Open Cultures

When you get started down the open culture path, you will be tempted to give up. In fact, this will happen over and over along the way, many, many times. Open cultures are hard. They’re not immediately intuitive, and they’re likely not comparable to any of the companies you’ve worked in before. Not only that, but open cultures cause endless problems: issues that would normally remain hidden under the surface for months (eventually resulting in people quitting) tend to rapidly bubble to the surface in a transparent culture. This is good, because then you can solve them, but it’s also bad, because you feel like there are constantly new problems arising.

Knowing that there are other companies doing this, and being able to steal ideas from them, is invaluable in this journey. Here’s a bunch of resources about and from GrantTree and other companies, that hopefully will aid you on this journey. Though while attempting to steal ideas, it’s worth remembering that there are no silver bullets: the journey is the destination, when you’re trying to create an open culture that knows how to rapidly adapt and learn.

Articles

Company culture: an open and shut model : An overview of open versus closed company culture models, and the differences between them.
You can’t hide from yourself: What makes the most difference to the kind of culture you build? Who you are. Which is why the best way to improve the culture at your company is to improve yourself.
There are no B players: The concept of “B player” is very popular, but can be very damaging. Here are some thoughts on why the concept breaks down, particularly in open cultures.
How to open up your company culture in the early days: A solid look at some things you can do in the early days of a company to help open things up.
The Advice Process – definition and usage tips: How does your company make decisions? Closed cultures usually operate top-down, with hierarchical decision-making. The next level is to make decisions by consensus, but that is often slow and political. What else can be done? Enter the Advice Process, used by many open cultures. But it’s nothing new: it’s the process you’re using to make decisions every day, scaled up to a company. See also: An update on the advice process, written 1.5 years later.
Fake Transparency: Many companies claim to be transparent but aren’t. One of the most common places for secrecy to build up is in the compensation system. Even when companies claim to have transparent compensation, though, they frequently do not.
Values show up at the extremities: How do you find out what your values are? This article argues that you only truly find this out when they are tested. Failing the test too often might be avoided by recognising some common shapes the foe takes.
How to build a transparent company the Buffer way: Leo Widrich from Buffer shares some concrete steps to help your company culture to open up.
Is radical transparency only for young and idealistic founders? Following Betteridge’s law of headlines, the answer’s no, but you may wish to read the reasoning as to why, if you’re still in doubt.
Why transparent salaries make sense: There are a lot of benefits to radical transparency, beginning with the company’s financial information. This article discusses some of those benefits.
Developing a good culture takes constant vigilance: Bad culture is the default unless you pay attention. As a founder, a bad culture could be a tragic enough flaw to make you quit your own company, so pay attention.
Inside Github’s super-lean management strategy: A very detailed look inside Github’s open allocation implementation. A very detailed article that is full of interesting ideas about how Github’s open culture functions.
Why you should care about Holacracy: Adam Pisoni, cofounder of Yammer and Responsive.org, explains why systems like Holacracy make sense, and how and why it might work in practice.
The Responsive.org manifesto: another explanation of the principles of open cultures, outlined by a company whose purpose it is to help companies become more open.
Why an open salary policy always beats secrecy: Dane Atkinson, CEO of SumAll, providing further arguments for open salary policies.
Culture must be grown step by step: It’s tempting to look at things like Holacracy or open allocation or other ideas and imagine that these are great silver bullets that will solve all your culture woes. As I argue in this article, that’s not really the case. The ideas and tools are essential to help you along the journey, but constant experimentation will never end, because becoming a culture that’s constantly adapting and learning and changing is the goal of open cultures.
Evolving purpose: A GrantTree story: Purpose is a central part of open cultures. It’s easy to fall for the misconception that every company started with whatever purpose it has today. That may be so for some companies, but it’s certainly not true for all. This article is an honest look at the journey that I went through in evolving GrantTree’s purpose.
Zappos’s struggles with the shift to Holacracy: Interesting to read the memo from Tony Hsieh, and to see how this unfolds. Also included in the email are a couple of great articles from Frédéric Laloux (author of Reinventing Organizations) and Doug Kirkpatrick (of Morning Star, an open company covered in Reinventing Organizations).
First, let’s fire all the managers: A fairly deep look at how MorningStar has implemented open culture principles. For more detail on this, check out the book Reinventing Organizations, further below.
But how big are you? Eventually in any conversation about open cultures, someone will use the argument “well, you can get away with it now but it won’t scale”. Here’s an answer to that.
Nonviolent Communication: Communication skills are an essential building block of open cultures. This blog post is certainly not a complete summary, but it can offer a taster in the topic to those who haven’t gotten round to reading the book yet.
Complex Creatures at Work: My exploration of retaining ambiguity in the working world, and the work benefits of doing so.
Graceful Departures: So many companies mess up the process of people leaving. Some thoughts around how to do it better in an open way.
Bosses, Managers and Leaders: A very important disambiguation to avoid falling into one of the traps that GrantTree fell into in its early days (and is still working hard to get out of!).
What makes a good holacracy proposal: What it says on the tin! There’ll be more of these articles about how to do holacracy.

Examples of open cultures

GrantTree itself, of course, I consider to be open. We’re currently 40 strong, with just over £5m turnover last year, aiming at £6m this year.
Buffer is another well-known example. Here’s their mind-blowing transparency page. They are currently 30-strong, with about $5.5m of yearly revenues and growing.
Stripe: I don’t know that much about the culture at stripe first-hand, but based on articles like this one by Alex MacCaw, it seems to have radical transparency, open allocation, and manager-less self-management, all core features of an open culture. Stripe has raised $200m and is an international company with at least 189 employees according to their about page.
Valve: Valve’s culture is mostly famous (culture-wise) via their Valve Employee Handbook (on matters other than culture, they are famous for creating Half-Life, Steam, and a bunch of other awesome gaming stuff), and there a number of articles about it, but I have no direct insight into how it actually runs, other than that it seems to have Open Allocation. If there are any recent, first-hand reports, please send them my way! Valve is a multi-billion dollar company.
Zappos: Founded by Tony Hsieh, who wrote about the culture in Delivering Happiness (see books section), Zappos is world-renowned for their amazing culture, and after being acquired by Amazon, they adopted Holacracy – a well-known open company model that implements self-management and relies on things like transparency to work. Zappos sold for a billion dollars.
Medium: Founded by Twitter cofounder Ev Williams, Medium is another adopter of Holacracy. Medium has raised $25m of funding.
Morning Star Co: People might point to this list and claim this only works for tech startups. Morning Star is a tomato paste processing 40% of the tomato paste in the US, with industrial sales of $350m. This is not a disorganised, chaotic company, yet they too have implemented things like self-management and even (I found out in an email discussion with one of their team) open allocation. The next time someone tells you a process-based company cannot implement open allocation or self-management, point them to this example!
Semco: I’ll be honest: I have no idea how Semco runs now. In fact, I don’t even know what “Semco” refers to – it seems to refer to a collage of companies that do things from payroll management to industrial equipment and cooling systems. But based on Ricardo Semler’s books, it seems likely that all of those are being run with very open cultures. Here is Ricardo Semler’s TED talk about running a company with no rules.
Transferwise: Based on this blog post, it appears Transferwise have at the very least implemented self-management. To make this work, they likely have a high level of transparency.
Undercurrent: As a consulting company that teaches other companies how to adopt holacracy and similar principles, Undercurrent likely practices what they preach.
W L Gore: W. L. Gore, a chemical manufacturing company best known for its Gore-Tex fabrics, has been operating on self-organizing principles since its founding in the late 1950s.
Whole Foods: Whole Foods, with its 60,000 employees and $9 billion in revenue, operates its more than 300 stores with self-governing units (the rest of the organization has more traditional hierarchical structures). Each store consists of roughly eight self-managing units, such as produce, seafood, and check-out (central services are run with a traditional, albeit empowered hierarchy).
The Orpheus Chamber Orchestra: The Orpheus Chamber Orchestra has operated since its founding in 1972 on entirely self-managing principles. The orchestra, with residence in New York’s Carnegie Hall, has earned rave reviews and is widely regarded as one of the world’s great orchestras. It operates without a conductor. Musicians from the orchestra make all artistic decisions, from choosing the repertoire to deciding how a piece ought to be played. They decide who to recruit, where to play, and with whom to collaborate.
Your company? Are there other companies I should be listing here? Let me know!

The next time someone tells you “but this transparency stuff clearly won’t scale to when you’re bigger”, point them to this list!

Books

There are a few key books that I’ve found helpful. In suggested reading order:

Maverick! and The Seven-Day Weekend by Ricardo Semler, CEO of Semco – The Semco books are not very well written from a literary perspective, but they are a fantastic read, a gold mine of stories from someone who built a world-class open culture in the most unlikely place: the heavy-duty manufacturing industry in Brazil in the 80s. The second book is an update written in 2004, which continues Ricardo’s thoughts on culture. A great read to get inside the mine of a true pioneer.
Delivering Happiness by Tony Hsieh, Founder of LinkExchange and CEO of Zappos. This book is very different, more startuppy, but written by someone who first built a business where he didn’t pay attention to culture, then realised he really cared about culture, then built a whole new business all around culture.
Reinventing Organizations by Frédéric Laloux. This book is interesting because first of all it lays out a framework that can be used to talk about open organisations (fairly useful), but also looks at a dozen open organisations and extracts best practices from them. It’s a gold mine for copying, full of ideas to steal. Once you’ve read the previous books and got yourself motivated to go for open cultures, this book is a must-read. We have bought over 20 copies of it at the office, to hand out either inside the company or outside.
Joy at Work by Dennis Bakke, Founder/CEO of AES. This is also a CEO first-hand account, of one of the case studies in Reinventing Organizations. An in-depth, first-person view of one of the orgs covered, gives you a better perspective on the book.
Birth of the Chaordic Age by Dee Hock, Founder/CEO of VISA International. I didn’t think a credit card organisation would be somewhere where organisational innovation could be found, but it turns out that it is very much the case. VISA was not just any company (at least back in its early days – it has since succumbed to “orange creep”), it was a voluntary member organisation comprising 22,000 banks around the world and somehow achieving collaboration between all these competitors. This unique challenge was reflected also in its internal non-violent, non-coercive organisation. Dee Hock shares a lifetime of thinking on the topic of what he calls “chaordic” organisations, which are basically advanced open culture organisations. It’s a delightful read, and full of wisdom accumulated through decades of open culture work.
An Everyone Culture by Robert Kegan and Lisa Laskow Lahey. In a similar veign as Reinventing Organisations, this is a book written by academic researchers (and not just any academics… Robert Kegan himself!) about so-called “Deliberately Developmental Organisations”, DDOs for short – organisations that are deliberately structured to encourage and even demand personal growth from their people. This book presents a compelling and very clear picture, and a whole menu of possible tools and techniques that you might choose to adapt to your organisation.

You’ll notice 5 out of those 7 books are first-hand accounts by founders and CEOs. The fourth one (Reinventing Organizations) spends most of the book’s bulk discussing best practices extracted from companies that are operating in this way. This is important: always be very cautious about applying theoretical frameworks about culture… there are too many social architecture astronauts out there. Learn from those who have done it themselves.

There’s a seventh book that I’d definitely recommend, a bit of an outlier, as it’s not specifically about open cultures, but extremely helpful:

Nonviolent Communication by Marshall B. Rosenberg. A lot of the issues you’ll encounter when building an open culture are around communications. Whether it’s conflict resolution or just reducing conflict creation, the method presenting in this book will help with it. Learning to express ourselves in clear, assertive, but non-aggressive ways, and, conversely, learning to listen to other people expressing themselves and understand the core message they’re trying to convey (rather than just the words they’re using, which might be misleading) is an essential skill in the open culture, and a superpower in most of life. This book promises to deliver an approach to do this repeatably in all sorts of circumstances and, in my opinion, it delivers. A must-read for people who want to operate at their best in open cultures.