The following is more or less the speech I gave at the New Work Future Conference on the 15th of June 2017 — some of it is what I planned to say but didn’t. Some of what I did say but didn’t plan to, I have added where I can remember it.
In 2014 we restructured our organization into interdisciplinary, self-organizing teams and started an adventure that we didn’t expect. One of the effects was that we started getting noticed for this outside of our organization. About nine months after the introduction of our so-called “x-teams” an article about our experiences was soon to be published in brand eins [a renowned business magazine in Germany].
At one of our internal events, a member of the team spoke up and said that he thought we should not be going public with “all of this” — we were not finished.
I immediately responded (perhaps a bit dismissively) that we would never be finished. And we won’t be — it is a process that will continue as long as the organization exists. It is like the saying:
In the end, all will be good.
If all is not good, it is not the end yet.
But still, when I am asked to give a speech about our experiences, I find myself wanting to give you the answers. To tell you: this is how it works. To give you a recipe and provide you with all the ingredients. But I know the truth — we are not finished. All is not good.
Maybe that is why I give you a provoking title like “Transparency doesn’t work” — because that is something I do know (well … am reasonably certain about it).
And transparency is just an example. There is a whole bunch of things that don’t work. Here’s a non-comprehensive list:
- Flat Hierarchies / No Hierarchies
- Self-organizing Teams
- Home Office / Remote Working
- Feedback Cultures
- Unlimited Vacation
So now you surely think, I am being purposely absurd. Not everything on this list can be worthless.
But no, I am not being purposely absurd, and nothing on this list is worthless — we actually implement all of these things at our organization. I didn’t say they were worthless — I said they don’t work. Please let me metaphorize.
Let’s say you decide you would like to have more music at home. So you go out and buy some instruments. Would you then say you have a musical family because you have:
- A cello
- A piano
- A guitar
- A base drum
- And are currently planning to buy an accordion …
Of course not. But it seems to me that far too often the instruments are being sold as the music itself.
What does work?
To stick with the metaphor for just a minute — let’s say you want to have a musical family. And you know of another family across town that is very musical. Do you go to them and ask them what instruments to buy? Or do you find out for yourself what kind of music your family would like to play and pick out the instruments accordingly? Of course once you have your instruments you can learn how to play them from others — you can read about it and get lessons from teachers and talk to people who have been playing longer than you — but when it comes to playing together with your family, what comes out at the end is completely individual, hopefully beautiful and most likely unexpected.
OK, let’s assume now that I am one of these guys who has been doing this a little longer than you. And let’s leave the metaphor now, because we are not talking about music but about organizations.
So you would like to transform your organization — here is where you start: with why. (This is not new for you, probably, but it is not just about your “why” for the company, your purpose as an organization — it is about your reasons for New Work.)
Our foremost “why” was: work should be fulfilling and we want to enjoy what we do and we want to be proud of what we make.
We also say that decisions should be made where the knowledge and experience is and since more and more decisions should be made in the team, more and more knowledge should therefore be passed to the teams. (There: that’s our reason for transparency.)
Furthermore, since our product is creativity and creativity doesn’t just happen at a desk, people should be able to be flexible with their working hours and place. And besides: our world needs more creative workers, creative workers need freedom and responsibility and to be able to learn. (Reasons for self-organization and trust.)
Of course your “whys” could be similar or completely different.
Values? Culture? System?
So once you have your “why(s),” how do you go about it?
You will hear a lot of different opinions on this. Some say it is about values, others that you need to shape your culture and still others say that is about the system. They all have the same intent mostly, even if they describe it differently.
Currently I prefer the word structure. You can define the structure, the framework of how your organization should be. Actually, if you are a leader of the organization you must define the structure.
A structure defines what is allowed, where the limits are, what is expected, who makes decisions, what influence individuals and teams have. But a structure is more than “where we are now?” — it is also “where do we want to go?”.
And how do you get to where you want to go? You run experiments. This is learning to play those instruments you picked out. We run a lot of experiments and I would like to share two with you, from which we have learned an incredible amount.
In this example, I will talk about only one side of transparency — the transparency of numbers.
We knew when we started the x-teams that we wanted them to be able to make more and more decisions on their own. Some were easy. For example, decisions about whether someone in the team may take vacation in two weeks or work remotely on Wednesday. Some were harder. Should we put work into an internal project? Should we take on this new project from a new client? These kind of decisions can only be made properly, if you know how the organization is doing as a whole.
Step 1: Yearly reports
Well how can you do this? You can share the numbers. The easiest and quickest way was to share the yearly report*. What do you think happened? Well most employees did the following: (flipping through the report) “oh, well this is interesting. Did you know that the managers make this much money?” The rest never even glanced at the report.
So this was well intended but no real benefit. The information wasn’t understandable — it had no meaning at all.
*Yes, yearly reports are public anyway, but most employees don’t know this fact. We were trying to generate an interest in the numbers — trying for a quick win.
Step 2: Monthly understandable reports for each team
But we run experiments and improve and get better , so we weren’t finished. It took us a long time and the help of our great accountant, to reach the point we have now: monthly reports that everyone can understand without much effort.
So now the teams make good decisions about internal projects and whether to accept projects or not? Um. No. Now they are basically insecure about the finances and will accept any project at all and internal projects are neglected. On top of that, they mistrust the other teams — especially those that don’t seem to be performing as well. They have competition and insecurity and have decided that they don’t want team reports anymore.
Step 3: Investment Decisions
Why? Because financial transparency is only one side of it. We did not manage to make transparent what one can consider “investment” — and since the teams can’t see that, they can’t make decisions about it. So the management needs to continue to make these decisions. Which is fine. For now.
So transparency didn’t work. It didn’t solve anything . Actually it caused a lot of work.
Will we give it up? Of course not! It is one of our most important instruments — we just don’t play it very well yet. Well, not as well as we would like to. And it is only one instrument of many that are important.
Experiment: Unlimited Vacation
One of the experiments we’ve learned the most from was the installment of “unlimited vacation.”
About a year and a half ago, we in management decided it was time to get rid of the 25-day vacation rule. Why did we want to do this? Of course to give people more flexibility and responsibility. But also partially to get rid of some annoying rules, for example: you have to take your vacation from last year until March or it will expire.
But in hindsight, I would say it was also to feel like we were progressing — that is why we picked that time to do it. We had already learned a bit about implementing something new: first talk about what you want to do and invite team members to work on it with you. We asked each team to send us a couple of members who would like to help develop this idea.
Some of the teams thought we were voting about the idea. They said, we don’t want unlimited vacation. We just want everyone to have more vacation— like 10 days more.
This shocked me quite a bit. They obviously had no understanding for where we were going. They didn’t want freedom and responsibility!
What we learned from this:
- We (the owners in this case) are responsible for the structure — where are we going? What do we want?
- We needed to make it (much more) clear, that we wanted to do this and that we were not voting about it, but asking for involvement about how we were going to do it.
- And with much more hindsight: that we had forgotten (or didn’t understand yet) that when you are creating a structure , it is not enough just to know where you want to go — you also have to know where you are. If we had done that we would, perhaps, have understood that we had other things — like trust — to work on.
Then again if we hadn’t run this experiment, maybe we wouldn’t have learned those things yet.
When we created the x-teams, we did not think we were starting anything big. For us it was a logical development — we were getting too big to operate without more overhead and we didn’t want traditional hierarchies. From an agile viewpoint, interdisciplinary teams are perfect for involvement and commitment on projects. And self-organization frees up overhead about vacations and working hours and such.
But it turned out it was a huge change process.
Every change brings insecurity. Every change makes people think. Every change with a team creates new situations in which people have to figure out how to work with each other. All of this costs energy. Less energy for the product or service you are selling. So it is likely that at first you will make less money. Change is a long-term investment.
Because change brings insecurity it also leads to resistance. And when it comes to transforming our organization — to creating a new way to work — we have to work within a larger system that is not made for this. It is one that was made for an industrial world. It is full of misconceptions and bad habits.
It is a system that doesn’t promote responsibility, creativity or autonomy. A system that is full of rewards for performance and punishments for misbehavior. It is a world that tells me I am selling my time to my employer (it is, therefore, not my own time anymore). It implies that my salary is an indication of my progress, and that the number of unemployed people in a country is a measurement for the health of the economy.
There is resistance at every level against what we are trying to build in our little islands of “New Work” — we feel like we are struggling against other organizations, the state, the school systems, and deeply rooted habits in ourselves.
while we are changing our organizations we are also changing the world. By increasing the understanding of our team members, by exchanging experiences with leaders in other organizations, by giving interviews, by writing, by giving speeches at conferences — we are all contributing not only to New Work but to a New World. And it is worth it.
And of course it always starts with ourselves. Figuring out where we want to go — and why we want to get there. Being honest about where we are. Talking to a lot of people about their (honest) experiences. Reading and listening to the “experts” …
… and finding our own way — running experiments and adjusting them …
… and never going back.