VII: No Manager’s Land
Paweł Brodziński, CEO at Lunar Logic, November 2017
For many people, changing course is also a sign of weakness, tantamount to admitting that you don’t know what you are doing. This strikes me as particularly bizarre — personally, I think the person who can’t change his or her mind is dangerous.
Ed Catmull, Creativity, Inc.
I first met Paweł Brodziński about a year ago. I was at a tech meetup in Kraków, Poland to see my friend speak. At the same event, Paweł was giving a talk about the way his company is run. Is run because despite the title of CEO, he does not do it himself. Lunar Logic, a well-regarded local software agency, does not have managerial roles at all. There is no one or two people calling the shots. Instead, the team makes decisions through collective intelligence and autonomy. Or, to be less pompous, debate and taking responsibility. When hiring new people, they look at empathy and ability to work in a team even more so than for technical acumen. And according to the CEO, they are reaping the rewards — the company is doing much better than years ago, when it was still run the old school way.
Earlier in my career, I’ve had my share of asshole bosses. Back then, a workplace without managers would have seemed like a dream come true. But I eventually came across competent, caring managers and saw first-hand how much difference they make. I grew skeptical of ideas like holacracy — a decentralized model of running an organization — but still curious to what extent you can let go of classic people management and maintain both a profitable business and a friendly workplace. So I emailed Paweł and he agreed to talk about his ideas and how they have been put into practice at Lunar Logic. We also discussed whether the model they employ is something other organizations could (or should) try.
Wojtek Borowicz: You say that you’re a CEO in name only. What does that mean?
Paweł Brodziński: It means in Lunar Logic there is no decision I can make that someone else couldn’t. I don’t have an ounce of power more than anyone else. The only exception is the liability imposed on the CEO and the board by the local law. But that’s an external restriction. Internally, I don’t have more power than an intern.
You don’t have managers at the company?
We don’t. The only person at Lunar Logic that could be called a manager would be me and I don’t want any of that.
If there is no managers then… who manages?
In one word: everyone. But of course it’s not that simple. I don’t believe in collective responsibility because if we all made a decision, then who really made it?
We like to think of autonomy as opt-in. Everyone is invited to manage but no one is forced. You can take part in hiring decisions, in drafting the company’s strategy, in planning salaries and expenses — but you don’t have to. You can even decide to not take up any tasks usually associated with managers and that’s fine too. We appreciate if you do but we’re not gonna force you.
Additionally, no one is involved in all the management duties. I let go of some things myself because others do them better. Everyone chooses the tasks in management — or leadership, as I prefer to call it — at which they’re the strongest. Some people will be more engaged in discussing compensation, others will be interested in office management. It all happens naturally. It’s also important that even though everyone manages, each decision is made by someone. The person who makes the decisions also takes responsibility. We follow that principle even with the most obvious, non-controversial decisions. Therefore, everyone never means collective responsibility.
Is that the model you started with? And why do you dislike managers?
We didn’t start with it. When I arrived at Lunar Logic five years ago, the company was centered around a strong manager. The then-CEO, Paul, used to make almost all decisions, from spending a hundred bucks to spending a hundred thousand. When we started changing things, we didn’t have a specific endgame in mind. I didn’t come in and say hey, let’s create an organization without managers. We started bringing in more transparency and autonomy and each time there was the question of what we were gonna do next. For example, I wanted salaries to be more fair so now we’re all shaping them instead of just me. In a way it was a series of experiments that were validated or invalidated along the way. So it’s not that I don’t like managers. It’s just exploration in search for something that works better than what we started with.
So everyone at Lunar Logic has a say when decisions are made. Are the employees also shareholders, making profit or taking losses from these decisions?
We have two mechanisms for that. In 2014 we introduced a profit sharing scheme. At the end of each year, we put some money into a safety fund because financial stability is a value we all share. Everything beyond the safety fund we call overflow money and spend it all. Cash bonuses are part of the overflow.
This year we also introduced an employee shares program. The first group has already become shareholders. But it’s not designed as a financial lever. It’s not like becoming a shareholder will have a massive impact on your wallet. We’re not talking about huge money. We’re a professional services company without its own product, so we don’t have the kind of allure that startups do — they fail nine times out of 10 but they also have a chance for enormous returns. We’re not going to be like that in the foreseeable future. It’s more of a mechanism to let people create a long-term relationship with the company.
I have an anecdote. My first full-time job was at a mid-sized startup and I had no manager. Initially, it felt great because of the freedom and flexibility. But then a few years later I moved to a much larger company and was like wow, now I have someone who makes sure I have what I need to develop my career and helps me contribute to the company. Don’t you think it’s useful to have a person like that, especially early in your career?
You mentioned two roles of a manager — to help the employee’s career and to make sure that they do a good job at their role. There is more but let’s focus on these two. Even putting aside how many managers actually do that, do you really need a manager for them? Let’s say you’re a developer, working side by side with someone much more experienced. They become your mentor, help you in your day to day tasks, show learning resources, inspire you. Early in my career I worked with a friend who was this kind of a mentor for me. I did not need a manager because I just asked him what to learn and how to make progress. And sure, some people are just lucky to have come across someone like that. So why not define this role better and make sure we’re systemically equipped to help new employees develop their skills, for example by a broad mentorship system?
It’s the same with making sure the employee’s work benefits the company. You don’t need a manager for that. It could be a project owner instead. It can also be your team. When we look at the specific roles of a manager — not just about the position — we can distribute them across people who are not in management positions. For example managers decide about salaries — we have that role too, we just do it differently. And so on.
I also have one thing to add about career development. Because as much as I’m a fan of mentorship and feel it’s important, I believe it’s upon each of us to take responsibility for our careers. I get frustrated when someone is like I want someone to tell me how to develop. No, it’s your damn responsibility. Sometimes you don’t have anyone to learn from in your workplace but there’s so many sources to learn from: the local community, conferences, books, etc.
How do you know your employees are satisfied with the way you do things?
I once asked everyone at the company who remembers the old times to rate the overall engagement level then and now. According to what they said, it improved two-fold over four years. That’s of course not a scientific inquiry but we have objective parameters, too. Turnover, for one. We had difficult moments but we see turnover dropping gradually. The average tenure at the company is extending. And that’s in a very competitive market where the average tenure is below two years.
You write and speak a lot about the importance of transparency, empathy, and diversity in organizations. You disposed of managers in your company. But Lunar Logic has what, two dozen employees? Do you think these principles can scale to 100, 1,000, or 10,000 employees?
The largest company I heard of with a similar, autonomy-based model employed 30,000 people. Frederic Laloux wrote about it in Reinventing Organizations. So the simple answer is yes, they do. But keep in mind that with our approach we have very few rules. We have a couple of meta-rules. How we make decisions is one. But we don’t have many security mechanisms, preventing people from acting stupidly or maliciously. We can afford that because the company is small enough. But when a company grows, you need more formalized security. The rules must also be more specific than applying how we make decisions to everything from taking vacation to planning an office renovation.
We also don’t have any governance processes — something that shapes the organization’s structure. Things like hiring new people. Right now we just meet in a group with everyone who wants to be involved. We talk and someone makes the decision: hire or don’t. We can do that because there’s less than 30 of us. If we had 200 or 300 employees, we couldn’t gather everyone and would need a governance process for hiring. So yes, the model can scale, but specific solutions will vary between companies with 30, 300, or 3,000 employees.
You think this model of organization will grow more popular?
It will but it will still be marginal. It’s superior in many aspects but it’s so different to how we’re programmed to behave in the workforce that in the foreseeable future it will remain a niche. It’s the kind of thing that people will look at and say yeah, that’s cool, but it wouldn’t work for us.
Sticking with large organizations — you often refer to Project Aristotle, the Google’s study that proved the most important factor contributing to a team’s productivity is psychological safety. And yet it’s also Google who hired (and eventually fired) James Damore, infamous for his anti-diversity manifesto. How can the same company scientifically prove the value of diverse workspaces and hire people who despise the idea?
I once wrote a blog post about what we pay attention to while hiring at Lunar Logic. There was a huge disconnect between what I was trying to say and what people were reading. As far as diversity in tech goes, there is a fundamental misunderstanding. I’m not saying let’s hire people because they’re different. I’m not even saying let’s optimize for diversity. What I’m saying is that there is research proving that some traits make teams better, so we look for candidates with these traits. We look for people with high empathy and, statistically, women are stronger here. That doesn’t mean there are no women with low empathy or men with high empathy. It doesn’t mean we will always pick a woman over a man. But it makes women more appreciated in our organization. Now, many developers perceive employee’s value solely as a sum of their technical skills. The same mindset makes so many people support the anti-diversity guy and it is why Google hires people like him. We’ve been programmed to do that and it’s damn hard to get out of it.
Google was founded by two geeks, Larry and Sergey. And it’s the founders and executives who have the most influence over organizational culture. It’s been my problem with Google for years. They reached out to me with job opportunities a couple of times. One time, out of curiosity, I asked about the specifics of the recruitment process. Turns out, to get a senior management job at Google you need to go through a technical interview. They ask you about programming. I don’t have a problem with doing a technical interview but I do have a problem with it being a part of the hiring process for a senior manager. If you’re looking for someone to manage a department of 200 people and you expect them to keep their technical skills at a certain level, it shapes behaviors. It means that managers are encouraged to invest their time into honing their programming skills and not, for example, learning psychological aspects of the job. This shows that geek culture is still strongly rooted in Google.
Going further, Google was pushing to hire more women even before Project Aristotle. They were talking publicly about it while, at the same time, their recruiting process was showing how little support that stance was receiving in reality. So I’m not surprised that there are still people at Google who evaluate themselves and others based on who is technically stronger. What I’m rather surprised about is that they published their findings on team-building because they’re contrary to what they’ve been doing for years.
Would you have fired James Damore?
I don’t know. I haven’t read his manifesto, only comments and discussions. I don’t want to form an opinion based on someone else’s opinion. But there are aspects to the discussion that would make me think of letting the employee go and some I would appreciate as valuable. It all comes down to intent. It’s good when someone acts according to their beliefs and starts a discussion on something they believe is wrong. It would be problematic, however, if behind the intent was a fundamental belief that we’re not equal or that women are less competent in scientific fields or something like that. Let me give you an extreme example. If someone joined Lunar and started voicing racist opinions, that would be unacceptable to me. But there usually is a grey area where it’s not easy to decide what the intent was. Then it’s just the question of anyone’s interpretation.
Also, remember that I cannot just fire someone. In theory anyone at Lunar Logic can fire anyone else but in practice this is a particularly sensitive process. There is a formal part related to feedback in which I would need to face my own projections of why I think someone did something and they would have an opportunity to explain their intentions. And even if afterwards I still wanted to pull the trigger, I’d need to go through an open discussion with the rest of the company. I’m speculating now, but I’d expect that in a situation like this, we’d give someone the benefit of the doubt and give ourselves the chance to believe there was no malicious intent.
Many developers perceive employee’s value solely as a sum of their technical skills. The same mindset makes so many people support the anti-diversity guy and it is why Google hires people like him. We’ve been programmed to do that and it’s damn hard to get out of it.
That scandal was not an exception. Hardly a week goes by without another discrimination incident at a tech company making headlines. What went wrong with our industry?
We still exist in a world in which we’re not treated equally. And that’s in various spectrums: men-women, white people-everyone else, citizens of rich countries-citizens of developing countries, people living in peace-people from war-torn regions. Wherever you look, there’s discrimination. So in that context, the answer to what went wrong is: humanity.
What’s specific to our industry? In early days of programming, it was dominated by women. Then from the 70s onwards, the share of men has been steadily growing and everything that’s dysfunctional about predominantly male groups started emerging. The other thing is that because of male dominance over the past 40 years, we have a totally broken view of what brings value in tech. It’s a vicious circle: the position of men is strong and constantly reinforced by putting more emphasis on traits where men statistically perform better. All of this means that we need to fight for diversity. This isn’t fundamentally different than other industries, though. It’s close to my heart so I fight for diversity here but I don’t think we’re doing that much worse than average.
