Pawel Brodzinski on Leadership in Technology

Whatever it takes to lead a team, build a product, and run a business

Tag: progressive organizations

  • Teal is the New Black

    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.

  • Emergent Purpose

    There are those presentations at conferences that stay with us for a long time, even if there seems to be no particular reason for that. And yet they keep coming back for one reason or another. One of such presentations for me was a discussion between Arne Roock and Simon Marcus from Lean Kanban Central Europe years back.

    Even though the topic of the discussion was broader there is one context that keeps coming back to me. Autonomy and alignment. A recurring theme was that we can’t enable autonomy unless we have alignment around a strategy, a goal, or whatever is the thing that orchestrates individual efforts.

    As Peter Senge in his classic The Fifth Discipline puts it:

    To empower people in an unaligned organization can be counterproductive.

    It obviously makes sense. I mean, distributing autonomy is all fine but also creates a risk that everyone would pull an organization toward a different direction. Alignment, which goes through understanding of a common goal, helps up to focus on rowing in the same direction.

    At the same time, watching the session back then, I couldn’t help but thinking that we at Lunar Logic hadn’t been doing that. We’d been continuously distributing more and more autonomy to everyone and at the same time there hadn’t been any official strategic purpose set for the organization for quite some time.

    It the spirit of the discussion between Arne and Simon, who I both respect a lot, that should feel wrong. And yet it didn’t.

    I could even remember my earlier discussions with Jabe Bloom. Jabe was pointing how important were techniques he adopted to help people connect their everyday behaviors with strategic goals.

    Nonetheless, I still felt like imposing a strategy onto Lunar Logic would be a bad move.

    It was months later when I came across the concept of emergent purpose. In its spirit it’s all about understanding organizational culture. It starts with an assumption that everyone at an organization has their individual purpose and it is only natural to pursue that individual purpose. It means that, given no other guidance, everyone would work toward achieving their own personal goals. Some people would have goals similar to others. Some would have very distinct aspirations. Some would have much stronger drive to achieve their own goals than other who would be fine going with the tide.

    If we tried to visualize that as forces pulling an organization in different directions it might have looked like this.

    emergent purpose

    As a matter of fact it would also mean that there is an aggregated force pulling the organization in some direction. And that aggregated force is exactly an emergent purpose.

    emergent purpose

    By its design we don’t set an emergent purpose. It’s simply the outcome of individual purposes. It also means that for some people in an organization the emergent purpose may be the exact opposite of what they individually want. That’s all fine.

    Despite the fact that it’s an emergent property of any organization, we have means to influence the emergent purpose. It happens through hiring. When someone leaves an organization their influence on emergent purpose disappears. At the same the organization hires someone new whose expectations may be better aligned with the emergent purpose.

    emergent purpose

    Through such a change the emergent purpose has been amplified.

    There is interesting dynamics in that process. If my own goals are aligned with the purpose of the organization I’m with, it is less likely that I’d leave the organization than if it was otherwise. And corollary to that, my chance of being hired and wanting to join an organization is higher if there is alignment in place.

    In other words emergent purpose tends to sustain and even amplify itself, even with no conscious effort from leaders of an organization.

    The final, and most important bit about the idea of emergent purpose is that every organization has an emergent purpose. It doesn’t matter whether they have an official strategic purpose or not, or how strong it is, or whether there is alignment between a strategy and an emergent purpose. It’s always there, as the only way to get rid of it would be to make people stop having any ambitions, which is an equivalent of not having any people in an organization, I guess.

    That’s exactly where the fun starts. Given that there always is an emergent purpose, we’d be dumb not to listen to it. Now, I don’t say we necessarily need to pursue it actively, yet understanding it is crucial.

    The reason is that whatever strategy we choose there will likely be a gap between that strategy and the emergent purpose. The bigger the gap the more people would get disengaged and likely eventually leave. From that perspective there is a price to pay for any strategy and, simply put, the better we understand the emergent purpose the better we are suited to achieve our strategic goal. Also, in simple economic terms, there may be strategies that simply are too costly to pursue.

    Ideally, you can do what we did at Lunar Logic. We basically turned our emergent purpose to a company strategy. Instead of imposing a strategy on everyone we listened to each other and figured what’s the most desired path we want to pursue for the time being. That’s how we evolved our aspiration from helping to build products for our customers efficiently to helping the customers to succeed with their products. The latter isn’t focused on the building part nearly as much as the former.

    Interestingly enough, out of the potential strategies that we discussed there was one which would make me leave the company eventually. Luckily for me it didn’t end up being our emergent purpose after all.

    Of course I understand that few companies would go as far as we did. Even though I think it is an awesome idea I don’t encourage organizations to make that bold move. Nevertheless, knowing what the gap between aspirations of leaders of a company and everyone else is crucial if we look for any reasonable level of sustainability.

    Finally, emergent purpose is also one of possible answers for autonomy and alignment issue. As long as we understand what an emergent purpose is we can decide to stick with it or just slightly shape it instead of building alignment externally through officially set strategic goals.

  • Organizational Culture and Hand Cream

    The other day we had a brief discussion at Lunar Logic on an idea that the company should provide hand cream for us. While normally we don’t really discuss such petty expenses, this time quite a few people got involved.

    One could say that the discussion itself cost the company more than a stash of hand cream that would suffice for several years. And they would be right.

    Why was I involved then? And why would I write about it afterwards?

    The thing is we don’t make decisions in isolation. Of course we can look at any decision in individual context. It’s all about hand cream and several dollars, right?

    Not really. Or at least not only. The meta-decision that was being made was about what is the extent to which the company provides its employees with stuff. It was about setting, or rather resetting, what benefits are available.

    Of course, at any company there are things that almost everyone would use, like coffee and tea, paper towels etc. These are no-brainers.

    But then, very quickly we enter the land of less obvious options. Like a hand cream. Ultimately not everyone would be using it. I’m betting around half of people maybe. So we’re making a small nice gesture to some.

    The question is: should we be making such small nice gestures to other groups?

    We have quite a bunch of people who are cooking lunches at the office. Should we buy cooking oil for them? Or spices? These would all be small expenses after all.

    So how about free food available at the office? Well, given that we have a couple vegans, healthy load of vegetarians, some burger lovers, a diabetic, a couple people on gluten-free diet and a couple more trying to lose a few pounds there would always be someone left out. These aren’t obvious decisions anymore.

    These kind of calls are really about deciding about where we set the limits. What is acceptable. It’s not about hand cream. It’s about what rationale would be enough to justify an expense on the account of the company. We are talking about norms.

    Have I just said “norms”? Oh well, it seems we are talking about organizational culture now.

    organizational culture

    the behavior of humans who are part of an organization and the meanings that the people react to their actions

    includes the organization values, visions, norms, working language, systems, symbols, beliefs, and habits

    Wikipedia

    Simply put organizational culture is a sum of behaviors of everyone in an organization. Not only behaviors themselves, though, but also what drives these behaviors: shared values, common principles, rules and norms.

    This is why I got involved in the discussion about hand cream. The trigger was realization that we are just about to change a norm and I’d rather have an explicit discussion about that beforehand. Such a change may affect the common attitude from “we’re not doing such things here” to “yeah, we’ve seen that happening before so it’s OK.”

    What’s more, giving all sorts of benefits away is not something that can be taken back seamlessly. As Daniel Kahneman in his profound book Thinking Fast and Slow points we think differently about something that we gain than about something that we lose.

    In other words getting hand cream is all fine and nice but almost instantly it becomes a new norm that hand cream is there. We’ve just set new expectation level. Once we stop supplying cream we would perceive that as a loss. The cost of removing a benefit would be bigger than a gain we got from introducing it.

    That’s why we can’t label changes that affect organizational culture as safe to fail. Like in: let’s try the hand cream thing and if people don’t care we’ll just stop buying it. When we are touching organizational culture there’s no rollback button. Even when we technically bring the situation back to the square one, culturally it’s different because we have a new experience so we look at things differently.

    That’s why I will get involved occasionally in discussions like the one about hand cream. And that’s why it was worth a blog post.