Week 26, 2021—Issue #158
How The Ready Works: Participatory Governance, Compensation Stacks, and Market-Based Dynamic
Each week: three ideas on the future of work. This week: a case study from organizational design firm The Ready.
My company — MAQE — is changing and I’ve been writing about Haier and Zappos in an effort to learn from their examples. Both make for fascinating case studies. But context is important. And it’s vital to remember that both are substantially different from MAQE.
MAQE is a relatively small professional services firm with about 80 people. Zappos is a product company with 1,500+ staffers (primarily) in Las Vegas, Nevada. And Haier… well… Haier is one of the world’s largest white-goods manufacturers with more than 80,000 people worldwide.
Inspiration can and should come in many forms. Enter The Ready — a 25-person organizational design firm that bills itself a “laboratory for the future of work.” No hyperbole. As founder and CEO Aaron Dignan recently explained at Teal Around the World, it’s an apt moniker:
My highlights are below:
1. Participatory Governance
Despite being a relatively small organization, The Ready has a well-defined governance process that would put a lot bigger organizations to shame. Whenever a team member experiences tension of some sort, they can submit a proposal for how it might be addressed. A consent process then works to clarify, refine, and guide the proposal towards adoption. To date, the company has implemented 35 agreements using this process, addressing topics such as decision-making and compensation strategy.
2. Compensation Stacks
Speaking of compensation, team members at The Ready are free to set their own salaries — a radical notion facilitated in part by the fact that each member operates as a one-person consulting firm. Yes, all members receive a fixed base salary. But anything beyond that base requires that members take on client work and/or assume one or more internal roles. This latter part of the ‘compensation stack’ is variable and under member control in that everyone is free to set whatever ‘billable rate’ they feel is appropriate.
3. Market-Based Dynamics
Enter Market-Based Dynamics — a term I’m borrowing from Zappos to help explain the system of economics that The Ready has in place. Unlike most other services firms that staff projects centrally, The Ready has created an internal marketplace where members bid for engagements. This marketplace, coupled with the fact that members set their own billable rates, effectively means that members are in full control of the variable part of their compensation stack.
Long-time readers will know Aaron Dignan as the author of Brave New Work — a book about the how and why of the future of work and organization. The book was published in 2019 and it’s refreshing to now see that Aaron and the team actually practice what they preach:
For organizations to survive in this ever-changing world, we believe they need to be both people-positive (acknowledging that people are fundamentally trustworthy, motivated, and can self-manage) and complexity-conscious (acknowledging that being able to predict or control what will happen is folly, and that plans are lies committed to paper).
The Ready’s governance process, its compensation stack, and the manner in which it leverages market-based dynamics are all designed with these beliefs firmly in mind. This is their answer to the challenges they face in their context. And it’s something the rest of us can learn from.
That’s all for this week.
Until next time: Make it matter.