The New Model for Scaling a Company

As readers of this blog can probably guess by now, going down research rabbit holes, in which one interesting read leads to another, which leads to another, which leads to another – is one of my favorite pastime activities. I find the discovery process just as satisfying and rewarding as the content itself.

This was one of these cases. It started with reading Mike Arauz‘s  Unlocking the Benefits of Self-Management Without Going All In on Holacracy, which led to a deeper exploration of August, the consulting firm that he co-founded and the interesting work he did around the Responsive Org Manifesto, which led to the work by another August co-founder, Clay Parker Jones, which is the topic of this blog (even though I can probably write a separate post on every step in this process):

The New Model for Scaling a Company

Clay addresses the common phenomenon of companies becoming “bad” as they become “big”, and proposes a set of principles that may chart a path for an alternative outcome.

He starts by identifying a 7-attribute Performance Criteria for organizations:

  1. Purpose: The work we do here is important to us and to our customers; We gather according to a clear purpose
  2. Fitness: Those who consume our product believe in its quality; We achieve impressive things together; We make sense in the world
  3. Vitality: Not just fun, but vital, life-giving; Our lives improve as a result of our membership in the organization; We get energy from our work; Our culture is contagious
  4. Fairness: We make decisions taking everyone’s needs and advice into account; There is a strong sense of justice; Everyone in the organization has the same basic rights
  5. Power: More, and more forms of power for all; Power is spread throughout the organization, not just kept in the hands of a few
  6. Connection: Boundaries between teams are permeable; We don’t see our users as outsiders; We offer signals generously so others can learn from us
  7. Safety: People stay in the organization by choice; I won’t be let go for personal reasons; It’s easy to do good work; We have what we need to succeed

He then charts a path for achieving the desired change. I’ll give you a quick taste of the first one:

  • We must replace tyranny with the rule of law:

“Large firms mostly have good corporate governance… these tools actually stand in the way of a true application of the Rule of Law … “governance” typically comes in the form of a standing meeting where a group of subordinates recommend a decision to one or more senior officials, who either say yes, no, or go do more digging. This is tyranny, or at the very least, it’s a feudal approach to organizing human work. The alternative approach is one where we don’t let a single person or a small group make arbitrary decisions that impact a whole, but instead we vest authority in a system”

  • We must replace central planning with market forces
  • We must replace opacity with transparency

Each one of those, is supported by a small set of “even over” statements – choosing to do one good thing, even over another good thing . If that construct sounds familiar, it’s because Holacracy’s approach to strategy is utilizing it as well:

  • Elect even over Select
  • Process even over Decide
  • Describe even over Prescribe
  • Focus even over Help
  • Open even over Closed
  • Pull even over Receive

If I managed to pique your interest, you should definitely read Clay’s full piece.

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The New Model for Scaling a Company

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