Pawel Brodzinski on Leadership in Technology

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

Tag: transparency

  • Autonomy and Transparency: Both or Neither

    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.

  • 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.

  • On Transparency

    One of things I’ve learned throughout my career is to assume very little and expect to learn very much whenever changing a job. In terms of learning, there always is a great lesson waiting there for you, no matter what kind of an organization you’re joining. If you happen to join a crappy org this is the least you can salvage; If you join a great one, it’s like a cherry on a cake. Either way, you should always aim to learn this lesson.

    But why am I telling you this? Well, I have joined Lunar Logic very recently. From what I could say before, the company was a kick-ass Ruby on Rails development shop with a very open and straightforward culture. I didn’t even try to assume much more.

    One thing hasn’t been a surprise; We really are a kick-ass Rails development shop. The other has been a surprise though. I mean, I expected transparency within Lunar Logic, but its level is just stunning. In a positive way of course.

    An open discussion about monthly financials, which obviously are public? Fair enough. Questioning the value of running a specific project? Perfectly OK. Sharing critical opinions on a leader’s decisions? Encouraged. Regular lean coffees where every employee can come up with any subject, even one that would be considered embarrassing in almost any organization I can think of? You’re welcome. I can hardly come up with an example of a taboo topic. In all this, and let me stress this, everyone gets honest and straightforward answers.

    Does it mean that the company is easier to lead? Um, no. One needs to think about each and every decision because it will be shared with everyone. Each piece of information should be handled as it was public. After all, it is public. So basically your goal, as a leader of such an organization, is to be fair, whatever you do. There’s no place for deception, trickery or lies.

    One could think that, assuming goodwill, it is a default mode of running a company. It’s not. It’s very unusual to hear about, let alone work at, such an org. There are a number of implications of this approach.

    • It is challenging for leaders. You can’t hide behind “that’s not for you to know” answer or meaningless blah blah. People won’t buy it. This is, by the way probably, the number one reason why this approach is so uncommon.
    • It helps to build trust between people. Dramatically. I don’t say you get trust for free, because it never happens, but it is way easier.
    • It eliminates us versus them mentality. Sure, not everyone is equal and not everyone has the same role in the company, but transparency makes everyone understand better everyone else’s contributions, thus eliminates many sources of potential conflicts.
    • It heavily influences relationships with customers. It’s much easier to be open and honest with clients if this is exactly what you do every day internally. I know companies that wouldn’t treat this one as a plus, but being a client, well, ask yourself what kind of a vendor you’d like to work with.

    All in all, transparency is like a health-meter of an organizational culture. I don’t say that it automatically means that the org is successful, too. You can have a great culture and still go out of business. I just say that if you’re looking for a great place to work, transparency should be very, very high on a list of qualities you value. Possibly on the very top of the list, like it is in my case.

    By the way, if you are a manager or a company leader, ask yourself: how many things wouldn’t you reveal to your team?

    This post wouldn’t be complete without giving credits to Paul Klipp, who is the creator of this unusual organizational culture. I can say that during first few weeks I’ve already learned more about building great teams and exceptional organizations from Paul than from any leader I worked with throughout my career. It goes way beyond just a transparency bit but that’s a completely different story. Or rather a few of them. Do expect me to share them soon.

  • We Know Nothing about Our Teams

    I am a chatty guy. Catch me while I’m not overworked and I will gladly jump into discussion. If you happen to be my colleague, it may be a discussion about our company. That’s perfectly fine for me.

    I believe in transparency so I won’t keep all information as they were top secret. This means I’m likely to tell you more than your manager. Not because I don’t know how to keep a secret but because vast majority of managers talk with their teams way too little.

    With this approach I usually know a lot of gossips told in companies I work for. Since I also happen to fulfill rather senior roles I have another perspective too. I know what is discussed on top management meetings.

    This is sort of schizophrenic experience for me because almost always I have two different pictures of the same thing. I see senior managers praising people who are disrespected by their teams. I see folks who get credited for the work they didn’t do. I see line workers being completely frustrated while their managers are saying these guys are highly motivated. I see managers completely surprised when people suddenly leave while almost everyone saw that coming for past half a year.

    I see it and I don’t get it. All these managers do very little, if anything, to learn a bit about their people but they claim they know everything. I may be wrong but I believe I do much more to learn about my team, yet I still consider I know nothing.

    If one of you guys is reading that, yes, I’m stressed that you might leave. I’m stressed when you get out of the room to pick the phone since definitely it is a headhunter who’s calling. I can’t sleep when you take a single day off since, and I know it for sure, you have an interview. OK, I might have exaggerated a bit. Anyway in terms of my knowledge about my team I know that I know nothing.

    And you know what? If you are a manager you are no better. Because generally speaking we know nothing about our teams. Even if we are friends with our subordinates our professional relationship is much of unknown. With strangers we usually work with it is much, much harder.

    Stop expecting you know oh so much about your people and at least try to talk with them. If you’re lucky you may find a couple of folks who actually are willing to talk with you. Remember though, if you ignore them once or twice they aren’t coming back to you.

    It looks like I have a pretty poor opinion about quality of people management in general. Well, I must admit I do. I would be a hypocrite if I deny it regarding my recent posts on subject:

  • It’s the Transparency, Stupid!

    A boss came to a worker:
    – Would you come to work on weekend to rescue project?
    – And what would be the reward? – asked poor little worker.
    And there was no answer.

    Actually the unspoken answer was “I don’t really know” or “I don’t want to say” or “Don’t mess with me, kid.” Either way it was wrong.

    The worker’s question isn’t a very nice one – personally I prefer working with people who don’t ask for reward before job is done. On the other hand it isn’t unexpected either. As far as you’ve done some extra job and haven’t been rewarded in any way or your so called reward could be interpreted only as an insult you learn to ask before, not after. Every manager should be prepared to hear the question.

    Being prepared here means having an answer and having the one which actually says something specific. Let it be “You’ll get this and that amount of bonus money” or “You’ll have higher engagement rating during next performance review” or “I can do completely nothing for you because I’m a crappy manager but I still ask you to come.” It’s still better than nothing.

    A reason why these are better than those above is simple. They are transparent. You show how things look like. You don’t hide your magic algorithm which is a number of overtime hours multiplied by standard rate multiplied by secret factor of 1,25. This by the way becomes perfectly clear for everyone once they do the basic math. Basically if you as a manager hide something it’s either wrong or it shouldn’t be a concern of a team. Actually the former most of the time. Even when you don’t hide you suck being a manager while you’re trying to be transparent it’s better than trying to play kick-ass boss. Everyone would know you suck anyway but you’d avoid a label of hypocrite at least.

    If something is interesting for the team or a person in the team – say it. An algorithm you use to tell how much bonus money people are going to get? Say it. Rules you use to decide on a promotion? Well, say it. New facts about this huge project you’re trying to get? Guess what. Say it. Unexpected issues with company cash flow which will bring some inconveniences for the team? How about saying it? Be transparent. People will appreciate this even if they won’t say that out loud.

    Being transparent cuts off gossips, increase team’s trust to their manager and helps to spread information among the team. It is good. Do the opposite and you won’t keep your alleged secrets and you won’t control information (and gossip) flow in any way either. Not to mention you’ll be considered as a poor manager by your team. And well, they’ll probably be right this time.