Leaving the scores aside, what about the comments? Feedback on the evaluation process suggests a mixed reaction. On the whole positive – the evaluation process provides a platform for receiving (hopefully) constructive criticism or compliments. However, the comments were mostly about how the person works rather than about the work; as a result, the comments could get personal – which could be dangerous.
We need to find a way to encourage comments to be less personal and more related to tasks undertaken etc. However, this is difficult as by doing so it will become clear who made the comment and the advantage of anonymity is lost.
Finally, what about the self-evaluation comments made by each person? No idea. These have been made anonymously, so only the HR Director and the person who made them have access to these. But hopefully they will be helpful in quarterly reviews.
We clearly have some improvements to make to this evaluation process. Not everybody will be happy with the process, but hopefully we will begin to see its value and it will provide a useful mechanism for peer feedback.
Footnote 1: After a few evaluations, we suggested that comments should be made with an owner. However, we left an option for comments to be made anonymously if required. We also decided that comments would be reviewed by the HR Director prior to distribution to allow for context to be added where required.
Footnote 2: My scores have continued to fall.
G)
THE FIRST CHOSEN SALARIES – (WEEK 22)
With existing salaries transparent and each person provided with their evaluation results, details of comparable salaries, profit and investment statements for the company, it’s now up to each person to decide their salary.
One of the adjustments that we said that everybody could make this time only was to move some of their previous bonuses into salary. This was important as some of the longer-term employees had a very low base salary, but high bonus each month.
So, what happened?
Not much.
A few people changed their entire bonus to salary. In line with the advisory process, our HR Director suggested that they may want to think whether to move some rather than all of the bonus as it would be out of line with their colleagues – some took the suggestion, some didn’t. A few people increased their salary.
After making the new salaries transparent, a few people commented on some of the rises and life goes on as before.
Or does it?
The problem with being a CEO is that there is a tendency for people to tell you only what you want to hear. Perhaps some souls are more troubled than it appears about the evaluation and salary process. However, transparent salaries are vital to allow self-management to flourish – so for now I have to assume the best.
Either way, implementing our version of self-management is going to be a constant evolution – there certainly won’t be a point at which point we can say “Right, done that. What’s next?”
Footnote: One of the issues with fixed salaries is that there is no mechanism to provide one-off bonuses. This can mean that salaries are often increased to deal with a one-off result. I intend to add a structure where people can choose to pay themselves or a group of people a one-off bonus once a quarter if they have done something to generate a substantially higher profit for the company.
H)
TEAL TO WEIRD AND ON – (WEEK 26)
When we first started Pod Group’s change, I had no idea how long the process would take.
And I still don’t.
As mentioned earlier, the inspiration for the change to self-management was Ricardo Semler. Many of the examples of what we could do came from Frederic Laloux’s book Reinventing Organisations and his emphasis on ‘Teal’ organisations. However, we realised (as should any organisation) that we needed our own methodology, which we built around the characteristics of WEIRD (Wisdom, Emotional Intelligence, Initiative, Responsibility and (self) Development).
We will be evolving constantly as new employees join, as market pressures exert their force, as profits rise and fall and as new ideas are implemented.
However, in an organisation of around 50 people, with a reasonably forward-thinking workforce, six to twelve months seems like a good goal for implementing the main principles set out in our WEIRD 1.0 process. I originally thought this would be done in a couple of months but had to re-evaluate once I realised that people needed time to get comfortable with the idea.
The hardest part was, and still is, getting people interested in the finances of the company and willing to say, “this is relevant to me”. I see progress, but I know that we still have a long way to go before I can extract opinions on the financial state of the company from everybody. Only when everybody understands and thinks that they have a direct influence on the financials of the company will I say that we are truly a WEIRD organisation.
However, we have started our own journey and our version of WEIRD will be exactly that – ours. Others need to follow their particular journey as there is no prescriptive formula for the future.
The next step of our journey (WEIRD 2.0) is covered in the next chapter.
9. ACTING WEIRD
“However beautiful the strategy, you should occasionally look at the results”
Sir Winston Churchill
A)
POD AND WEIRD
“If you’re always trying to be normal, you will never know how amazing you can be.”
Maya Angelou – American poet
Our WEIRD journey is exactly that – a journey. What started off as a vague goal to make the use of each unique brain within the company has now become a way of working (and perhaps a way of living) for us. WEIRD is not for everyone, and those who like to micro-manage and be micro-managed have a hard time adjusting to it.
It is impossible to predict the best time to push change and when to wait until everybody has digested the concept. As a result, there are no hard and fast rules on how and when to implement WEIRD practices. This can result in frustration for employees, especially those that are used to planning everything.
Self-management along the lines of WEIRD is not going to work for the majority of companies. Unless it is implemented in full, self-management is a dangerous can of worms to open. Giving people the illusion of self-management whilst not allowing it in reality will only lead to frustration and disappointment and eventually to the departure of good employees.
However, for us it has been an exciting journey. From an initial idea backed up by researching what other companies have undertaken, it took a while for everybody to see the possibilities. There followed three months of discussions and pain to reach a point where each employee felt comfortable, another month agreeing on how WEIRD would work for our company and a further two months implementing the first changes.
That was WEIRD 1.0. After this, although we had the tools in place to encourage WEIRD practices, we weren’t really working in a WEIRD way as we still had departments and department heads to whom people tended to turn rather than take decisions themselves. It took another year of encouraging employees to take their own decisions before it became clear to everybody that our structure was limiting our decision-making practices (which made it easier to justify the need for further change).
Hence, we started to implement WEIRD 2.0, whereby projects, products or markets replace departments. We have deliberately avoided confining ourselves to just one of these words as we don’t want to limit what any employee wants to change or start (‘units’ is the nearest catch-all we have got to).
So, each ‘unit’ is either a part of our core product that we have split up into smaller parts to target different geographical and vertical markets, or a project.
Each of these ‘units’ has been suggested by an employee who has taken the coordination role. At any point, any employee can suggest the need to make a new ‘unit’. The coordinators then ask for volunteers to join the ‘unit’, thus making multi-disciplinary teams. These volunteers are free to move in and out of ‘units’ acco
rding to the expertise mix required. If there are no volunteers for a new ‘unit’ – then clearly others do not see the need for it and it will die a natural death or be revitalised at another time.
To help employees decide whether they think a ‘unit’ is worthwhile and therefore worth joining, we have created a template (mini-business plan) that each coordinator needs to fill in at the time of suggesting the ‘unit’. This details the work required, how it will be divided, the resources and tools required and, most importantly, the budget and forecasts. Until the ‘unit’ is resourced with the required expertise (ie those with the relevant experience have volunteered or resources have been sourced externally), the budget will not be allocated.
With WEIRD 2.0, we have made a major structural change to create an environment that allows employees to feel in control of their working lives. Thereafter, it is necessary to watch carefully that bureaucratic processes don’t slip back in.
This happened at AES, which had a self-managing organisation of over 40,000 employees running energy plants worldwide. Decisions were made at a local level every day and employees undertook multiple roles – and it was a stunningly successful company. However, with the introduction of a new CEO in 2011, the company decided that they would save money by centralising many activities at head office. A cursory look at the company’s revenue, profit and share price before and after this change suggests that reverting to a hierarchical structure hasn’t worked so well for AES.
To avoid this within our company, I have set a clear question for myself: as CEO, do I have any more power than anybody else to make a decision? Whilst the ‘units’ that I volunteer to join may be of a more general nature than some others, in terms of decision-making, I have to follow the same process as others and cannot overrule others just because I think something is a bad idea.
Every now and then I overstep the mark, but I am pleased that my colleagues now tell me when I am doing so, and I step back.
I enjoy working for the company more than I ever have; I see more potential for the company than ever and I know that my colleagues will do their best for themselves and therefore for the company. Most of all, I have shared the responsibility of the company with my colleagues and thus feel part of a team rather than fulfilling the isolated role of a traditional CEO. Finally, I have stopped trying to be the hardest working hero and have realised that I cannot control everything. I get to spend more time with my family and have a much better work-life balance. I highly recommend it.
Through the course of our change to WEIRD, we have focused on some of the ‘soft’ factors required to build a company that we are happy to work within. The first of these is to be authentic – for people to feel that they can manage themselves, they need to know the nature of the organisation that they represent.
B)
AUTHENTICALLY WEIRD
“Be yourself, everyone else is taken.”
Oscar Wilde – writer
Start-up companies often slip into the trap of trying to convey an image of a reliable company that won’t be disappearing tomorrow - pretending to be larger than they are.
We have made the same mistake in the past, but I now realise that our most loyal customers don’t stay with us because we have been around for nearly twenty years – but because they like what we do.
Until recently we included mission and vision statements on our website. These were lofty ideas of what we wanted to do for our customers and within our industry. However, they did not reflect what our employees wanted from work and didn’t feel authentic. As a result, we removed them and now explain who we are and the values that are important to us as a team. If a customer understands our business philosophy, then great – if not, I would question whether they will understand or appreciate the service and experience that we want to give.
So how does a company be authentic? Employees must be encouraged to be themselves at work. The easiest way to encourage this is, as always, for the CEO to set an example.
Unfortunately (for the CEO), this requires opening up probably more than most CEOs would be comfortable with. CEOs are meant to have answers and make the right decisions. Being authentic includes admitting when you don’t know the answer, which is surprisingly liberating. One of the roles of the CEO is to keep spirits up when things are not going well. However, this can easily slip into making overly positive statements which may reflect a best-case, rather than realistic, likelihood and come back to haunt the CEO as employees question whether statements can be relied upon going forward.
If you do get it wrong – it is better to admit it. Last year, I wasn’t convinced that a new Business Development recruit was sufficiently experienced to be working with some of our existing customers. I was corrected by her colleagues and watched her in action thereafter. I was clearly wrong and apologised that I had doubted her earlier. She was surprised because she had never previously had a boss who would have admitted to such a mistake. By admitting I was wrong, I hoped that she understood that authenticity was more important than pride – and despite coming from a sales background, I have subsequently heard her admitting to customers that she doesn’t know the answer to their question – thus portraying an image of authenticity to our customers.
For other people to appreciate authenticity, it is necessary to be consistent, not withholding information some of the time and being transparent at others. This gives the impression that information is being disclosed selectively. People are naturally suspicious of those that hold economic power over them – therefore being honest and consistent is vital. The easiest way to do this is to focus on the small things; be consistent with these, and employees will give their trust on the larger issues.
As an Englishman, it is part of my heritage to be self-deprecating. Again, so long as it is authentic and not an act, not taking yourself too seriously and not practising self-promotion are useful skills. Each individual should be respected for who they are, not for who they think they ought to be.
So apart from setting an example, how else can CEOs promote authenticity within a company? The easiest way is to hire authentic people. I was reading about one CEO who focuses on hiring nice people. His point was that they will be kind to your customers, who reward them with their loyalty. ‘Nice’ does not necessarily reflect authenticity – but it is a good start.
The next challenge is to impart a company’s authenticity to the outside world. The telling of stories is a powerful method of building empathy with customers (and employees). With the amount of data fired at us every day, we are naturally sceptical. As a result, we are unlikely to view advertising positively but may be more open towards a company with a story that resonates with us. However, this needs to reflect the values of the organisation. Buffer sells a story of a transparent company that can be trusted. A cursory glance at their website tells you this is authentic – its salaries are public and available for anyone to see. The way in which they price their products and the code they use are on their website – even the books that Buffer employees are reading. For developers who value open source code and communities, for marketing people who like to know how their money is spent, for workers who long for transparency and honesty around salaries – Buffer is an organisation where they feel there are shared values. Hence consumers are willing to pay for the services that Buffer offers.
Authenticity requires listening to, and understanding, the needs of employees, suppliers and customers. However, luck can always play a part.
So can you prepare for good, or bad, luck?
C)
LUCK AND PREPARATION
“Luck is what happens when preparation meets opportunity.”
Seneca – Roman Philosopher
Richard Wiseman, a professor of psychology at Hertfordshire University and bestselling author, has spent many years evaluating the role of luck in people’s lives. In one experiment, he compared those who described themselves as lucky to those who thought of themselves as unlucky. Both groups were asked to count the n
umber of photographs in a newspaper. However, on page 2 in bold letters was written “Stop counting – there are 43 photographs in this newspaper.” What Wiseman found was that those who described themselves as lucky were far more likely to find this message.[cvi]
After many such experiments Wiseman concluded that luck comes down to attitude. ‘Lucky’ people are more open, which leads them to grab opportunities when they arise and not get stuck when a setback hits. Contrarily, negative people create a self-fulfilling prophecy where negativity (and lack of openness) ensures that luck passes them by. This is especially true in regard to business networking – which is where a chance encounter can create business opportunities that can occasionally propel any company beyond even an optimist entrepreneur’s wildest dreams.
In his book The Virgin Way, Richard Branson describes how Virgin Records’ first album release - Tubular Bells by Mike Oldfield (which eventually went on to become the third biggest selling album in the 1970s) gave a kick-start to the Virgin Group. So why was Richard Branson lucky? He was trying to persuade the head of Atlantic Records to release the album in the United States. One day the movie director William Friedkin walked into Atlantic Records looking for some backing music for his new film – and Tubular Bells was playing. Friedkin used parts of the album for his film The Exorcist – one of the biggest box office hits of the time. Interestingly, Branson dismisses this as ‘luck’, but instead hints at his tenacity.
However, tenacity isn’t everything. Being born in the right country is a good start – unsurprisingly half of the difference in income worldwide is dependent on where you live. But even your name can have an influence. If you want to be an academic, a surname that starts with a letter earlier in the alphabet is more likely to result in tenure. Likewise, people with easy to pronounce names are judged more positively than those with complicated surnames. And what about the month of birth? The number of CEOs born in June and July is smaller than those born in other months. Having been born in July with a complicated surname near the end of the alphabet, I am clearly born to be weird.[cvii]
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