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On my way to work, Ep 4 – Steal those ideas! (and a reading list)

Some books mentioned on this videocast:

Summary:

  • Originality is often praised for its own sake. However, when it comes to things like culture, being original should be treated with caution. Most of the problems you’ve tried to solve have likely been solved somewhere else.
  • Trying to reinvent the wheel for every problem is not the best idea…
  • There’s a danger on the other side: cargo-culting. That’s when you take an idea/practice/etc that you’ve seen done somewhere else and just copy it wholesale without understanding how it works and what makes it tick.
  • Very dangerous for culture stuff, because it looks fake. For example, you might copy 121 meetings – but without understanding why they’re there, people will feel the meetings are just some kind of pointless formality and won’t care.
  • It’s important, when you copy things, to fully understand them, but it’s also important not to let yourself think you can’t copy things.
  • For me, the sources that work the best tends to be books. Here’s a reading list (see above).
  • First, the Semco books. They’re not very well written, but they’re very inspirational, written by Ricardo Semler, CEO of Semco. He tells a lot of stories about what happened, from the trenches.
  • Tony Hsieh’s 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 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.
  • Joy at Work 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.

On my way to work, Ep 3 – Amazon ethics

Today’s rain-drenched thoughts on the topic of this open letter/lawsuit, which was doing the rounds yesterday, and its relation to open cultures.

Note to self: next time have an umbrella, and pay better attention to the framing! On the good side, I now have some lovely shots of my chin, and a wonderful rain-halo effect going as well.

Summary:

  • It’s raining. Really. I was drenched by the time this finished. And there was a cool halo effect.
  • Thoughts on the Amazon announcement…
  • An Amazon employee was mistreated by their manager, had their moved blocked by retroactive “backdated performance feedback”, was seriously penalised for raising important issues about a client being overcharged by hundreds of thousands of dollars.
  • Amazon manager wanted to spin it into a positive, even though the code for the promotion was totally broken.
  • Interesting to me: Amazon is strange to me, because it’s clearly highly successful, but very, very top-down, hierarchical. Every bit of info that comes out shows that Amazon is a company that’s very centralised around Jeff Bezos.
  • So my first thought was: well, this doesn’t surprise me very much! It seems like an inescapable result of a strong, secretive top-down culture that there will be bad top-down decisions hiding stuff.
  • In an open culture, if people make decisions against the values of the company, this is very visible and obvious quite quickly. Either you deal with that decision, work through the problem, or it is obvious that the values are just lip service.
  • In a secretive company like Amazon, it’s very easy to hide things under the carpet, punish people for making information flow. So when there’s a gap between the values of the company and its behaviour, it can just be hidden. The discord does not become widespread in the company. So the values can appear to persist even though they’re not being followed.
  • Obviously this can happen in open cultures too. In AES’s case, for example, they had some ethics/transparency issues with one plant. At a certain scale, this becomes inevitable. But what is not inevitable is how it is covered up. The fact there was buy-in all the way to the top for defrauding a major customer of Amazon, however, would not happen in an open culture.
  • Lack of transparency is always going to lead to this sort of stuff. Having the transparency to prevent this sort of stuff happening will naturally lead to other features of open cultures.

On my way to work, Ep 2 – Why I believe in open cultures

For this second instalment, I explain why I believe in open cultures. It turns out that rather than simply being insane, I actually have a rationale for this belief. Three reasons, in fact.

Sorry about the volume – it’s a bit loud! Will try and put the mic slightly further next time.

Summary:

  • Why is this worth asking? Because you should always understand where your beliefs come from? Where did you get the data? Are the people who gave you that data biased?
  • I can see three main angles/reasons:
  • First one is internal, inside of me: I believe that we should treat each other in this way, with respect, as adults, allowing each other to have responsibility. I fundamentally believe that transparency is a better way of operating than secrecy. I believe this goal is valid in and of itself, regardless of the practical considerations.
  • Secondly: evidence from other businesses. Some people react to open culture concepts with enthusiasm, some with skepticism. Some feel that it just won’t scale, we’ll have to stop at some point. There is, however, a fair amount of evidence of companies that are much larger than GrantTree, operating with open principles: AES, Semco, Valve, Github, Zappos, MorningStar, Buurtzorg, Medium…
  • These businesses are in all sorts of different fields, all sorts of different sizes, implementing open organisations at scale. So feedback that “it just won’t work” can’t be taken at face value.
  • Thirdly: GrantTree itself! I can see what this open culture thing does to people around me. I can see that the continued focus on transparency has had a massive, positive, transformative effect on GrantTree’s culture. It’s kept things moving, progressing all the time, never too static. That’s enabled people to be happier. I can see that for myself, first-hand.
  • With these three angles, you can see where my belief in open cultures comes from: internal belief, external, indirect evidence, and external, direct evidence.

On my way to work, Ep 1 – Huddles

So I thought I might have a go at recording a kind of videocast on my way to work. Let’s call it “On my way to work”, for now1.

The production quality is obviously fairly awful, though the lapel mic seems to be doing a relatively decent job considering the enormous amounts of noise on my current route to work2.

Anyway, the point of this is just to share some thoughts about GrantTree‘s open culture, including features like respect for people and the advice process (and perhaps other topics of interest, like investing), but perhaps in less detail (due to the extreme time constrains: a few minutes a pop). That’s right: with this videocast, you can rely on the broadcast being very short, since I’m lucky enough to live not all that far from work! Let’s see how it goes.

So this is the first one! Enjoy!

If you have any comments and/or thoughts, feel free to let me know by email, on Twitter, or even (shock, horror) in the Youtube comments…

Summary:

  • Today the topic is “huddles”.
  • A huddle is a company-wide meeting where we discuss issues that need input from everybody, a good touch base point for everybody.
  • The idea came from someone on the team last summer (bottom-up) but has persisted for over a year.
  • Huddles happen pretty much every week.
  • Even without an agenda, something of value tends to happen. But it helps to keep things on topic, particularly as the team grows.
  • When someone brings up something that is only of interest to 2-3 people, the discussion should be parked – unless it’s something where everyone needs to be aware of what’s going on.
  • By now, everyone seems to support the huddles and see the value in it, even though it’s a 9am meeting!
  • We put this process in place back when there were 8 people or so in the team, and we noticed there were gaps in what was communicated to the company.
  • The huddle is a kind of addition to company-wide emails, since many people don’t read emails in detail, and emails aren’t interactive.
  • Will this work when there’s 50 of us? We’ll see! Maybe we won’t even have a centralised office by then!

  1. A quick google doesn’t show up any popular results under that title, though I’m sure they exist, it’s not that original!

  2. Worry not, I’m moving this weekend – my new route will be both shorter and quieter!

The advice process – definition and usage tips

One of the immediately interesting ideas I picked up from Reinventing Organizations (and since have discovered in other places, like Joy at Work) is the “Advice Process”. This is a decision model that works very well to replace both the top-down decision model and the consensus-based decision model, both of which have serious flaws in practice and theory both.

So far, we’ve been using the Advice Process at GrantTree for about 3 months now (since August 2014, in case you’re reading this much later), and it’s worked well (with some hiccups around decisions about pay – more on this further down). We’ve learned a few things about how to use it or fail to use it properly, and I thought I’d share these thoughts, three months in. First, though, a bit of background…

How do you end up with the Advice Process?

The advice process is a natural progression from the other two obvious decision models in startups. The default is the top-down model. It’s the dominant decision model in business today and most startups will default towards this unless the subject is given some thought. It can certainly work, and does in fact work for many large companies, but I believe it is inferior to both the consensus model and the advice model.

In the top-down model, decisions are ultimately made at the top of the company (e.g. by the founders and chief executives). Often, a single person has ultimate power to make every decision, and uses it regularly. By default, every important decision must rise to the top. Some less important decisions are delegated, but generally people avoid making decisions without their boss’s approval because they frequently don’t have enough information to make those decisions. This is very typical of closed cultures where secrecy is the norm – and is in fact the only decision model that can work there, since the lack of information sharing makes it a self-fulfilling prophecy that the lower strata simply cannot make the big, important decisions.

Some people are happy with that. Others really hate it. Some, like Tony Hsieh, will rather sell their company than continue working there once they’ve built this sort of culture1. The natural reaction is to say “rather than concentrate all the decision making at the top, let’s distribute decision power; everyone should have a say!” Enter the consensus model.

In the consensus model, everyone agrees before a decision is made. I believe this model is superior to the top-down model, for the simple reason that it engages everyone. It may be less efficient at making decisions, but as part of a culture of involving everyone in running the company (which requires a lot of transparency) it results in far more motivated people and therefore, in my opinion, it is better than the top-down process despite its flaws. What are its flaws? Well, it’s very slow, first of all – getting everyone to agree takes time. It’s also prone to politics – people spending energy building support for their proposals rather than getting things done.

One way to see the consensus model’s failure is that instead of giving everyone the power to make decisions (its intended aim) it gives everyone the power to stop everyone else from making decisions. Ouch.

Enter the advice process.

The Advice Process

Here is the way we defined the advice process within GrantTree:

Anyone can make any decision they feel comfortable making. However, before they make that decision, they must ask those who will be impacted by that decision, and those who are experts on that subject, for advice. They are free to disregard the advice and make the decision the way they wanted to anyway, but they must first ask for advice.

Important: this is about getting feedback/input into your decision, not about building consensus. Do not use the advice process to try and browbeat people into agreement or to build political support for your decision. You don’t need people to agree. You don’t need political support. You just need input to make sure that you make the right decision.

It seems very obvious and elegant in retrospect, and it’s no surprise that many advanced open cultures have evolved similar decision processes in parallel. Lucky for us building companies in 2014, we don’t have to reinvent the wheel: we can just read books and blog posts about it and copy the best ideas!

The core is so simple: if you want to empower people to make decisions, let them make decisions. Boom.

However, in practice, there can be a few snags in the way you implement the advice process. I’ve noticed some, and they are outlined below. Hopefully they’ll help some people.

The right reasons

First of all, in order to work, the advice process must be brought in for the right reasons: i.e., it must be about enabling everyone in the company to make decisions. I’ve observed a case where a partner in a small firm brought in the advice process in order to justify making a decision which everyone else disagreed with. That’s not going to work.

Bring the advice process in to enable people who are already working well together to do so faster. If the consensus process is failing you because there are too many disagreements within the company, the advice process will only cause people to get even more pissed off at each other. Think of the advice process as a speed boost. If you were heading for a wall, you will only smash into it faster.

Advice process for compensation

We trialled this, and whilst I fundamentally believe it can work2, there are a few important caveats which are particularly relevant to startups.

The advice process risks causing conflict when a highly contentious issue is being decided, one where there is very strong, irreconciliable disagreement. For example, if people have taken comparatively low pay because they were joining a startup, and they feel they are significantly underpaid, then allowing them to change their pay via the advice process will set them on a collision course with others who disagree that the company is at a stage where it can afford to pay a market rate, there will be sparks. In theory, the advice process should be able to resolve this… but it is a bit of a test of fire. And most companies don’t have time for that level of conflict.

I would recommend not applying the advice process to compensation until it is generally accepted that most people are paid mostly the right amount, and that there won’t be any proposals to double someone’s salary. At the very least, if you’re going to open that up to the advice process, do it a good many months into the process, at a point where both the advice process and the conflict resolution process (to be discussed in another article) are well bedded in, so this one conflict doesn’t sink the entire advice process endeavour.

Trusting people

As a founder, the hardest thing about the advice process is actually in clearly resolving, within yourself, to actually trust the people you’re delegating that power to.

People can feel if you’re only paying lip service to the advice process, doing it to “empower” people but not actually trusting them with important decisions. When you don’t really trust people, you will end up verifying and vetoing and changing their decisions after the fact. This creates a self-fulfilling prophecy (a perverse version of the Pygmalion Effect). Because people know they’re not really making the decision, they don’t pay attention to it all that much. They’re playing with a safety net, and that safety net is you, the founder. So they make whatever decision they feel like, without thinking too much about it, and let you take responsibility for which decision actually gets implemented.

Needless to say, that doesn’t work. The magic of the advice process is that the person making the decision is entirely responsible for the decision and its outcome. This concentrates the mind, and forces them to really seek out advice and pay attention to it, because ultimately it’s their decision and the company (which hopefully includes people they like to get on with) will have to live with the consequences of that decision.

When people make a decision via the advice process, let them actually make the decision. Trust them. That’s certainly the hardest part of the process as a founder.

Conflicts

Sometimes, nevertheless, there will be decisions that lead to a conflict. To resolve this, you need a well defined conflict resolution process. I’ll cover that in more detail in another post, but here’s an essential point to make here: let the conflict happen (so long as you have a clear process for dealing with it). In particular, don’t try and resolve the conflict ahead of time by undermining the decision process before the decision has even been made. Otherwise, you’re once again taking away responsibility from the person making the decision.

I made an exception at GrantTree for a salary decision conflict that seemed unresolvable – both sides were completely unwilling to budge and, knowing the people involved, I knew they were stubborn enough to drag it out all the way. I’m not yet sure suspending the advice process for compensation was the right decision (time will tell), but what I am sure is that if I suspend the advice process again, people will get the impression that the advice process is only there for unimportant decisions – and that will undermine it, lead to a self-fulfilling prophecy, etc.

Readiness and requirements

Finally, not every company is ready for this process. In particular, the advice process requires:

  • A team that has tried both the top-down and the consensus process and decided that they weren’t good enough, and that is therefore able to appreciate the evolution in the model;3
  • A company culture that is largely transparent – people cannot make good decisions without information, and if the information is locked down, the advice process will naturally be impossible;
  • Founders who are willing to take the big step of trusting people, letting go of control enough to actually implement this process whole-heartedly.

I hope some people who are currently mired in the consensus process read this and find the solution they were looking for. If you have any questions about how that might work, feel free to ask them (email, twitter or otherwise). I’ll do my best to answer.


  1. See the LinkExchange story in Hsieh’s Delivering Happiness.

  2. And, according to Dennis Bakke, it has actually worked in some parts of his company, AES back in the nineties.

  3. Can you skip directly from top-down to advice? Maybe… let me know if you’ve done that! Intuitively, though, I think the evolution might be necessary.

So, I’m an investor now

I guess it had to happen sometime! My first investment, made a month or two ago but kept quiet until now, is SolidLabs, makers of the Primo Playset that had a successful Kickstarter last year. It’s an absolutely awesome project to teach programming to pre-literacy kids via an arduino-based device. Watch the video, it’s really excellent. So I invested in them.1

It’s been interesting and very instructive to find myself on the other side of the figurative table. Except I’m not on the other side. I’m an entrepreneur, running a business that, who knows, may itself take funding at some point. I’m investing largely because I’m lucky enough to be able to, and because I’ve always had a desire to move towards that.

However, there are some interesting lessons at the moment, worth making notes on, if only so I can look back at them later, but also so that they might be helpful to others…

Valuation? We’ve heard of it

Perhaps because I’ve been bathed in the startup world for almost a decade now (since 2007 – almost 8 years), I am (perhaps naively, we’ll see) not that bothered about the valuation. It shouldn’t be something unreasonable, but then that is usually determined by the amount of equity being raised. Every round, from seed to series whatever, should be somewhere between 10% and 30% or thereabouts.

Why am I not bothered about the valuation? Because I understand that many if not most of those businesses will go bust and return nothing, and those that do succeed will hopefully return a sufficient multiple that the initial valuation shouldn’t be a huge factor in there. I am also counting on the fact that other investors, who are putting in more money than me, are investing on a sensible valuation, and I’m investing along with them, so benefitting from their efforts at coming up with a sensible valuation.

Ultimately, I don’t care that much if the investments that work out give a 30x multiple or a 20x multiple, so long as it’s in the tens.

I also don’t care what percentage I end up owning. That’s not what matters for an investment. What I care about is that if I put £10k in, I get a multiple of that out. Whether I turn my £10k into £50k by owning 0.001% or 10% makes little difference. What makes much more difference is how much the business grows.

Quick decisions

One thing I have learned from reading countless articles about investor flaws is not to do the classic thing of dragging out a potential investment for weeks or months. I make up my mind quickly. Investing is not all that far from educated gambling, after all. I draw on my years of experience as an entrepreneur in the startup scene to make a snap judgement, and then do some background research to make sure I’m not being scammed.

I have a budget of a few tens of thousands of pounds to invest each year, that I’ve split into £10k packets which I’m investing in different businesses. I know I’ll lose a lot of it, but the “learning” is hopefully spread and there will perhaps be a winner or two in the lot!

I won’t invest in a field that I know nothing at all about, but “tech startups” covers a fairly broad range of topics. This enables me to make these decisions snappy. If I can’t make a decision quickly, I won’t invest.

Insider information is the killer

Obviously that’s not going to be the case for all of my investments, but where available, insider information is great to have. For example, SolidLabs was also one of GrantTree‘s clients. We wrote about their technology and their business extensively. We know them, over a period of time.

Insider trading is illegal when it comes to public corporations, but it’s perfectly legal when it comes to private investments. In fact, if you’re smart, you’ll want as much insider info as possible, and working directly with a company is the best way to get that.2

I won’t say that working with GrantTree will automatically lead to an investment. It obviously won’t. I also won’t say that it is required for an investment. It probably isn’t (the second investment I’m currently looking at is not a current client). But it sure helps!

Tax incentives help a LOT

I’ve wanted to invest in startups for quite a while, but if I look at the most immediate cause for my investments? The UK tax breaks are just too good.

Get this: with SEIS investments, I get 50% of the invested amount deducted from my income tax liabilities for the year. This means I can pay myself more without paying income tax (I don’t like income tax; do you?). Effectively, my investment is half price, upfront.

That’s not all – if, god forbid, the investment goes sour, I will get a further chunk of tax deductions at that point. It can work out as well as £7.5k of tax breaks for a £10k investment. That means my £10k packet only risks £2.5k, effectively.

Can you beat that? Yes you can. After all this, SEIS also makes the gains capital gains tax-free. So if the investment doesn’t turn sour, and in fact returns, say, a 10x multiple on that £10k, I will get £100k back, tax-free.

That’s tax incentives. And then there’s the government support the UK gives to the companies themselves. With tax credits, the money spent on R&D goes 33% further. So this £2.5k I’ve risked can enable up to £13.3k of investment. Even better if the startup gets a grant, which can be 45-60% match funded. In that case, a £10k investment could net £18.2k of spend, or even up to £25k of effective spend.

So, I risk £2.5k, and the UK government can fill in up to 10x that amount, in the optimal case. Blimey, as they say in the UK.

What next?

I guess I’ll carry on and see what happens. Where possible, I’ll mention my investments here.

 


  1. And if you have young kids, I strongly to buy a set!

  2. The ultimate form of insider trading, of course, is starting your own business. You invest your resources (money and time) with complete knowledge of what’s happening within the company.

How to beat the hedonic treadmill

In geek circles, the hedonic treadmill is a powerful idea with strong roots. The essence of it is that as humans, we are physiologically designed to never be satisfied without more of whatever it is we crave.

In practice, it means that if, for example, you want to “be rich”, and you define that as having a million dollars of yearly disposable income, then by the time you reach that objective, your internal goal posts will have shifted and now you will want two million dollars, or more. The goals perpetually recede in the distance like mirages the closer you get to them.

If your goal is to have three kids, then some time after your third child is born you will start to feel dissatisfied and want something else. If your goal is to run a four minute mile, then once you achieve that objective, you won’t be satisfied until you run a 3 minute 50 mile, and so on forever and ever.

The hedonic treadmill explains why we are so miserable as a species despite living in the most plentiful and wealthy period of human history so far. As comedian Louis CK put it, “everything’s amazing but no one is happy”.

Many discussions of the hedonic treadmill paint it as an unavoidable physiological characteristic of mankind, as ineluctable as death and maybe even taxes. We are human, therefore we always crave more, therefore we can never be satisfied with what we have, we must always have more. The natural conclusion of this line of thinking is to realise that humans can never be happy unless constantly expanding their sphere of influence, and therefore resign ourselves to either a dystopia where most people are dehumanised to strip away this fundamental human need, or a view of humanity as some kind of uncontrolled cancerous growth that will eventually falter and die, perhaps taking its host organism (the Earth) down along with it.

Like most pernicious ideas, the problem with the hedonic treadmill is not that it’s untrue, it’s that it’s only part of the truth.

Everything is amazing

The more complete truth is to recognise that yes, a part of us is wired to seek out objectives and beat them, and in fact that’s a pretty helpful mechanism to use to achieve things (goal-setting techniques abound in personal improvement literature, and for good reason!), but it’s not a helpful mechanism when considering our larger goals in life, and it is by far not the only mechanism available to us.

The brain is a complex organ, and it has many more ways to produce happiness and contentment than just goal-seeking.

For example, one such mechanism that is easily available to all of us and very popular with meditation practitioners is “being present in the moment”. You can try it for yourself right now! After you finish reading this paragraph, take your eyes off the screen, and take three very slow deep breaths, letting the complete reality around you (sights, sounds, smells, etc) sink in, letting your eyes unfocus, letting your senses be overwhelmed by the cacophony of sensory input that surrounds you at any moment. Then, while you’re doing this, try to notice something beautiful amongst this cacophony. It’ll only take thirty seconds. Do it now.

Unless you’re in a truly awful place in your life (which is very unlikely to be the case for anyone reading this article) you will have noticed something beautiful or weird or unique around yourself and taken it in. And as a result, you should feel incrementally happier than you were before you did it. Notice this did not require any goals or achievements, only taking the time to pay attention to the world that surrounds you with beauty at any given moments and noticing something nice. You noticed the water you were blissfully swimming in, chose what to think about instead of being a puppet of your mind, and this had an effect on your sense of contentment.

Boom. Happiness treadmill beaten. Achievement unlocked. What’s the next goal now?

There is no goal, just a practice for the rest of our lives. When we practice this simple, 30-second exercise on a regular basis, we soon find that it gives us more lasting contentment and happiness than any goal can, and does so consistently throughout our life for free, without needing to purchase anything or beat any high score or any other defined goal.

As we internalise that realisation, the hedonic treadmill will lose its effect. The key was in Louis CK’s sketch all along: we merely needed to notice that yes, many things are amazing, and be happy.

A final note

In reading this article, it is easy to misinterpret it and believe that I’m advocating throwing out goals altogether. That is not the case. Goal-setting is extremely useful to get stuff done, to achieve things, to have an impact on the world – and a whole lot of other things you may wish to do (and feeling that we’re living up to our potential to make a positive difference is something that can also create contentment and happiness).

However, the goals are insubstantial, and the problem of the hedonic treadmill arise when you mistake the goal for the activity. If you start going down a ski slope, it is natural to have a goal to get to the bottom. However, if you don’t derive happiness from going down the slope, but only from getting to the end, then you’re missing the point of skiing – and of life.

There are no B players

“Only hire A players! Fire the B players!”

“If you hire B players, then they will hire C players!”

“Over time, the A players will get frustrated with the B players and will leave to go to other companies and you’ll be left only with B and C players, unless you regularly cull B players.”

Hands up if you’ve read this advice before. Keep your hands up if you’ve believed it. I see that’s all of you still. Now keep your hand up if you think you’re a B player, that it’s your nature to be one, that you’ll never be an A player. Oh, where’d all the hands go?

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”

- Albert Einstein (or not)

I was a B player

Once upon a time, I worked for Accenture. I started out fairly motivated, and did some good work (or so it felt) in my first year, and then I got progressively more demotivated. I have no doubt that most of the people I worked with, or at least most of the people who had to rate my performance, rated me as a B player. Not a bad contributor, but not the kind of balls-to-the-walls excellence that they hoped for from a super-keen, motivated Accenture consultant.

I missed two rounds of promotions before I finally left Accenture. In theory this was due to one-off structural stuff happening while I was there (like Accenture taking a $450m write off on the NHS project), but I knew that if I had been rated as one of the top people, they would have figured out a way to promote me even during a promotion freeze (Accenture works like that, with special deals for special people). So I was clearly not at the top. At Accenture, I was a consistent B player.

Even in my two subsequent startups I was a B player. It turns out that I don’t operate at my full potential when I believe someone else will find and fix my mistakes. I play better without a safety net. I also have a burning need to work on stuff that I feel I own completely. The two combined mean that on Vocalix and Woobius, I was working at maybe 10–20% of my capacity at the time (probably less than 5% of my current capacity). I was not in a state of flow. I was easily distracted. I frequently felt demotivated because of what I perceived as unfair ownership/shares split. I still got stuff done, of course, but most people who are not in an absolutely abysmal environment will get shit done.

Long before these events, I was a B player at school, and then at university. I might have been smart, but I never felt like putting in the seemingly unending amounts of largely pointless effort that academic excellence would have required. Add to this that I was undisciplined, didn’t have many friends, and in fact was constantly bullied in my early years of school. For most of school, I was a B player, if not a C player.1

So, shall we consign me to the B-player trash can and forget about this person called “Daniel Tenner”? Or, as my dad suggested, in a skilful reductio ad absurdum, to the headmaster who declared me “unsalvageable” and wanted to expel me, “so do we take him out back and shoot him now?”

People are not cogs

The A/B player mentality comes out of a worldview where people are replaceable cogs in a machine that you’re building to make money. In this context, they are measured mostly by their ability to produce a positive effect on the bottom line. Sure, there may be some qualities or defects that don’t have an immediately apparent effect on profits, but in this worldview, it all comes down to the numbers in the end, to one number in particular: profit.

Within that worldview, the concept of A and B players makes sense. An A player has an outsized positive effect on your profits. A B player has a more moderate positive effect. A C player may have no effect or worse. It stands to reason that the best thing to do in this context is to have only A players: this way you’ll have more revenue, more opportunities being grabbed, and fewer people to share the pot with. If that’s all that matters to you, then please disregard my article: it’s not addressed to you.

If, however, the thought of measuring your entire human output with a single number makes you shudder or at least makes you a little bit uncomfortable, please read on.

Human beings are deep, complex creatures with many subtleties and nuances. They can contribute to a whole variety of endeavours in a whole lot of ways. The key to unlocking this human potential in yourself is to find the stuff you’re good at, that you enjoy doing, and that you think is worth doing to make a positive difference, to find that elusive state of flow where work becomes more like play, where despite dealing with a variety of tasks, some of which may seem boring, you take the time to love what you do and thereby end up doing what you love. When you find that place, you’re an A player.

Everyone seems perfectly willing to accept the above statement when it comes to their own self. Even better, we all breathlessly repeat this pearl of wisdom to friends, family, and sometimes complete strangers that we feel some sympathy towards. We believe in its deeper Truth, on its positive impact on our lives.

And yet when it comes to hiring and firing, we suddenly conclude that some people are hopeless B players to be culled, lest they pollute our precious company by hiring even worse examples of themselves, or setting a low hiring standard for the whole company.

That is elitist crap, merely there as a consequence of a narrow-minded worldview and as an escape hatch to allow us to blame poor performance on other people rather than ourselves. There are no B players, only people whose potential is not being brought to life, fish which are made to climb trees and then told they suck.

A better view of hiring

Pretty much everyone in the world has the potential to make a great contribution to some human endeavour. Sure, some people are cleverer or stronger or faster or more nimble or more diligent or more patient or more helpful or more of a zillion different qualities humans can be evaluated on. However, this contribution is only possible when the said human being is placed in a context that gets the best out of them.

Most of humanity labours in terrible, dehumanising, boring, uninspiring contexts. Too many still are slaves, or toil for survival or safety or comfort rather than for inspiration, fulfilment or any kind of meaningful purpose. That is a tragedy first of all for ourselves as a species, as we miss out on great contributions from billions of people who could give so much more to the world around them. A few of us are lucky to be able to find or fashion an environment which enables us to give our best day after day after day. Calling the latter “A players” and firing the rest is not only callous, it is immensely short-sighted and bone-headed on both a personal, a business, and a societal level.

When it comes to hiring, not everyone is right for your company. Some people will thrive in the open environment we’ve built at GrantTree. Others will excel in a numbers-and-measurements-oriented, strictly hierarchical company. Others yet will thrive in a socially oriented context where they feel part of a family. Others may give their best when surrounded by chaos and relying on themselves alone. To make matters worse, people will shift between these and other categories throughout their life, depending on many factors including personal growth, external demands on their resources, etc. In addition, people have skills, abilities and aspirations that will determine whether there is useful work for them to do within a given company.

Anyone who thrives in the environment you’ve built for your company, and wants and is able to contribute to something important to your company, will be by definition an A player. Your job when recruiting is to find those people who will do well in the environment you’ve built, and who have skills, abilities and aspirations that coincide with the needs of your company. Depending on how different your company is from the norm, there may be no one who fits so well outright. Perhaps they will need some coaching to embrace your unique culture. Perhaps some training to learn the ropes. Your job then becomes to find people with the right potential to thrive in your company, and to coach them and train them and help them to unfold their potential.

Whatever you do, though, don’t make the mistake to think that those who don’t fit your specific environment are unworthy human beings, categorised forever with the “B” brush stroke, unlikely ever to amount to much, and don’t let yourself fall into the trap of thinking you’re better than them. You’re not better, you’re merely in a better place, and with some humility perhaps you will be able to see that your role is not to sort the deserving from the unworthy, but merely to help those whose way you’re lucky to cross to contribute at their best, whether in your company or somewhere else.


  1. My parents would certainly disagree with this assessment, but then, what are parents for if not to provide this unflagging belief in their children’s abilities, that later forms a solid platform for the self-confidence our world requires of us?

Flat hierarchies, mentorship and personal development

I read this article with concern. Dustin Moskovitz, founder of Asana, took issue with Valve’s flat management structure and its lack of coaching:

Almost immediately after, I grasped what they had actually written and my enthusiasm waned. In exchange for freedom, they gave up *personal growth.* I can fully believe that there are people who can survive in such an organization, but I am deeply skeptical that they can thrive and reach their full potential. They are throwing the baby out with the bathwater. They tied one hand behind their back. The juice is not worth the squeeze. Pick your favorite metaphor; the point is this philosophy lacks balance. More importantly, I totally reject the idea that freedom and mentorship have to be mutually exclusive.

Dustin then argues that some kind of people-management is necessary to ensure personal growth, and proposes a few lighter management-that-doesn’t-look-like-management approaches, such as:

An alternative approach to creating structure and order that we employ at Asana is distributed responsibility, exemplified by our AoR (Area of Responsibility) program. Rather than have all decisions flow through the management hierarchy, we have the explicit intention of distributing them as evenly as possible across all employees. Unless we forgot about the existence of an AoR (which does happen) or otherwise make a mistake, the relevant domain owner has the final decision making authority, not their manager. Additionally, we try to promote an understanding of management as an AoR on par with other AoR’s, making the organization feel flatter.

Management still plays a very important role, however, as a backstop for all decisions. If an AoR does not exist or the most relevant decision maker is ambiguous, then decisions do flow through the management hierarchy. In effect, the CEO has the ultimate meta-AoR. In practice, this happens very rarely, but we save ourselves a ton of pain by having clear decision making authority when it does. Another way of putting it is that the managers fill the whitespace of the organization, making sure we have complete coverage. People tend to value that clarity rather than see it as a form of oppression. No one wants to feel like the ship is not being steered and, in my experience, organizations that lack identifiable decision owners tend to end up with more politics than those with traditional structures, rather than less.

Ultimately, each company needs to evolve its own approach to this and other similar culture issues, but my opinion is that going back to having “people managers” and a hierarchy is a clear step backwards. There are other solutions to the problems described by Dustin, that don’t involve setting up an official hierarchy, and I hope Dustin will consider them before letting the Asana ship sail too far in its current direction…

Dynamic hierarchy isn’t bad

First of all, it’s worth clarifying that I’m not opposed to all hierarchy, not at all. As I’ve written before, hierarchy is essential, it’s a natural way that people organise when facing a problem and if you try to make it disappear, you just make it harder to change. What’s problematic is not the existence of hierarchy, but the existence of a static hierarchy that needs to be maintained artificially in the face of changing circumstances.

In one context, one person might be the best leader. In another, it might be some other person. Someone new might join in and be better than someone who was previously in charge of something. If you have a static hierarchy in place, how do you get the new person to take over a role for which they are a better fit?

Unfortunately, a people-management hierarchy, especially one based on mentoring and ultimate decision-making, sounds exactly like the kind of static hierarchy that is very hard to alter and that easily turns into a career ladder. This may work for Asana, but I dislike that instinctively, because I know what those hierarchies end up looking like eventually. Static hierarchies usher in arbitrary decision-making and unfairness, which need to be justified by secrecy, which reduce trust, etc… We’ve been down this road before.

Mentorship and personal development don’t have to come from above

Mentoring people is not something that needs to be done by a boss. There is no need for a mentor to have management or decision power over the person they’re mentoring. In fact, arguably, a mentor who is also your manager is a far less effective mentor.

A mentor is simply someone who can give you advice and help you reflect on what you do in order to accelerate your personal development. Mentoring relationships often do imply some sort of seniority, but seniority does not have to involve management responsibility. I can be senior to one of my colleagues without being their manager.

As for personal development, I think it is ridiculous to imply that personal growth requires a hierarchy. Personal growth is one of our core values at GrantTree and it is doing perfectly well without a static, non-flat hierarchy. Personal growth is about growing who you are, what you’re able to do, your sense of purpose, your sense of achievement. How bizarre that an entrepreneur, who almost by definition is someone who finds personal growth without any management structure around him or her, comes to the conclusion that other people need a manager in order to grow personally?

If anything, traditional management stifles personal growth by imposing boundaries on it. Without reporting lines, everyone is free to grow in the direction in which they feel they wish to grow, and to push themselves as fast as they want with no speed limit.

Conversely, an open culture with a flat hierarchy liberates everyone to grow in whatever direction they feel inclined to, without needing to ask for permission or wait until they’re promoted up the career ladder. Open cultures encourage people to grow at whatever rate they’re comfortable. Combined with a good mentor, this should outperform the hierarchical approach to personal growth consistently.

Decisions don’t have to float upwards

Finally, Dustin also made the point that someone needs to take responsibility for making the decisions, which he feels is not addressed by a flat management structure.

However, built into that statement is the implicit belief that people in general cannot be trusted to take responsibility for the decisions they make. In an open culture, everyone can and does make decisions and takes responsibility for the outcome of those decisions. The presence of a manager who will take responsibility for your decisions is precisely what leads to the infantilisation of employees that then provides evidence that of course, people can’t be trusted to take responsibility for their actions, etc.

If it begins without trust, it is unlikely to end up with an open culture. I see this assertion that decision-power lines of responsibility are necessary as a big warning sign about Asana’s culture and its future.

A conclusion

I’m not saying that Dustin is necessarily wrong with his assertions. They may be correct in the environment of Asana. However, the dismissal of flat hierarchies as incompatible with mentorship and personal growth are flat-out (!) wrong, and doing so based on a quick extrapolation of an “employee handbook” which clearly gives only a very partial picture of life at Valve seems quite unfair (practically a straw man argument). At least, before making this point, Dustin should have contacted some current or former Valve employees to ask how things work in practice.

My main concern after reading this article, however, is that although Asana seems to have started with an open culture, it is adopting closed solutions to problems instead of doing the hard work of finding open solutions. Eventually, this is likely to erode trust and lead Asana to becoming a culture just like very other top-down, hierarchical closed culture. That seems like a shame, since Dustin appears to want to do the right thing in other areas of the business.

Millenials: not working for money

“Almost two-thirds (64 percent) of millennials said they would rather make $40,000 a year at a job they love than $100,000 a year at a job they think is boring,” the Brookings Institution recently noted in a report by Morley Winograd and Michael Hais titled “How Millennials Could Upend Wall Street and Corporate America.”

Given this, if your culture’s main lever for retention or recruitment is money (which is the traditional approach in closed cultures), you’re in for a rough few decades.

Open cultures typically have more ways of motivating people, and so they’re ideally positioned to appeal to the millennial generation: purpose, freedom, self-fulfilment – and paradoxically, those are much better motivators even for those who also want money.

 

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