’s story of democracy

I just dug out these notes that I posted on an old blog a while back from a talk given by two of the founders of about how they became a democratic company. Some good nuggets in here for other businesses, especially in the tech sector so though it was worth re-posting. started in 2002 by 5 founders.

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 changing the status quo. Decided to have a 6 week ‘hackathon’ to shake things up. Rules were:

1. Pick a project that will benefit the 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 time, 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.

5 thoughts on “’s story of democracy

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