Right, let’s move this thing along shall we?
Here’s the second and middle extract from Chapter 2, all about employing Democractic type stuff at work.
The tricky thing is I haven’t got permission of these companies covered yet (though everything I’ve written is in the public domain), so I’m hoping I don’t get in trouble but want to keep the flow of content coming your way so here goes…
(Oh, and where it says ‘TK’ is where I need to do more research – please ignore!).
Who can we be inspired by?
To make more sense of these ideas, let’s take a look at some organisations that are already reaping the rewards.
Namasté Solar is a rapidly growing solar power business based in Boulder, Colorado. Providing solar energy technologies to both business and residential customers, the business is thriving, ranked #975 in the 2010 Inc Magazine Inc5000, has grown 306% in three years and turns over in the order of $TKm per annum and has TK employees.
That’s about as conventional as Namasté get. For starters, Namasté started as a pure out-and-out co-operative. In a co-operative the business is owned and operated by the same group of people, with no external shareholders, and co-operatives often equally share the equity, and sometimes the salaries and other financial rewards in the company, although that varies from co-op to co-op. Indeed, over time Namasté itself has responded to its own evolution and the changes in the world around it, and continues to adapt how it operates to this present day. These structures do not need to be rigid and inflexible.
Hearing Blake Jones from Namasté Solar talk about their business, their structure and in particular how they manage decision making is refreshingly clear. The Namasté approach has five levels at which decisions are made:
1. Individual level – ‘On the individual level, the company is a “meritocracy” whereby individuals can assume responsibilities based on proven competencies and feel empowered to make decisions.’
2. Peer review level – ‘Peer review refers to a process whereby an individual co-owner consults with multiple other co-owners to resolve the issue.’
3. Committee level – ‘When more in-depth discussion and collaboration is required, the issue is addressed by one of the company’s many “committees” which consist of volunteers, and “teams” which consist of members grouped together based upon job role.’’
4. Company level – ‘A company-wide vote is required when a new or particularly important issue is introduced. The issue is then addressed by the entire company via a democratic voting process.’
5. Board level – ‘In the rare event that a resolution is not made at the first four levels of decision-making, the board of directors, which consists of five elected co-owners (any co-owner may nominate themselves for Board elections), is empowered to intervene and provide resolution.’
Can you see how this pushes decision-making power into Namasté’s team of TK people?
Rather than a default of either individual managers or the exec team, the whole company is empowered and people encouraged to resolve issues at the early stage levels wherever possible.
What is also striking about the Namasté model is the breadth of available options in how to get a decision made, without it being overwhelming or cluttered. There is no default decision making location, nor a sense of a particular bottleneck slowing the organisation down.
What would it be like to work in an organisation where the decision making was so clearly expressed and so evenly distributed?
By the way, all of this does not mean to say that the board luxuriate in an easygoing world where no tough decisions ever get to them. Blake, who is voted in as the CEO for TK year terms, has had to deal with redundancies and TK.
Oh, and the board are also voted in. Seriously cool company.
Namasté in 2010: $TKm revenues in 2005, TK co-owners.
HCL Technologies is a leading global IT services company that focuses on ‘transformational outsourcing’. Headquartered in TK, the company has over eighty thousand employees located in offices in 26 countries and works with a customer base across many industries including Financial Services, Manufacturing, Consumer Services, Public Services and Healthcare. The business has a turnover in the order of $4bn a year. Not small beer!
Like many people, I hadn’t heard of HCL Technologies story until I came across the book ‘Employees First, Customers Second’ by CEO Vineet Nayar. It’s a great story about a how a big business goes through a transformation to continue to thrive at scale but through radical new management practices and an ethos that flips the traditional ‘customers first’ mindset to a position of ‘if we do the right thing by our people, our customers will thrive as a result’.
What the HCLT story has done is eliminate in one fell swoop the suggestion that participation cannot work at scale in business. It also provides a helpful and grounded perspective of what it is like to take a large existing business on such a journey. Case studies like this are few and far between and the early pioneers deserve kudos and support. (Another example worth looking up is the American healthcare company DaVita).
In ‘Employees First, Customers Second’, Nayar outlines 5 brilliant and practical practices that his substantial business put in place:
1. 360-degree Survey
2. U&I Portal
4. Smart Service Desk
5. Employee First Councils
In this book we will look at the first 3 of those 5, and I wholeheartedly recommend buying the book to read the whole HCLT story.
1. 360-degree Survey
In their 360-degree survey, HCLT went much further than the traditional approach in two ways: firstly, any one who felt that a given manager affected their performance could participate in their 360-degree review; secondly, any one participating in the survey could then see the results. You can imagine how this creates massively more transparency around reviews, and fundamentally shifts the responsibility to the managers rather than the employees. In fact, it’s a great example of the application of Linus’ Law by welcoming in outliers and diverse opinions to create the very best possible quality feedback and learning for management. What does this have to do with Democracy and Empowerment? Everything! This approach massively flattens out hierarchy and reintroduces merit, it shifts power to the grassroots and broadens it out to a wider base, and in doing so directly influences the power and decision-making in HCLT.
Is there a way you can start sharing the results of your own performance review with your team, and invite more people in to review your own performance?
2. U&I Portal
Nayar and his team at HCLT designed the U&I platform open up the CEO’s office (and power base) to allow anyone anywhere in the workforce to ask a question. The platform is available for all in HCLT to see, and the question, the questioner and the answer are all visible.
This profoundly shifts the ability of senior management to hide from difficult questions and promotes the ability of anyone in the organisation to ask one.
As Nayar writes, a group of employees told him “this is the biggest change we have seen at HCLT in years”. Powerful culture change by walking the talk and really, genuinely opening up the floor to the issues that people in the organisation care about.
Is there a way you can use simple, lightweight technology (in small teams, open Q&A or email will suffice!) to get the dirt out and get the ‘elephants in the room’ talked about?
Whereas the first two of these management practices are inherently about becoming more participative through enabling authentic communication and transparency, this third is more fundamental: it is about setting strategy together rather than hierarchically or in silos.
In their MyBlueprint endeavour, HCLT had three hundred managers responsible for business planning in their respective areas produce their individual ‘blueprints’ for the coming year and then share them, together with an audio walk-through, on a Facebook-like platform called MyBlueprint. These plans were then available for a further 8,000 managers to consume, review and feedback on.
The results speak for themselves: “Everyone felt able to contribute to the thinking and planning porocess. People understood the challenges better, owned the plan, and could align themselves with the strategy as I had never seen before”.
This is the power of deep, meaningful participation in the running of our organisations. To get better solutions, more belief, higher levels of engagement. HCL is an inspiring and instructional example of how very large businesses can do just that.
HCL Technologies in 2011: $3bn revenues, 82,000 employees.
Apple and Visionary Leaders – the anti-examples?
One of the great unresolved tensions for me in the democratic model is best summarised in the ‘what about Apple then?’ case. According to the mythology and the literature, Apple was run by Steve Jobs in a tightly controlled and extremely hierarchical way. Whole departments were locked down in secrecy, people worked on tiny segments of the visionary product in development – never seeing the whole of what they were contributing to until the very end, Jobs was himself apparently incredibly harsh in his dealings with people.
If all of this is true, then it really does sound like Apple is a powerful anti-example of the democratic mode of working, truly the antithesis of Linus’ Law: here, rather than many eyeballs, there were just a few of the ‘right’ eyeballs.
And, in that model, the company created some of the greatest product designs of the late twentieth and early twenty first centuries. It changed the face of the personal computing, music, mobile phone, and (possibly, they gossip at the time of writing) TV industries.
What can be said about this? I do not have the answers, at least not yet. Perhaps there is something about the resilience of a business so dependent on so few. It sounds churlish to say it after Jobs’ death, but it is true that the company was not just dependent on him but on a few key people. Perhaps also there is then something about an organisation’s life span when it is so dependent on a visionary individual. Perhaps the democratic model can provide a platform for a longing period than the led-by-a-few model.
And beyond Apple and back into the community of democractically-run businesses, there is the common thread of visionary leadership. It seems to be both a paradox and just a fact of life that to involve the many needs to vision and energy of just one or two: Semler at Semco who we are about to meet, Blake at Namasté, Vineet at HCL, and still more – the visionary CEO Kent that turned around DaVita (briefly referenced but not looked at in this book). Or perhaps the world lionizes the few leaders progressive enough to see these opportunities and committed enough to see them through – perhaps that’s it. They are over-celebrated simply because they are so different.
I do not know the answers, but if we are to grow this movement and if you are to carry your own changes through then we must at least glimpse into the dark spots and challenge what we find.
Grandfather and Mother Earth
One of the things that happens when you start to take this alternative approach to business is that your peer group drops from squillions of everyday, conventional businesses to a much smaller, tighter set of organisations. And in that, it can be hard not to feel alone.
But as we have seen there are absolutely others on this journey. The two motherlodes for me, two of the leading lights that I use to help me stay on course I half-jokingly refer to here as the Grandfather, Ricardo Semler of Semco, and Mother Earth, Traci Fenton and her brilliant team at WorldBlu.
Ricardo Semler is the guy that first inspired so many of us in this movement with the possibilities of a different approach through his hilarious, mesmerising books Maverick and The Seven Day Weekend. Semler has walked the talk: he has grown the family business he inherited from his father from a traditional manufacturer of pumps TK into a thriving conglomerate where some of the most radical working practices are at play. People can set their own salaries, if a meeting is boring you can just leave, TK.
Traci Fenton founded WorldBlu with a mission of spreading the concept of democracy at work. This dedicated group of people work tirelessly towards their mission of seeing 1 billion people employed in democractic organisations. Gob-smackingly cool. Talk about a Purpose of Significance.
WorldBlu is without peers in the job that it does connecting up progressive leaders and entrepreneurs. Through its annual WorldBlu List of Most Democratic Companies, the organisation builds pride and profile for the community, but vitally that list is based on a comprehensive surveying tool which is extremely useful in benchmarking where your organisation is on the journey to becoming as democractic as it can be.
So the next and final extract is the ‘OK, so how do we do it?’ section.
What do you think of this section? Hit me with comments and feedback please: here, email@example.com, on twitters @willmcinnes / #cltrshck.
3 thoughts on “Chapter 2: Democracy, Who can we be inspired by?”
Not sure I understand the heading “Grandfather and Mother Earth”.
Is part of the answer to the Apple conumdrum about measurement? Apple is very successful in terms of its market capitalisation. In terms of introducing products that people like and buy.
But are those the only measures of success? How you measure something surely counts?
How successful is it in terms of sharing its wealth? In ensuring its workers are well looked after?
Is it only success on the capital markets that counts? and in the product markets?
What about in the employment market? In the market that is made up of people – not cash or sales figures?
Pete – thank you for your bloody useful pointers. Plan on changing the Grandfather heading (bit odd) and your points on Apple are extremely helpful in clarifying some of what I am trying to get at. Really helpful, thank you!
Thanks so much Will for the shout and for spreading these ideas out even further to the world! Wonderful to see you and the gang on Friday. You all have built a truly extraordinary democratic company. Can’t wait to read the book! 🙂