Chapter Five

Companies who get happiness.

This is the fifth chapter of the story “The Happiness Table: on fueling growth by understanding happiness in creative companies.” It’s my Advanced Work-Based Project and my final deliverable for my MA in Digital Media at Hyper Island. This post in particular describes companies who “get” happiness and how they do it.

To see the bigger picture, it is important to understand happiness is influenced by purpose (the reason why you exist), process (how you work) and culture (your values and behaviors).

In this post, I am especially looking for answers to these three questions:

1. Which companies are doing well in terms of purpose? And how are they doing it?
2. Which companies are doing well in terms of process? And how are they doing it?
3. Which companies are doing well in terms of culture? And how are they doing it?

The guys from Undercurrent have their own interesting way of visualising the way companies work. They are particularly interested in companies who “get it”. According to them, those companies acknowledge the fact that technology — and software in particular — has had a destabilising effect on traditional business models. More importantly, these disruptive companies understand how they need to use this knowledge to their advantage.

“Today’s fastest growing, most profoundly impactful companies are using a completely different operating model. These companies are lean, mean, learning machines. They have an intense bias to action and a tolerance for risk, expressed through frequent experimentation and relentless product iteration. They hack together products and services, test them, and improve them, while their legacy competition edits PowerPoint. They are obsessed with company culture and top tier talent, with an emphasis on employees that can imagine, build, and test their own ideas. They are maniacally focused on customers. They are hypersensitive to friction — in their daily operations and their user experience. They are open, connected, and build with and for their community of users and co-conspirators. They are comfortable with the unknown — business models and customer value are revealed over time. They are driven by a purpose greater than profit.” — Aaron Dignan, CEO Undercurrent

The Undercurrent OS model.

Their OS describes five nested domains, which means that the domain on the outside will always influence the one(s) on the inside. It is clear that purpose influences process, and both purpose and process influence people.

I can assume that in this model, the word people is used as a metaphor for culture.

“They are obsessed with company culture and top tier talent, with an emphasis on employees that can imagine, build, and test their own ideas. They are maniacally focused on customers.”

It’s all about the people who carry the company’s values and transform them into certain behaviors.

1. Companies who do purpose well.

“People work harder, smarter, and longer when they know their efforts are in service of something bigger than themselves. Without a meaningful purpose acting as a trump card, many operating models break down at scale, as the demands and expectations of shareholders or boards begin to derail the decision-making process in favor of short-term gains … This is not to say these firms don’t value scale, influence, or profitability. They aspire greatly in these areas, but only in service of their vision.” — Aaron Dignan, CEO of Undercurrent

Facebook’s purpose

“Facebook was built to accomplish a social mission — to make the world more open and connected … There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future. The scale of the technology and infrastructure that must be built is unprecedented, and we believe this is the most important problem we can focus on.” — Mark Zuckerberg, CEO

Google’s purpose

“Our mission is to organise the world’s information and make it universally accessible.” — Larry Page and Sergey Brin, CEO and Co-Founder

Medium’s purpose

“We want to give a place that allows everyone to easily share stories and ideas that matter to them and influence others.” — Evan Williams, CEO of Medium

Main thought

The red thread throughout this story is about finding meaningfulness for both business and society. These companies succeed in making money (Medium recently raised 25 million dollars of funding) through adding value to people’s lives (stakeholders and society). Think about Seligman’s Meaningful Life.

The people from Undercurrent are not alone. In No Straight Lines, Alan Moore describes that we have reached an era in which the rules we have previously organised our lives around no longer apply. The world has become way more complex than a couple of years ago and claims that current businesses, organisations and systems are not designed for this complexity. According to Moore, we are facing a design problem and challenge that we must urgently solve by applying social, economic and organisational innovation. Moore makes a plea for a more human-centric world and believes that companies need to design around the needs of the consumer rather than around the needs of the orthodoxies of an industrial world.

During my Strategy and Innovation module at Hyper Island, Business Transformation Consultant Paul McCabe, evangelised the same story. According to him, companies need to embrace three helpful beliefs:

1. non-linear business logic (embracing complexity)
2. internet business logic (embracing internet technology)
3. customer focus (putting the customer at the centre of everything you do)

He even uses Operating Systems as well.

Paul McCabe, OS matrix.

This model is obviously more on a macro-level, but in terms of purpose it hits the same nail. Future successful companies will embrace an OS3-model. They will understand that the why-question is one of the most important questions a company can ask itself, especially if it wants to make employees happier by giving them the feeling that they serve a purpose that is larger than themselves.

2. Companies who do process well.

Hyper Island Manchester

They don’t teach you everything at Hyper Island. In 20 things I should’ve known at 20, Julien Smith claims that you shouldn’t put all your faith in educational institutions. He’s absolutely right. It would be very dangerous to only look at the world from this perspective, even though I sometimes really miss it.

It’s essential to recognise knowledge gaps in your learning journey. When I started working at POSSIBLE, I quickly came to realise that during our time in Hyper Island we were talking a lot about this thing called “process design”. But actually, we were never really designing our own approach of how to work. We were sometimes just randomly doing stuff that felt right. It would’ve been way more interesting if we could have followed a certain approach that helped us focus on important things such as experimentation, autonomy and speed.

“Process is one of the domains most fundamentally impacted by technological disruption. For organizations using a Digital OS, Process is an evolutionary force, and must be managed carefully and with a healthy skepticism. Cultures like Netflix or Valve espouse that if you hire only the best people, rigid Process is unnecessary or even detrimental. They believe that high performers can be trusted to use good judgment, and that the vast majority of mistakes are survivable … Processes that are adopted within Digital OS cultures tend to be focused on experimentation, autonomy, and speed. Words like agile, lean, and user-focused dominate the process conversation.

— Aaron Dignan, CEO of Undercurrent

Big companies are disadvantaged by their size. They are starting to realise that they’re too slow and that their processes have become too “undesigned” for this fast-paced and complicated world that demands constant adaptation. Their whole industry can be easily disrupted by smaller companies (think Sony vs. iTunes vs. Spotify, to give a classic example) because they’re leaner, meaner, think differently and are able to ship faster. That’s why big companies who still want to stay great need to develop a perpetual desire for adaptation.

In his book Antifragile, Nassim Nicholas Taleb, argues that companies should learn how to gain from chaos in order to survive and flourish. According to him, companies should experiment in many different ways. A big percentage of these different attempts probably results into failure — but that is not the point. The important thing is that these antifragile companies learn from failure and know how to improve. And equally important, they know how to embrace and implement the experiments that did work straight away. These types of experiments are highly related to how people work.

One good example of this approach is ustwo.

A photo I took while visiting their studio in London.

I have to point out that, in the example of ustwo, I’m not quite sure if this antifragility leads to business growth because I can’t find any numbers. That is why I am especially interested in well-known innovative companies that are flourishing by experimenting with processes that are relevant for an OS- and not for an industrial world. Which are the companies who have managed to adapt the way they work to non-linear business logic, internet business logic and customer focus? How do they structure themselves? How do teams work? How do they make decisions? What exactly makes them happier working that way?

“Like a start-up, we know that the launch of a product is not the finish line. A digital product is never really finished and requires constant iteration to reach its goals. Which is where the hard work really starts. “

— Stuart Eccles, CTO and Co-Founder at Made by Many

Medium’s process

Medium is building a new kind of company with no managers by applying Holacracy, a real-world-tested social technology that leads to a lean and adaptable organisation, highly effective meetings, clearly distributed authority and purpose-driven work.

“When you sit across a table from someone, ask them ‘What’s going on in your life?’ That will always remove more hurdles than asking them ‘What’s blocking you at work?”

— Jason Stirman, People Operations and Product Design at Medium

Medium’s process values, inspired by Holacracy.

Spotify’s process

Spotify manages to scale while mainting an agile process methodology. They work with Squads, Tribes, Chapters and Guilds in order to stay small, fast, multi-disciplinary and autonomous. This model allows people to learn from each other between Chapters and Guilds. You can read the details in this paper.

GitHub’s process

At GitHub, people work on an open allocation basis — where the biggest requirement is good communication. Unlike traditional companies where projects are assigned top-down, GitHubbers tackle whatever projects they want, without any formal requests or managerial interference.

— Chris Dannen, Senior Editor at Fast Company

Main thought

In my previous post, “A definition of happiness on the work floor”, I came up with the following:

“Happiness on the work floor can be found by adapting the mind to embrace change and uncertainty. It can be found in those who know their own strenghts, crafting their work around these strenghts in order to ultimately be in this thing called flow. This feeling of happiness can even be augmented, when their work serves a higher purpose that is larger than the individual.

Happiness on the work floor can be given by understanding colleagues’ motivations. These motivations could be of any kind: autonomy, mastery, purpose, status, certainty, relatedness, fairness,… The most important is that the right motivations are identified and tapped into.”

The main thought in this story is about finding alignment between the way people work and the drivers behind happiness. These new ways of working don’t only allow antifragile companies to be successful businesses, but also offer a different perspective to how people can feel in a work environment. It is key for leaders to grasp the fact that both could reinforce each other if applied in the right way.

3. Companies who do culture well.

“In a Digital OS, the emphasis on People is all about making. “Makers” are people who have skills (as opposed to credentials). They think by doing: experimenting, testing, and learning. Within these high performance cultures, management has evolved into something more akin to mentorship. The thinking goes, if workers are capable of making decisions about their priorities and workflow, what’s left for the manager is skills development, knowledge sharing, and helping with roadblocks.”

— Aaron Dignan, CEO of Undercurrent

When I had a conversation with Andy Whitlock, Strategist at Made by Many, he told me that a performance culture is made out of two types of people:

“There are two kinds of people. Those who make things and those who make things happen. If you have the feeling that in a certain situation you’re not doing the first, you better make sure you’re doing the second.”

And Aaron Dignan and Andy Whitlock are not alone when they imply that the companies who get it are shifting towards a culture of makers. People in the creative industry are more and more attaching importance to making things. Their values and behaviors have shifted.

“Lots of marketing strategists are increasingly interested in product innovation.”

— Andy Whitlock, Strategist at Made by Many

I understand that these are assumptions, but I have to say that I’ve seen it with my own eyes as well. I personally know a few people (e.g. Tijs Vrolix) who’s job consisted of staying too long in their ivory towers, making big strategy plans and polishing Keynote decks without testing hypotheses and assumptions as quickly as possible. It was almost as if they were doing prophetic planning by looking into a crystal ball and almost never salted their findings via a real scientific approach, realising too late that their ideas, products or campaigns were actually not as good as they had “planned”. It is even more interesting to see how these guys have the hunger to learn from their “mistakes”. They constantly question their priorities, which allows them to reinvent themselves quickly.

Valve’s culture

Valve’s Handbook for New Employees is absolutely amazing. Putting so much time and effort into establishing your personality and character is something other companies could learn from. Valve’s culture is all about making things “shippable”.

Hyper Island’s culture

“Making things” is deeply rooted into Hyper Island’s culture. During my time with my fellow students in Crew 3, many teams believed that showing things that worked were so much more valuable than a perfectly polished slide deck (or why designers should never go to a meeting without a prototype). This year, with Crew 4, the program managers at Hyper have pushed it one step further. They’ve installed a “Maker’s Cabin” in which people could sit and make the right product. Obviously people were allowed to make stuff outside the cabin as well, but that is not the point. The Maker’s Cabin is a visual manifestion of Hyper’s cultural values. It nudges the behavior of making things, and does not manifest itself only on a “value-level”. Writing things down is the first step. Actually living your values is step two, which is way harder.

the Maker’s Cabin

Big Spaceship’s culture

“Every awesome thing you see is like that because someone like you decided to do it.”

— and other examples of making things in The Big Spaceship Manual.

Main thought

Having a culture of making things is about learning, doing, taking initiative, getting your hands dirty, experimenting, having freedom in choices, having ownership of your own ideas and executing them.

If we go back to the definition of happiness, then we can see that there are a lot of similarities between the maker’s culture and happiness on the work floor such as knowing your own strenghts and crafting your work around these strenghts. It’s about being motivated by autonomy (e.g. having the choice what you make and how you make it) and mastery (e.g. knowing your skills, applying them to a new task and crafting something that you’re proud of).

To conclude, I can summarise this post into five important things:

1. Companies who “get it” acknowledge the fact that technology has had a destabilising effect on traditional business models.
2. These companies understand that they need to adapt their model to the pace of this ever-changing world.
3. In order to realise this, they work with an Operating System that focuses on five critical domains: purpose, process, culture, product and platform.
4. Of these five domains, three of them are interesting to look at from “a happiness perspective”. These three are purpose, process and culture.
5. To understand the relationship between these three domains and happiness; and in order to come up with creative recommendations, it is important to craft an overview that somehow visualises the main thought in one coherent model.

This will be my challenge in my next post, which you can read here. It is called “Chapter Six: The Happiness Table.” But of course, you are free not to.

Thanks for reading,

— Thomas