MANAGEMENT SPECIAL..... Unlocking the Benefits of Self-Management Without Going All In on Holacracy PART I

Unlocking the Benefits of Self-Management Without Going All In on Holacracy PART I

This article is by Mike Arauz, co-founder of August, an organizational design firm that helps teams develop their capacity to learn and adapt quickly, together. Mike is also a co-author of the Responsive Org Manifesto.

I remember that Monday morning well. It was too early to be at the office, and the team sipped coffee anxiously, waiting for the meeting to start. For the past two months, every day seemed to bring bittersweet news about the future of our business. One day we were going to pull through. The next day we were doomed. Understandably, the team hoped that this special meeting would finally bring some clarity one way or the other. Unfortunately it too was painfully short on clarity or action.

One month later, Undercurrent — our recently thriving company — abruptly shut its doors forever.

When I think back on that Monday morning, and the tumultuous weeks on either side of it, the lesson I learned was that our greatest failure was our inability (or unwillingness) to completely embrace a new, responsive mode of self-management that had transformed our business over the past year. We were finally reaching a point where senior leaders weren’t swooping in to overrule or derail others’ work; where we weren’t letting a desire for perfection get in the way of user-driven iteration; and where we were maximizing transparency about our company’s performance and operations.

But when it came to the biggest decisions our company would face — first whether or not to sell the business, and later how it might be saved — we hung on tight to the traditional command-and-control ways of operating. We did this at exactly the time we would have benefitted most from trusting the team to collectively determine its own future.

In the wake of Undercurrent’s collapse, myself and five other former team members have picked up the pieces and started to build something new. August is different from Undercurrent. But, we are intentionally building on everything we tried while we were there, and everything we learned about what worked and what didn’t.

Undercurrent adopted Holacracy in the Summer of 2013, and it made a huge positive impact on our business. Yet, as August looks ahead at the company that we want to build, we have decided to opt-out of Holacracy’s rigid system, and operate with our own lighter weight approach to self-management. While many of Holacracy’s underlying principles are incredibly valuable, it is possible to reap the benefits without formally adopting Holacracy.

Whether you’re interested in Holacracy or not, these are the fundamental practices that any company can design into its DNA to give it the capacity to thrive — together — in the face of the inevitable challenges we will face.

This is how to design a company, from the ground up, that is capable of managing itself as it grows and evolves.

1. Nail a memorable common purpose.

Our purpose at August is to build capable teams for every meaningful mission. Committing to a distinct and explicit purpose — your collective raison d'être — brought a transformative focus to Undercurrent’s business, and when we started August, defining our own purpose was priority No. 1.

These are not empty words. It’s not a marketing slogan. We’ve even embedded this purpose into the legal foundation of our firm by incorporating as a New York Benefit Corporation. We believe that our world is full of missions with the potential to change our future for the better; and each of these missions deserves a team that is capable of learning and adapting fast enough to accomplish it.

This purpose doesn’t attempt to say everything, but it describes simply and clearly what we aim to accomplish. Importantly, it does not describe how to do it. Figuring out how to do it is the work.

This purpose now acts as a lens through which we can view decisions from now on. “What makes a team capable?” “What’s the best way to improve a team’s capability?” “Does this client share our definition of ‘capable’?” “Does this client want to have a meaningful impact on our world?”

Once you have a clear and explicit purpose, you'll find that entrenched debates become unstuck, and difficult decisions find resolution. This progress isn’t without its costs. Over time, beloved and long-tenured employees may decide that their personal career purpose is leading them in a different direction, and chose to leave the company. You may reevaluate your project work and client relationships and realize that some client relationships either need to evolve substantially, or you need to gracefully end the relationship altogether.

What is significant isn’t that you’re able to talk about the need for focus, or what to focus on — debating what to prioritize is easy — but, rather, that everyone has the exact same externalized reference point to use as a guidepost in these debates. The debate is no longer about one person’s opinion vs. another’s, but rather what course of action will help move you toward your shared goal.

This is the real magic of a great organization-wide mission: a true and compelling purpose becomes the ultimate trump-card that everyone can use to break through bureaucracy and inaction and move the company forward.

At August, our process for defining and committing to our purpose was fairly organic. As a very small group of founders with a clear idea of the business we wanted to pursue, we were lucky to all start on the same page about the essential idea of our purpose. A lot of startups benefit from the same momentum. But using precise words matters, and this is where we focused more explicit effort. We began by trying to express the clearest and most explicit version of the idea we had in our heads.

These early versions were wordy, clumsy, and not very user-friendly. But they helped us discuss and analyze what was most essential. Then, once we had landed on a true, but cumbersome version, we edited and re-edited over the next few weeks, exchanging slight iterations via Google Docs and Slack messages. Finally, when we arrived at a version that we all seemed to like, we brought it to an in-person all-team meeting and used the consent-based decision-making process described below to ratify and commit.

Once you have this single unifying goal, you can apply it to all of your other work. Define and commit to specific and explicit missions for every team within your organization. Start by asking yourself, “What are the most critical outcomes that we need to achieve to help make progress toward our overarching purpose?”

Identify a small handful of related, but independent, missions that you expect to be relevant and critical for the next 4-12 months. (Trying to predict what will be important more than 12 months into the future is a fool’s errand.) After you have this starting structure of purpose-aligned missions, you can assign them to members of your team. Each leader can then break the work down further into monthly, weekly, and daily sub-missions that can each be owned by its own sub-team.

At first, these broad areas of focus might have a lot in common with traditional “functions” (i.e. Product Development, Customer Relationships, Operations, Sales, Marketing, and HR), but the reframing of them as purpose-driven actually makes a significant difference in how they manifest themselves in your organization.

At Undercurrent, this reframing gave us permission to ask specific individuals to lead the teams and work for each of these areas without restricting the roles that an individual might play to just ‘Head of HR’ or ‘VP of Sales.’ These purpose-aligned missions existed independently of the individuals who filled them. The people who owned these missions were able to bring their whole selves to the challenge without having to limit or restrict their sense of self or their professional ambitions. Perhaps most significantly, it allowed us to look at the work of the organization through a more objective lens.

We could ask ourselves honestly, “Is this really the most critical work to be done right now in service of our purpose?” without the question getting tangled up in the question of whether or not, for example, Susan should or should not be VP of Operations.

Every mission should be:

·         User/Customer-centric: Express the impact you aim to make for those you serve (internal or external)

·         Brief: ~140 characters or less

·         Clear: Jargon-free and easily understood

·         Time-bound: Achievable within intervals of 1 week, 4 weeks, 3 months, 6 months, or 1 year, depending on the scale of the mission

·         Ambitious: Inspires the team to do their best

2. Digitize your org to tap your network and blow up the hierarchy.

All of the essential elements of our organization are captured and expressed in a single digital repository, open and accessible to all members at all times, and able to be changed and revised on a continual basis. In this organizational system of record, we document: our collective org-wide purpose, specific sub-missions, teams, individual roles, expectations for and key activities of team members, org-wide and team-wide policies, and boundaries of ownership between teams. Currently, this information lives in Google Drive, so all changes made to these elements over time are recorded. You can view August’s record here, as an example. We are still a tiny startup, so the record is short, but it will grow and evolve steadily over time.

While it may seem daunting or tedious to capture all of this information for your organization at first, once you’ve done it, the result is transformative. The reason why digitizing your organization is so powerful is because the single biggest challenge holding most organizations back is that, as Yammer Co-founder and former CTO Adam Pisoni likes to say, “People don’t know how to organize to get things done” in a digital world. As technology has forced us into a networked work environment, with multiple overlapping and multiplying channels of communication, it has become seemingly impossible for us to keep track of our work.

Organizing to get things done depends on knowing 3 critical things:

·         Knowing what you need to do.

·         Agreeing on what we need from each other.

·         Knowing who is (and isn't) responsible for what.

In most organizations today, the answers to these questions, and all the related interdependent questions, exist at best in static PowerPoint documents sitting on a senior manager’s hard drive, and at worst are trapped in implicit assumptions inside the heads of all the people who need to work together to move the company’s purpose forward. The power of making all of this previously inaccessible and implicit information about your organization easily accessible and explicit can not be understated.

It is critical that this practice enables the team rather than burdening them. This is relatively easy as long as you make a habit of it. Honestly, the only hard part is transitioning an existing org into this digital format. But, once you’ve created a v1.0, each team can meet regularly and easily make updates and changes. At August, we have a special meeting once every 4 weeks, where anyone can propose changes and the group can collaboratively commit to updates.

This way of documenting your organization is actually one of the lesser known facts about Holacracy. There’s an accompanying piece of software called GlassFrog that facilitates and keeps track of the organization’s self-management. I would argue that GlassFrog might actually be more powerful and significant than Holacracy itself. While Undercurrent had many internal debates about the merits of sticking with Holacracy, we stuck with it primarily because we were hooked on GlassFrog.

Once you’ve digitized this information, anyone, at any time, is empowered by the software to find out:

·         Who is responsible for x? (Is anyone responsible for x?)

·         What’s on my plate? What’s on my teammate’s plate?

·         What are the teammates I depend on expected to provide for me?

And being able to get easy answers to these questions, and others like them, gives everyone the ability to make informed decisions about how they do their work, and how they work with their colleagues.

Having our organization expressed in this transparent way builds trust and empowers team members because our commitments to each other are explicit and open. We know exactly what we’ve promised each other, and have the same point of reference if we feel that those commitments need to change.

GlassFrog provides its own unique architecture for capturing your organization in digital form:

·         Purpose (org-level, and team-level)

·         Policies

·         Teams & Roles

·         Team & Role purpose

·         Team & Role domains

·         Team & Role accountabilities

·         Team & Role strategies

·         Key Metrics

·         Projects

Holacracy and GlassFrog is one option. Other companies, like the tomato processing company Morning Star and their “Colleague Letter of Understanding,” have created other variations that address similar organizational outcomes. We’ve also seen that shared, cloud-based documents in Google Docs or Box can be used in a similar way, given the right templates and structured information.

The key is to make these critical elements of your organization explicit, and to put them in an open and accessible digital format. This digital record quickly becomes an essential reference point. When you’re thinking about recruiting and hiring, you always have up-to-date job descriptions for every possible role. When new team members want to find out what their new colleagues do, or who to connect with to do their work, they simply refer to the record. And, perhaps most importantly, when the company wants to make larger-scale changes to its structure, it has a single shared reference point for what to change. Before you try it, it’s hard to imagine what difference it makes. But once you’ve tried it, you’ll never go back.

CONTINUES IN PART II