomy distribution must become either a rank-agnostic practice or it has to have dedicated solutions for each organizational level.

The former, while much harder to design and implement, is potentially much more applicable. It is the domain where tools such as decision making process, open salaries, or inclusive hiring process reside. The meta pattern here is that by default any decision is made after collective advisory process and at a lower level that it would have been made otherwise.

I acknowledge that these examples may sound radical. They are, indeed. And yet adjusting them to a softer form is straightforward. It doesn’t have to be that anyone can decide about anyone else’s salary. It can be that anyone can decide about anyone else’s salary within their team and in accordance with budget constraints. What matters is that the decision is made at a lower level (a team mate and not a manager) and the whole team is invited to take part in the process.

Such a change won’t happen overnight. Even in a small organization it likely requires years and not months to implement. However, unless there is a motion toward that direction, we are just paying lip service to self-organization and apply more band aid to broken legs.

As long-term readers likely know I am a big fan of the idea of collective intelligence and big proponent of optimizing teams toward high collective intelligence.

First, what is collective intelligence? The easiest way of explaining that is through the comparison to individual intelligence (IQ). While IQ tests differ in type the pattern is similar: we ask an individual to solve a set of complex problems; the better they perform the higher their IQ is.

By the same token, we can measure intelligence of teams through measuring how well a group solves a series of complex problems.

There are a few very interesting findings in the original research on collective intelligence. It all starts with an observation that collective intelligence beats the crap out of individual intelligence. In highly collectively intelligent teams’ solutions provided by a group were systematically significantly better than solutions offered by any individual, including the smartest person in the room. However, even in teams with low collective intelligence the group solutions were on par with the best option provided by an individual.

It totally makes sense when we think of it. No matter how smart the solution provided by an individual is it most likely can be improved through clues and suggestions provided by others. Either directly or indirectly. And it doesn’t matter whether the others are even smarter. The thing that matters is that they think differently.

This theme is portrayed well in some pop-cultural productions. In Sherlock series the protagonist surprisingly frequently refers to his sidekick—John Watson—as not too clever or even dumb. On even more occasions Sherlock stresses that he needs Dr. Watson to inspire his superior mind. It’s not that Watson is smarter than Holmes. It’s that together they are smarter than Holmes alone, even given his prodigious mind.

The same pattern has been exploited in House M.D. series, where the team’s effort was consistently beating individual effort. It was so even if the final solution was facilitated mostly through the brilliance of the main character.

As a matter of fact, collective intelligence in play is one of those things that you can’t unsee once you’ve seen it. Like the other day, when I was sharing the idea of a workshop with one of my colleagues and I mentioned one feature I’d love to add to the app I was going to use during the workshop. The problem was that we explored an idea to add that feature before and, because of some old architectural decisions, adding the feature was no easy feat. Thus, we gave up. My colleague listened to my complaints and asked why we wouldn’t just add a simple and dirty hack just for the sake of the workshop. I was so immersed with the whole context of how hard it was to do it properly that the idea wouldn’t even cross my mind, no matter how obvious it might sound in retrospect.

And it wasn’t even a context of a persistent team; merely an ad-hoc discussion in a random group. Think, how much more we contribute in a more permanent setup—in a team which shares the same context on a daily basis.

The interesting follow-up to the observation that collective intelligence is supreme is that collective intelligence doesn’t depend on individual intelligence. As a matter of fact, there’s no correlation between the two. In other words, hiring all the smartasses doesn’t mean they’d constitute a team of high collective intelligence.

It is likely better to support a brilliant mind with folks who aren’t nearly as eloquent but provide another, diverse, point of view that to get more of the brilliance. What’s more a team built out of people of average intelligence can be better off than a bunch of smart folks gathered together.

It is because collective intelligence—the brilliance of a group—isn’t fueled by smarts but by collaboration. Two critical factors for high collective intelligence is social perceptiveness and evenness of communication. The former is awareness of others, empathy, and unselfish willingness to act for the good of others. The latter is creating a space for everyone to speak up and facilitating the discussions so that all are involved roughly equally. Neither of these attributes directly taps into individual intelligence.

That’s, by the way, where pop-cultural references fall short. Neither Holmes nor House care about the collaborative aspect of work of their teams and both make a virtue out their utter lack of empathy. It means that their teams are of low collective intelligence. I can’t help but thinking how much they could have achieved had they been optimized more toward collective intelligence.

Most of our industry fall in the very same trap when hiring. Tremendous part of our recruitment processes is optimized toward validating individual skills following a subconscious belief that this is what’s going to make teams successful.

As Dan Kahneman observes in his classic Thinking Fast and Slow, if our brain can’t easily answer to a difficult question it subconsciously substitutes the question with a similar one which is easy to and treats the answer to the latter as if it was the answer to the former. In this context we may be substituting a difficult question about how a candidate would perform in a team with much simpler one about how they would perform individually. The problem is that the assessment of a candidate may be very different depending on which question we answered.

If we truly want to optimize our teams for good collaboration we need to focus on the aspects that drive collective intelligence. We need to focus on character traits that are not that easy to observe, and yet they prove to be critical for teams’ long-term success, such as perceptiveness, awareness, empathy, compassion and respect. Ironically, such a team will outsmart one built around smarts and wits.

Radical Self-Organization is a way I tend to label organizational design that we adopted at Lunar Logic. It’s been dubbed The Lunar Way too on occasions. Anyway, it draws from different approaches to design organizational structure in a very flat, non-hierarchical way. Describing what we do is probably worth a separate post on its own, yet this time I want to focus on one underlying principle: autonomy.

Our evolution toward Radical Self-Organization was experimental and emergent. Initially we didn’t set a goal of distributing authority, autonomy, and all the decision-making power across the whole organization. It emerged as a sensible and possible outcome of further evolution on the path we set ourselves onto. This means we were figuring out things on our way and quite often explored dead-ends.

The good part of such approach is that, we wanted it or not, we needed to understand underlying principles and values and couldn’t just apply a specific approach and count on being lucky with the adoption. No wonder that on our way we had quite a bunch of realizations what was necessary to make our effort successful.

One of the biggest of such realizations up to date for me was the one about autonomy.

A traditional, hierarchical organizational structure that distributes power in a top-down manner is ultimately a mechanism depriving people of autonomy.

Let me explain. Top-down hierarchy addresses challenges of indecisiveness and accountability. We ideally always know who should make which decision and thus who should be held accountable for making it (or not making it for that matter). So far so good.

The problem is, that the same mechanism discourages managers throughout a hierarchy to distribute the decision-making power to lower levels of organization. After all, if I am held accountable for a decision, I prefer to make the final call myself. Even if I end up being wrong it’s my own fault and I don’t suffer for mistakes of others, i.e. my team.

In short, as a manger in a traditional structure I’m incentivized to double-guess and change the decisions proposed by my team even if I go as far as consulting my calls with the team. In other words, I am discouraged to distribute autonomy.

This has fundamental consequences. Autonomy is a key prerequisite of being motivated at work. Lack of motivation and disengagement is a plague at modern workplace. In 2013 Gallup reported that worldwide only 13% of employees were engaged. We can’t expect our team to be creative, highly productive and responsive to ever-changing business environment when they simply don’t give a damn.

And it’s not teams’ fault. We create systems where autonomy, and as a result engagement, simply is not designed in.

It’s not managers’ fault either. We set them up in a structure where they are punished for distributing autonomy.

The biggest problem is that hierarchical structure is a prevailing management paradigm, which we are taught from the earliest contact with the education system. The very paradigm is the plague of the modern workplace.

There is one important side note to mention here. Autonomy doesn’t equal authority. The two works well as a pair but neither is a prerequisite to have the other.

I can give people authority to make project related decisions, e.g. that we terminate collaboration with a client. They can formally do it. However, if I instill enough fear of making such a tough call so that everyone is too afraid to do so people won’t have autonomy to make such a decision.

On the other end, we may not distribute authority formally, but we may live up to the standards of “what’s not forbidden is allowed” and may believe that “it’s easier to ask forgiveness than it is to get permission”. In such an environment people will be making autonomous calls even if they don’t always have authority over the matter.

Coming back to the argument about disengagement, it’s about lack of autonomy, not lack of authority. In other words, simply giving people power to make some decisions won’t solve the issue. It’s about real autonomy, which unfortunately is so much harder to achieve.

If we agree that lack of autonomy is the problem we have quite an issue here. Since the root cause of the problem goes as deep as to the way we design organizations. Changing how we think about the domain is a huge challenge.

The other day I was reading an article that mention a guy who opened a branch office in another city and let it run as a Teal organization with no managers and huge autonomy. His summary of his own story was something along the lines: there are 30 people with no management and they are doing great, but I think by the moment there are 50 of them we’ll hire a director.

This shows how strongly we are programmed to think according to old paradigm. It’s like saying “it’s going great, let’s kill it because, um, my imagination doesn’t go as far to imagine the same thing in a slightly bigger scale.”

It also shows how big of a challenge we are about to face. Simply changing how the power is distributed in an organization won’t do the trick. Unless such a change is followed with the actual change in power dynamics, enabling autonomy in lower levels of an organization it would simply mean paying a lip service. The most difficult change that needs to happen to allow for such a transformation is the one happening in the mindset of those in power, i.e. managers.

That’s bad news. If we consider power as privilege, and I do perceive it so, it means that many managers would be oblivious to the notion that they are somehow privileged over others. It means that we first need to work on understanding of domain. Once there, there’s another challenge to face: giving up the privilege. It can’t just be done by setting up different roles. That would be simply distributing authority and that is not enough.

The real game changer is distributing autonomy: the courage to make decisions even when—especially when—a decision would go against manager’s judgement. After all, the plague of the modern workplace is not lack of authority, but lack of autonomy. Without addressing it we should neither expect high motivation levels nor high engagement.

On many occasions, I’ve shared how we operate at Lunar Logic. We exploit radical transparency—every single bit of information is available to everyone at the company. We exercise radical autonomy—everyone can make any decision on the company account. We entertain radical self-organization—there’s no enforced structure or hierarchy, there are no managers, and the CEO role is purely titular. While it sounds extreme when you hear about it, it feels even more so when you live it.

Given that we went through a transformation from a rather typical organizational structure, we very well understand how many mistakes one can make when introducing such an organizational model. After all, we made great deal of them ourselves.

We didn’t use any of the labeled models when approaching our evolution. We are, however, very frequently dubbed as a Teal organization, as described by Frederick Laloux in his book Reinventing Organizations. I don’t necessary fancy the label as I’m not overly fond of the model proposed by Laloux. Nonetheless, the label is somewhat useful to communicate how we are organized at Lunar.

The interesting thing is how people react to Lunar Logic story. Over time I get more and more reactions like “oh, we’re working exactly the same way” or “yeah, we are Teal too”. This often triggers some questions on my end. Do you have transparent salaries? How do you set salaries? Do people know the contract details? How much company money can people spend without getting a permission? Can people leave the project they’re on when they want to? How is the strategy decided? Which decisions can be made by high-ranks only?

Inevitably, most of the answers are as expected. “We can’t let people decide to spend company money at their whim, let alone set their own salaries. That would ruin the company! We can’t even let people know what everyone else earns as it would trigger huge frustration. And obviously strategy, and many other important decisions, are prerogative of senior managers.”

Other than that, you are perfectly Teal, aren’t you?

Progressive Organization is an umbrella term I use to describe different modern approaches to redefine how organizations are designed. Declaring that a company is one of flavors of Progressive Organization became a fashionable thing. People aspire to have flat-structure organizations, and to empower people (which is a completely flawed goal by the way). When it comes to labels, Teal organizations are getting most of the buzz these days. It’s a trendy thing to say that an organization is Teal or at least aspires to be so.

Teal is the new black.

The problem is that little comes afterwards. Transforming an organization from a traditional, hierarchy-based model toward radical self-organization and radical autonomy (both being crucial parts of becoming a Teal organization) requires lots of changes.

I don’t necessarily say that fully transparent salaries, salaries set by employees themselves, freedom over choosing what people work on, no permission expected to spend significant amount of company money, or all the authority distributed to everyone at the company are all required to dub a company a Progressive Organization. I do say that, in one way or another, the way all these decisions are made need to be reinvented to be more inclusive for everyone at the company.

In most cases the disputed companies have no will whatsoever to challenge the old operating system where managers make vast majority of the important decisions. I even heard people explicitly stating that they were “somewhat Teal” and had “no will to become more so”. Why would they even refer to the label then?

Because Teal is the new black.

If I counted companies whose representatives declared that they work in a similar way to Lunar or that they are Teal I should be over the top. After all, I’m somewhat pessimistic about the pace at which the organizations would evolve away from the old, entrenched, century-old, hierarchy-based management paradigm. The reports I keep hearing should be a proof that the situation is far better than I thought.

I stay skeptic, though. The reason is that most of the reports are about Progressive Organizations in the name only. Hearing the stories, I’m not comfortable with as little as saying that it’s their genuine aspiration to evolve into a new organizational design. I would rather describe it as a pretense, and the one introduced on the weak grounds of fashion.

The outcome will be two-fold. On one hand we already see inflation of the commonly used terms, like Teal. When someone says “Teal” it means less and less over time as it’s used to describe lots of different things. It wasn’t a precise term to start with and the more popular it is the faster the watering down process is. It is the fate that awaits any niche concept that hits the mainstream. The term Agile is a canonical example. These days it is used to label pretty much anything.

Personally, I don’t care overly much about this effect, though. After all, I don’t have any stakes in promoting Teal.

I do care about the other effect and I believe it will be positive in the long run. Given increasing popularity of the idea, even without implementing it the proper way, we can expect that more and more people would become aware of alternative organizational models. While in the short run I still see little action to truly transform companies, awareness is something that will provide leaders and managers with options in the long run.

At the beginning of our way at Lunar we were inventing lots of things ourselves. There was limited literature about alternative models and none of us was into what was available. There were few stories of progressive companies, even though they exist at least since fifties. We didn’t know much where we were headed or what the desired endgame looked like.

Awareness of what is possible, makes it easier to plan the change. With increasing number of available stories of different Progressive Organizations, there is plenty of inspiration to design own model and run own experiments. In the long run this fashion will, I believe, have a lasting effect on how humane our organizations are. In the even longer run it will hopefully affect whole industries.

That’s why on one hand I treat Teal as a label that often bears little value but I’m happy that it makes its way to common awareness. In a way I’m happy that Teal is the new black.

Some time ago, during our weekly Lean Coffee at Lunar Logic, which is the only all hands meeting at the company, I made a disrespectful comment. It was a topic which I have a strong opinion about. A particular example that was brought to support one argument triggered a visceral reaction on my side. I said more, and more emotionally, than I should have.

A day after I asked people for feedback to understand better what had happened and how I could avoid crossing the line in future. The recurring theme was that the way I expressed myself, both the words and the form of my remark, was disrespectful to some.

That triggered another discussion some time later, and in a smaller group. It was about the meaning of being respectful and its implication of our behaviors in all sorts of situations.

We started with an assumption that being respectful means acting in a way that doesn’t hurt others intentionally. But hey, there’s the whole unintentional spectrum of effects. Luckily, we are pretty good at sharing feedback and being transparent in front of each other. This means that when someone unintentionally crosses the line it is likely that they will hear a comment referring to that behavior being disrespectful.

Going forward, with such stuff a natural desire is to be on a safe side. In other words, if I have doubts whether saying something would be disrespectful to someone I should not say that. It’s a safe choice.

And that’s exactly where we started questioning ourselves. Doesn’t our aspiration to be respectful affect how we act in less obvious situations? Doesn’t it mean that we restrain critique, harsh words, or confrontation even when we believe that they would otherwise be justified? Doesn’t we restrain ourselves from being authentic?

As a matter of fact, there can be two different sources of such a restraint. First, someone may be worried that criticism or confrontation itself would be received as disrespectful. After all, we are subjective; we may have opposite points of view and we can only control how we express our thoughts, not how they are received by the other party. We may do as much as we can to talk and behave in a respectful way but ultimately we can’t control how our attitude and behavior will be interpreted.

Second, and more importantly, most of us has neither enough skill nor practice to be able to react in such a respectful way contextually. Even if we could succeed given that we prepare, e.g. when sharing difficult feedback, we would fail to act similarly when caught off guard, e.g. in an unexpected discussion about a topic we have a strong opinion about. And I don’t use it as an excuse. I make a simple observation in the spirit of starting with what we have.

Now, if being respectful is our guiding principle we may choose not to speak up, rather than risk hurting someone. That would mean that we suppress conflict, feedback and idea cross-pollination. That would mean that we suppress our development both as individuals and as an organization.

The question we were staring at was: can we be too respectful?

Can we bring respect to the level when it is not justifiable anymore? Can being respectful yield unwanted outcome?

Intuitively my answer was negative. And yet I couldn’t discard the argument as a whole since I’ve experienced the dilemma myself.

The thing is that respect is a nuanced thing. The same behavior may be perceived as respectful by one person and as disrespectful by someone else. The same behavior may be perceived either as respectful or as disrespectful by the same person depending on whose behavior we put under scrutiny. The context matters. The group setup matters. The mood matters. And the list goes on and on.

In a way, we can’t design a set of behavior that would be universally respectful. Well, not unless we are really,really far on the safe side. This, as we already established, would have some unwanted outcomes.

And yet one of these catchy phrases I picked from Stephen Parry kept my mind working.

Showing respect for people does not mean you have to like them, agree with their views, or fail to challenge any half-baked reasoning they may have.

My thoughts were that we might have been using “respect” in overly broad way, like a wall shield rather than a buckler. However, I couldn’t wrap my head around something that would provide some guidance where the line should be. After all, Stephen’s remark focuses on what respect is not and not on what it is.

Then I came across the following passage from Ray Dalio:

Make sure people give more consideration to others than they demand for themselves.

It is more inconsiderate to prevent people from exercising their rights because you are offended by them than it is for them to do whatever it is what offends you. That said, it is inconsiderate not to weigh the impact of one’s actions on others, so we expect people to use sensible judgment and not doing obviously offensive things.

This principle, in a neat way, connects the dots in both directions and through that it addresses the risk of being “overly respectful” through suppressing oneself. It creates responsibility on each party involved in an interaction.

A party that is about to do something that may potentially be disrespectful is bound to use sensible judgement and assess whether such a behavior can be commonly perceived as offensive.

The other party, on the other hand, takes responsibility of using “the respect shield” sparingly, as if it was a buckler protecting the most sensitive areas and not a wall shield covering from literally everything.

This way we create some sort of a middle ground when it comes to respect. We don’t call out all behaviors that can potentially be perceived as disrespectful. We don’t even call out some that touch us personally, assuming good intentions and acknowledging that people have different standards. What we gain thanks to that is an environment where there is a space for more contributions from everyone.

There’s another consequence. Such a notion of respect, which accepts more behaviors, means that when someone calls “disrespectful” it is a strong signal that the line has been crossed. After all we may assume that such a call was considerate and took into account that suppressing someone else without a good reason is disrespectful too.

Of course, maintaining the balance doesn’t come for free. It requires consideration. On one hand there’s a risk of extending that middle ground of consent too far. It would happen when we start accepting behaviors that are hurtful. On the other hand there’s a risk of shrinking that space too much. It would happen when we give less and less slack to others when they act out.

The principle, however, provides us with a pretty good reference point: give others more consideration that you expect for yourself. That’s how we can avoid being both disrespectful as well as suppressing ourselves in a fear of being overly respectful.

Should I know this principle I wouldn’t have said as much in the situation that kicked off this whole thinking process. Yet still I would still make my point strongly, even at the risk of other party feeling attacked by the strong statement. And that would probably have been the best possible outcome.