Somehow I forgot to hit upload yesterday, so this is a day old. And today, after the Badminton yesterday, I had no energy to have any thoughts this morning, other than how much my muscles hurt! So nothing for today.
- Shares are an interesting thing. In the startup scene, it’s tempting to always give out shares to employees. In Silicon Valley, for example, you probably can’t get away with running a startup and not giving shares.
- It’s important not to just copy this model and apply it outside. In SV, people have a clear understanding and belief that the business could be worth a billion dollars, and they feel motivated to work towards that objective and “get rich”. And there’s a chance they might be right.
- Outside of SV, the thinking is that you want to make people feel empowered, that they’re owners of the business, etc. If they’re deep in the startup scene that may well work, though if they’re smart and skeptical they will see that the chances that this works are very slim. People will naturally be more skeptical of that “dream”.
- So the goal of making people feel like they’re owners of the business is not so clearly achieved by giving out shares.
- I’ve asked people at events, would they feel they’re owners of the business with 0.1% of the business? No one raised their hand. Same for 1%, 5%, 10%… it’s only at 20% that people start to feel they “own” the business. You can’t afford many employees at that rate!
- Shares are treated as a shortcut to make people think they own the business, but doesn’t really work outside of SV.
- But there are other methods. You can make people feel that they are in control of the business, that they are able to make decisions, etc, without giving them shares.
- Instead of using the shares shortcut, focus on learning to build a company where people really do feel that it’s their business, via transparency, responsibility, open cultures, etc, then the shares can be a validation of that.
A very short episode, today, but the topic is not unimportant.
- When it comes to culture, it’s always possible to make excuses.
- Like dieting, you can always find reasons to do or not to do something, research going both ways.
- Much of it is driven by beliefs, but even the data can go both ways (see Douglas McGregor Theory X and Theory Y1).
- So the most important factor in driving your culture is who you are and how much you grow personally.
- Examples of excuses: transparency. There are many companies operating with total salary transparency. And yet despite that you will find very well meaning, experienced, connected, respectable people to tell you that it can’t possibly work, you’ll have trouble with it, etc.
- The only way to get past all these people telling you what you’re doing is wrong, is to actually believe in the things you want to do, and give them a try anyway.
- If you don’t believe in open culture, transparency, etc, you will find an endless series of excuses for why it can’t be implemented.
- It takes a fairly large amount of self-belief to ignore these excuses and power on. For that to work, you have to actually believe in what you’re preaching.
In which I examine the different places where you can get advice about culture, and how they compare. Note to self: be more upbeat/energetic. May involve additional coffee, or perhaps transcranial Direct Current Stimulation.
The book mentioned in this episode is:
Some books mentioned on this videocast:
- 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.
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.
- 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.
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.
- 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.