Teal for real 2: Compensation and Value
When I first read Laloux’s book Reinventing Organizations, I was struck by how aligned I felt to the principles and practices he outlines for the healthy organizations of today and the future. Self-organizing, trust, transparency, etc. I remember being slightly skeptical that things were as easy to implement as the book implies, but still quite hopeful that we at The Moment could make the changes required. Then I came to the chapter on compensation.
At The Moment, we believe organizations should intervene on culture with their eyes wide open. Our Teal for Real articles are meant to convey not only what is great and inspiring about going teal but also the trials and struggles organizations may encounter as they implement these new practices. The compensation chapter of our journey is a good one to highlight how much time, effort, and commitment can be required to make changes.
Amongst Laloux’s suggestions is that teal organizations not only make compensation transparent to everyone, but also that teams decide together what each member should make. I am simplifying it here, but you can learn more on the wiki. This is where it feels like the teal organization model becomes radical. This notion of deciding together what pay is appropriate is ground-breaking stuff.
Needless to say, we took our time to begin implementing this aspect of a teal organization. We weren’t initially ready. Compensation is not simple. Because it is measurable and comparable (dollars are easy to count) and money has value, it naturally becomes a reflection of what we value in the people we have. Working like a teal organization demands a fair compensation model. If you’re going to have your model be transparent and non-negotiable and attractive to new talent, people have to see their value reflected in it and see that it is fair. A comp model can make your teal culture or break it depending on what messages it sends and how it supports or hinders your organization’s best work.
If I were setting up a company tomorrow with such a compensation model in mind, it would be simpler. I could draw out the model, test it, then attract the people who feel it is fair. For us, it’s a transition from old to new. Our compensation model had always been transparent, but our model wasn’t rigorous enough to attract new talent and be clear about what you would make if you joined our team. Despite our principled and thoughtful founder team, there was still an element of who can negotiate best at play — mostly because this is how compensation has worked for many decades. Old patterns are hard to shift and even a progressive organization such as ours is not immune from those workplace mental models.
Aside from our desire to create a truly responsive organization, two things are creating some urgency to the development of our new compensation model. First, we have a team member who is changing her work patterns as she completes her masters degree and joins the team full time, thus her compensation will require some happy adjustments. Second, we are growing. Our compensation model needs to be attractive, competitive, and start our team members up right. It needs to honour the amazing team we have and allow everyone (existing and new employees) to feel fairly valued. Third, there are questions about how we are all compensated, and whether it is fair right now. Our little system is crying out for a new model
Discussions have revealed that we need to do a few things:
- Establish and declare what the company values and will compensate more than other things
- Evaluate each member of our team to ensure we are all being paid equitably
Easy, right? We’re a trusting team. We’ve been at the teal thing for a while. Wrong. Not easy. Compensation is an issue that requires a deep level of sensitivity. Creating such a model, and evaluating each other on new criteria is both a logical and emotional endeavour. It would be a mistake to ignore either side of that dynamic. The danger of doing this wrong or clumsily is that we lose members of the team unnecessarily.
For now, we have a plan. We’ve set up a temporary model with which we can welcome our new people in, and that will dissolve June 30th when our new model will be designed and in play. That design will happen during our May strategy week. We don’t want to rush this. It is critical that we get it right. The model defines what we value as a prototype, and is already inviting a good dose of affirmation and criticism — the sign of a great prototype.
I’m confident our team will weather this particular teal storm. The driving force behind my optimism is the avid design spirit that lives on our team. As innovation designers we are human-centred, iterative, and optimistic. Like sunflowers that continually follow the sun as it tracks across the sky we are continually looking for possibility, asking “How might we…” even when and especially when things are difficult. When we tap into that to design something for ourselves, we’ll come out aligned with the result and a better team for having gone through the transition.
In order to understand and act on our evolving culture, we have built a tool for cultural diagnosis and intervention. The Culture Scan is now available, and you can get your free copy and resources here. We hope it will be helpful for you too!
