Tom Nixon

Why democratic decisions are slower but faster

Last week I was given a proper dressing down by some members of our team for making a particular decision in an undemocratic way. This decision would have affected how some of the team worked, but because a quick decision was needed I pressed ahead without spending much time talking it through with them first. Cue a flood of emails from the team, and some rapid back-pedaling and apologising from me.

A quick decision is only any use if it's executed quickly as well. And that's where democratic decisions can outperform command and control. It takes longer to make the decision because of the time invested in consulting, discussing, and perhaps voting. But once the decision has been made, it will be more readily accepted, better understood, and more thought-through. And that leads to better results, faster. It also avoids the fear, uncertainty and doubt than naturally arises when decisions are passed on without the people affected having a chance to raise their concerns and provide input.

In the end, we made a collective decision as a team to go ahead with my proposal, but having  discussed the team's concerns we expanded it and came up with a solution that will be better for them, and a better decision for the company too.

So a lesson learnt. Even when the pressure is on, it pays to hold true to democratic principles.

NixonMcInnes on the Worldblu list of most democratic workplaces in the world

We just announced on the NixonMcInnes blog that we've been accepted onto the Worldblu list of most democratic workplaces. Really chuffed and excited. Head on over there to get the full story.

Democracy, Design, and the Future of Work

I was excited to find Traci Fenton from Worldblu on the speaker line-up at SXSW. Traci’s an expert on democratic organisations. NixonMcInnes applied to be on the Worldblu list of the most democratic companies in the world - to be announced next month. Here are my notes from her presentation.

Traci graduated from college 12 years ago. Got first job in a Fortune 500 company and was really excited. On day 1, she walked in and realised she was a cog in a machine. ‘Shut up and do as you’re told’ culture. Realised that wasn’t how she wanted to spend the rest of her work life.

3 years ago had idea to create a list of world’s most democratic companies. Travelled the world trying to find organisational democracy and understand how it works. Advised that people might not care or pay attention to the list. But it has been written about in Wall St Journal, BBC etc etc.

People picked up on the story because it’s an idea that’s time has come.

Companies range from small biz to Fortune 500.

Things that CEOs say about running democratic companies: Helps us to be more customer-focused; give better service; motivates and makes employees happier.

What is democracy? Run a company based on Freedom and possibility, not command and control. It’s not about voting on everything, but about everyone having a voice.

The decision-making process can be slower in democratic companies, but the execution is faster because people are bought into the decision.

Command and control has the adult/child dynamic. Democratic is less hierarchical. Flatter.

Command and control worked well in the industrial age. We’re now in the information age / democratic age.

Gallup has an annual poll – 73% of people are disengaged at work. This is a symptom of command and control. Disengaged means either doing a job, but minimum effort or even actively disengaged – deliberately sabotaging the company.

Why is organisational democracy so relevant now? Incoming generation X and Y expect it; decentralisation of communication structures in the wider world; company loyalty on the decline – free agency is rising; people don’t trust big old institutions.

Is your company designed for the democratic age? 10 principles from a decade of research. It’s about making these principles work for YOUR particular organisation.

1.    Purpose and vision. Higher level than mission. Must be defined and well understood.
2.    Transparency (over information etc)
3.    Dialogue (not monologue from management)
4.    Fairness and dignity. Not sameness. No abuse of rank.
5.    Accountability. The backbone of democracy. Often if democracy fails, it’s because accountability isn’t there.
6.    Individual and the collective. You shouldn’t have to ‘check your individuality at the door’
7.    Choice. Flexibility of work hours, how to be paid etc.
8.    Integrity.
9.    Decentralisation of leadership, power, decision-making.
10.    Reflection and evaluation.

All 10 have to be in place to create democracy – it’s not pick-n-mix.

A story from a democratic company: Semco: used to be command and control. On verge of bankruptcy in 1980. Taken over by son of founder, Ricardo Semler at age 21 and continued to run in command and control style. At 25 became ill from stress. Decided to run the company in a different way: Went from 12 layers of management with 100 employees. Today have 3,000 employees in 3 concentric circles of structure. Were ‘closed book’ with financials, now open with all financials including salaries. Employees had no voice, now listen to employees and vote on key issues. Job stagnation was replaced with job rotation – continual change. Now you choose your boss and your team. 11 different ways of being paid – salary; commission; royalties; profit share etc. Bottom line impact: Grown average 25% per year. Revenue $4M grown to $240M. Staff turnover 2% in industry of average of 18%. Check out Maverick to read the full story.

How to move to open book financials: don’t do it overnight. Start be being more transparent around management then involve employees in the process towards greater transparency. You have to be prepared for people to be upset about what others earn and deal with that.

Can governmental organisations run democratically? Not many examples, but certainly possible.

Co-working spaces can be democratic organisations.

What’s the correlation between political democracy and org democracy? Why do we live in free and democratic society but work in command and control companies? The move towards more democracy in the world should filter through to companies.

How to change a company to be more democratic: You need to have the buy-in from the top leadership. They have to believe it. But even if you don’t hold the power, you can start to live the 10 principles in the best way possible within the confines of the company and see if it and spread. Be the change you want to see. Try emailing Harvard Business Review articles about democracy to the CEO.

The change to Semco took 10 years. It’s an evolutionary process but it can be done faster than that.

Meetup.com have awards that they give to people who start their own initiatives and get results so showcase what’s possible.

Only one publicly traded company on the Worldblu list. Wholefoods and Southwest airlines could potentially be on the list.

Traci believes that people naturally want freedom – it’s an instinct.

It’s not for every employee. Requires emotional intelligence and compassion which not everyone has.

Is the logical extension of organisational democracy to not need a company at all and just work together as independent people, like the co-working model? Quite possibly, yes.

Lessons Learned from a Self-Organized Company

Here are my notes from an awesome session at SXSW. Two directors sharing their experience of developing meetup.com

Started 7 years ago by 5 founders (60 people today)

The bad times: As they grew, they created heavyweight processes and decision-making. Productivity and quality fell through the floor. Morale was also low. People worked on side products because they were disengaged. War between managers and employees. Hit a low point around end of 2007.

Management team spent two weeks talking about solutions but felt they needed more time.

Got rid of a load of people who weren’t compatible with a better Decided to have a 6 week ‘hackathon’ to shake things up. Rules were:

1. Pick a project that will benefit the meetup.com community and company.
2. Convince 3 other people to work with you to make a team of 4: front end, back end, cust support, product.
3. Your job is to impress your peers

Management announced the game then left the room to allow people to self-organise. And they did.

One team created a multilingual version of the site.

Teams set the office up to suit themselves and their projects.

Created a feeling of energy. People didn’t believe management were serious as it was such a big change from the norm.

The job of management is to nurture and not squash the natural entrepreneurial spirit of the people.

Some people either needed more structure or more authority and didn’t like the new culture.

As the hackathon period finished, they consulted the team to create a big list of problems and issues that might happen with their new way of working. Instead of trying to mitigate all of  the risks they just prepared themselves to fix problems as they arose, and as it turned out, most things worked out OK.

Created an in-house usability studio so engineers can continually see what customers think of the product. The lesson here is close proximity to the customer is key to solving their problems.

Announced to the team that they would maintain self-organisation. Teams continually come together and break up. At first there were too many teams – people were on several teams at once and there was too much chaos.

The key to success in self-organisation is laying down some guiding principles or game rules (rather than business processes in the traditional sense)

Teams set own success metrics, goals etc. Goal of management is to hold people to their own goals.

Only way they restrict people is limiting people to a set number of projects so they’re not spread too thinly.

Very important to remember that everyone’s an adult. It’s not like management are the adults and the rest are the kids. Management do have a lot of skills and experience that can help people to do their job well, but have to recognise that they won’t always be right.

Don’t have many managers, just people to lead particular efforts. Lots of mentoring and coaching. Leads often work on the most interesting projects, but organically.

Very difficult to avoid user interface inconsistency. You can look at having  a cross-team specialist to roll out best practices between teams.

Yay, first mention of Ricardo Semler! :) 
Recommending Maverick and 7 Day Weekend

Meetup have open books – full transparency of financials with the team.

No product roadmap because the team self-organise.

Question: What are the decision-making processes in the company?

A: Consensus most of the team, but decentralised and up to the teams. Teams can pick methodologies like SCRUM for development

Lots of management by walking around – checking in with teams and asking how things are going. Asking a lot of questions and challenging.

Question from me about how you hire people who will fit:

Written test that should take 2 hours given 40 minutes.
Interviewed by 4-6 people. Problem solving at a whiteboard. Interview to decide team fit. “If it’s a maybe then it’s a no”

How does the employee review process work? Have tried 360 reviews, peer reviews, but don’t really have a formal review process. They don’t feel a great need to put this in place.

How does the structure affect support functions in the business e.g. finance and admin? Less so.

South by South West

I've been a bit quiet on this blog recently, but I've been blogging like a trooper over on the NixonMcInnes blog. You can check out my notes from the sessions I've been to at SXSW here.

I'm friendly and like beer, food and good conversation so give me a shout if you're in Austin and want to meet up at any point. Twitter is the best way to connect.

After SXSW I'm going to be in New York until the 24th. I'm up for meet-ups, networking, drinkies so drop me a line if you're going to be in town.

Finally, keep an eye on Tweets tagged with digitalmission to follow the British contingent here at SXSW.

My favourite photos from Goa

Some of my pics from my trip to Goa are on Flickr. These monkey pics are my favourites:

An open letter to The Atheist Bus Campaign

After seeing Robert's tweet I just posted the following as a comment on the Athiest Bus Campaign blog. Please leave your own comment if you agree. I hope it's not too late.

As a fellow humanist, I'm a fan of your campaign and have been excited to see the amount of money raised. Well done!

But I wanted to write to ask you to PLEASE not spend ALL of this money on advertising. Spending a few thousand pounds on an advertising campaign is one thing, but you have now raised so much money that you could invest in something with real longevity rather than ads that will eventually disappear. It would be a powerful statement to show that The Atheist Bus Campaign is more than just an 'up yours' to organised religion.

How about asking your donors for ideas about how some or ideally most of it could be put to good use to demonstrate humanist ideals and do some good in the world, and not just 'shout' a message? You could invite nominations for charities that embody humanist ideals (probably most of them!) and then the supporters of this campaign could vote for which one gets a chunk of the money. Or take a look at some of the fantastic ideas that were developed at Social Innovation Camp. You could potentially fund one of these projects to a point where it becomes self-sustaining. You could even keep the public transport theme and fund the AccessCity project.

What a wonderful legacy this could be for the donors who have made your campaign such a roaring success.

Will you at least have a think about this and discuss it amongst yourselves and with the esteemed Mr Dawkins?

If you do something like this, there's a tenner coming from me. Until then, I don't think you really need my money.

Thanks again for bringing humanism onto the agenda, and good luck.

Tom

Reward systems do not improve the quality of work

I saw this tweet from The Chief Happiness Officer and was immediately intrigued:

“Not a single controlled study has shown a long-term improvement in the quality of work as a result of any reward system.” - Alfie Kohn

A quick spot of Googling turned up the source article.

It's well known that financial rewards are not the best way to motivate people. But this article takes it a step further and says that even the noncash rewards the people cite as being motivating to them don't really have any effect long-term:

"If people are asked which sort of incentive they like best, they may well pick something other than money. But look at how the question -- and, more disturbingly, the choice offered in some real organizations -- is framed: you only get to choose the flavor of the doggie biscuit you’ll be offered, not whether to replace the whole system."

So what does motivate employees?

"Numerous studies have shown that when people are asked what is most important to them about work, the top answers are factors such as interesting work to do, or good people to do it with, or a chance to have some say about what one does. These are not rewards. They are not offered conditionally, on the basis of satisfying someone who has more power than you do."

At NixonMcInnes, we've tried out various different rewards systems, even ones that give the control  to the employee. But in the end we have settled for a simple company-wide profit-share scheme and a focus on democratic principles. We have by no means cracked it, but we're working on it. And I think this article adds some validation to our direction.

"It’s particularly interesting to ask folks who have worked at organizations that don’t use rewards at all, those that pay people a decent salary and then help them create interesting tasks, a sense of community, and an opportunity to participate in making important decisions. These people, in my experience, rarely choose to return to a place in which employees receive patronizing pats on the head or other goodies for pleasing the boss. They want to be paid, not “incentivized”; encouraged, not praised; offered respect, not reinforcements."

Hire managers of one

Good post from 37signals about self-managment - one of the key principles of democratic organisations:

"When you’re hiring, seek out people who are managers of one.

What’s that mean? A manager of one is someone who comes up with their own goals and executes them. They don’t need heavy direction. They don’t need daily check-ins. They do what a manager would do — set the tone, assign items, determine what needs to get done, etc. — but they do it by themselves and for themselves.

These people free you from oversight. They set their own direction. When you leave them alone, they surprise you with how much they’ve gotten done. They don’t need a lot of handholding or supervision.

How can you spot these people? Look at their history. Have they been self-sufficient at previous jobs? Have they defined their own role before? Have they started their own site/company before? Or done their own thing in some other way? Find someone with initiative and a budding entrepreneurial spirit. And then nurture it.

You want someone who’s capable of building something from scratch and seeing it through. When you find these people, it frees up the rest of your team to work more and manage less."

In my experience this is much easier said than done. It's so hard to test for these kinds of character traits in the recruitment process. I do like the idea of seeking out people who have started their own thing in the past before - will give this a try.

Chinese democracy - rock 'n' roll style

Unsurprisingly, the Chinese government has banned the import of the new Guns 'n' Roses album called Chinese Democracy. You've got to feel for the poor officials: Clearly they can't allow such anti-communist messaging to enter the Republic, yet banning it only draws more attention to the issue, with Chinese fans (who apparently hold G'n'R as the No. 8 rock band of all time) no doubt talking amongst themselves about why they can't buy it. So regardless of what the Chinese do, it's a win for Guns 'n' Roses.