Towards healthy power dynamics at work [Bartlett]

These are 2D representations of the same 3D shape. Left: “friendly circle” (top); Right: “evil triangle” (side).

“Contrary to what we would like to believe, there is no such thing as a structureless group. Any group of people of whatever nature that comes together for any length of time for any purpose will inevitably structure itself in some fashion. (…)

“As long as the structure of the group is informal, the rules of how decisions are made are known only to a few and awareness of power is limited to those who know the rules. Those who do not know the rules and are not chosen for initiation must remain in confusion, or suffer from paranoid delusions that something is happening of which they are not quite aware.


— Jo Freeman, The Tyranny of Structurelessness, 1970

A colleague recently reminded me of the “bounded specialization” piece I wrote about a year and a half ago. It was written during the short break that I’ve taken in between AltSchool and Grammarly in a cabin at the Gualala hills overlooking the Pacific ocean. It is one of my pieces of writing that I am still most proud of. Serendipitously, I’ve been thinking and reading a lot about hierarchies lately. From “The functions and dysfunctions of hierarchy”, through “Why hierarchies thrive”, to “In praise of hierarchy”. But none was as elegant and compelling as Richard D. Bartlett’s 2-part series on hierarchy and power dynamics: 

Hierarchy is not the problem (Part 1)

11 Practical steps towards healthy power dynamics at work (Part 2)

He starts by diffusing some of the loaded reactions that hierarchy tends to trigger, reminding us that that the term itself is just a useful metaphor to efficiently explain that this is contained by that:

If you tell me you hate fruit, I know not to offer you an apple. It would be impossible to make sense of the world without these hierarchical relationships.

Bartlett argues that the obsession with “hierarchy vs. flatness” is an unhelpful distraction from the issue that really matters, which is power dynamics. He builds on Mary Parker Follett’s distinctions to define 3 types of power dynamics: 

  • Power-from-within or empowerment — the creative force you feel when you’re making art, or speaking up for something you believe in
  • Power-with or social power — influence, status, rank, or reputation that determines how much you are listened to in a group
  • Power-over or coercion — power used by one person to control another

With those in mind, he defines the approach to power dynamics that we actually strive for and often hides behind the hierarchy-related language:

Maximize power-from-within, make power-with transparent, and minimize power-over

Note the directional and relative (as opposed to absolute) language that’s used to describe this aspiration. The more descriptive articulation of that aspiration is also worth including here: 

  • Maximize power-from-within: everyone feels empowered; they are confident to speak up, knowing their voice matters; good ideas can come from anywhere; people play to their strengths; creativity is celebrated; growth is encouraged; anyone can lead some of the time.
  • Make power-with transparent: we’re honest about who has influence; pathways to social power are clearly signposted; influential roles are distributed and rotated; the formal org chart maps closely to the informal influence network.
  • Minimize power-over: one person cannot force another to do something; we are sensitive to coercion; any restrictions on behavior are developed with a collective mandate.

In part 2, Barlett outlines specific behaviors and practices in support of this aspiration, which I’ll only include here in their headline form: 

Maximize power-from-within

  • Encourage your peers
  • Discourage “permission-seeking” 
  • Create practice spaces
  • Find your mentors
  • Rotate roles

Make power-with transparent

  • Break the power taboo
  • Name the level of engagements
  • Limited decision mandates

Minimize power-over

  • Consent-based decision-making
  • Celebrate dissent
  • Share the ownership

This framing strongly resonates with me and the mapping of specific practices and behaviors to the key pieces of healthy power dynamics is really powerful. The next here would be to explore some of the nuanced tensions between these practices and their implications. 

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Towards healthy power dynamics at work [Bartlett]

The Flipped Workplace [Baum]

Well, not quite as literally as that but still…

One of the things I’m most grateful for in my AltSchool experience has been learning to look for solutions in the progressive education domain for problems in the organization design domain. 

Granted, there is still much to fix in our current education system. We talk such a big game about innovation, especially in Silicone Valley, but the “science of learning” has had much more breakthroughs and progress over the last two decades than the “science of working”. I’d also guess that at any given moment there are more experiments in learning differently than there are in working differently. 

Therefore my immediate reaction to Allison Baum’s 

Now is the time to implement the flipped workplace at scale

was “Duh. How come nobody else saw the parallels sooner?”. 

In the workplace, office space design and remote work continue to be hot button issues with plenty of media debate around them, and thankfully, a small trickle of credible academic research that’s starting to surface some interesting insights. While some companies opt for a more extreme perspective of either eliminating remote work altogether or being 100% distributed, most companies try to find a healthy medium between the two. At the core of the debate is the tension between individual work, which is location agnostic and benefits from an environment that is optimized differently by different individuals, and collaborative work, which benefits greatly from co-location and consistent environment design that fosters serendipitous interactions and collaboration. While both types of work are critical for business success, typical organization and space design force a trade-off between the two. 

Now comes Baum’s a-ha moment: Guess what? This challenge is not limited to the work environment, it’s also an issue in the classroom. Effective learning requires both individual work and collaborative work, so learning institutions have grappled with the same tension for decades now. One solution, implemented in multiple variations in some institutions in the “flipped classroom” model. Here it is in a nutshell: 

And in Baum’s own words: 

Instead of listening to lectures in class and doing homework at home, flipped learners watch lectures and read at home and then use class time to ask questions and practice applying their learning. Teachers are no longer instructors; they are coaches. Peers are no longer distractions, but collaborators.

You may already be connecting the dots and seeing the parallels but Baum paints an even clearer picture for us: 

Productive individual work is done outside of the office, on your own time, in your own place, at your own pace. Consequently, the office transforms into a space purely dedicated to meeting people, asking questions, brainstorming, and making unexpected connections. Liberated from enforcement of time-based productivity, managers don’t need to be babysitters. Instead they are coaches, enablers, and facilitators focused on unlocking each employee’s unique value to the entire organization.

The “flipped workplace” seems like a great way to thoughtfully navigate the tension between the poles, rather than collapse the solution towards one of them and lose all the benefits of the other. And Baum does a great job making the case for that:

A flipped workplace is better for both employers and employees because it optimizes for productivity, not presence. A universally accepted flexibility of structure makes true diversity possible by accommodating the varying styles, strengths, and constraints of employees. Balancing remote work with in-person collaboration ensures cultural cohesion, creating an environment of momentum and trust when in the office.

The Flipped Workplace [Baum]

Holistic Compensation [Barry]

Source: Nathan Barry

Stumbling upon Nathan Barry’s piece, which was referenced in one of the various newsletters that I’m subscribed to, was such a pleasant surprise!

Why I changed my mind on team stock options

 Note that I’ve picked a very different title to my own post, because I’m taking his content in a different direction. But first, a bit of context. 

Compensation matters

Compensation in my mind represents a core attribute of the professional collaboration effort that we call work. The fact that we’re not only trying to do something together, but we’re also trying to distribute the benefits of doing so in a fair way adds a massive amount of complexity to the effort. The thought exercise I always like to go through when thinking about large-scale collaboration efforts (aka work) is “would this still be a problem on an open-source project?”. Open-source projects are massive collaboration efforts in which the primary value that contributors expect out of the effort is the work product itself, which in economic speak is “non-rivalrous”: its use by one contributor does not prevent its simultaneous use by another contributor. Revenue, on the other hand, is a perfect example of a rivalrous good: if I take a dollar out of the pile, it’s one less dollar that can be distributed to anyone else. And that makes things, well… complex. 

Which is why I’ve spent several posts writing about it covering aspects such as the foundations of a good compensation philosophy, the implications of pay-for-performance, the tension between internal and external fairness, the varying levels of transparency around comp, the challenges with equity, and several others. The latter in particular is a good jumping off point to Nathan’s post. 

A holistic approach 

Recognizing similar challenges in the use of equity to the ones I (and Henry Ward of Carta) called out, Nathan initially decided to avoid using equity grants altogether in his startup, ConvertKit, and instead implemented a revenue/profit-sharing system, which we’ll dive deeper into in a moment. Nathan’s post, however, covers his decision to supplement the profit-sharing program with some old skool equity grants. His decision was primarily driven by fairness, recognizing that company value appreciates faster than profits and therefore withholding equity grants leaves his team significantly worse off in the long-term. Nathan’s new and holistic approach, beautifully captured in the 2×2 at the top of this post is in my mind the biggest generalizable lesson from his experience: recognizing the fair compensation needs to span to distinct dimensions, the long-term/short-term and the guaranteed/success-based leads to the conclusion that a different compensation instrument is needed in each quadrant. 

I believe this 2×2 is a great blueprint for other organizations as well, with a couple of tweaks, one mechanical and one philosophical. 

The mechanical tweak has to do with venture-backed companies, who tend to not turn a profit for quite some time. Without fully opening pandora’s box on that matter, profit in Nathan’s framework is simply a proxy for the company’s success. So in situations where it’s not a good proxy, a portion of revenues can be allocated proportionally to a more adequate success metric (revenue target, user growth, margin improvement, etc.). 

The more philosophical tweak has to do with “performance-based” which I’ve replaced with “success-based” since performance is also one of the key challenges in my mind, with ConvertKit’s specific profit-sharing implementation. 

Profit-sharing

In its latest iteration ConvertKit’s profit-sharing system works as follows: 

A fixed % of profits is distributed to the team every 6 months (the remainder goes to taxes and reinvested back in the business). 

That pool is distributed across 3 categories: 

  • 52% — Team profit sharing
  • 8% — Leadership bonuses
  • 40% —Ownership distributions

Team profit sharing is further allocated as follows: 

  • 25% (13% of total) is allocated based on tenure: your share = your tenure/sum of all tenures
  • 75% (39% of total) is allocated based on individual 0–4 performance rating: your share = your score/sum of all scores

The payout for new hires who started in the last 6 month is pro-rated to the portion of the period they’ve been with the company (3 months = 50% of your share). 

There are no details on the “ownership distributions” so I won’t engage on that. 

But both the “leadership bonuses” and the performance component of the team-profit sharing don’t sit well with me as I strongly believe that rewarding short-term performance does more harm than good (more on that here and here). Furthermore, I don’t think that “leadership”/execs are special snowflakes that require special treatment more than engineers are. They just have a proportionally higher impact on the success of the business, just like a tech lead will have proportionally more impact than an entry-level engineer, and that needs to be baked into the allocation. This is also where the logic behind the decision to ignore salaries, because “salary is a reflection of your market value and not exactly your value to the company”, breaks. While potentially correct looking cross-functionally, there is proportionality between salary and value to the company within a given function. 

Better aligning the allocation with my own compensation philosophy is pretty straight forward. First, eliminate “leadership bonuses”. Second, replace the performance component with a factor that’s proportional to salary. A more egalitarian alternative would be a factor proportional to level, and somewhere in between is applying role-specific factor (a-la Buffer) on top of the component proportional to salary. Further carve-outs to either company value or personal needs drivers can be done similar to the way tenure is handled. 

In Sum 

ConvertKit’s holistic compensation approach represents an important step-function improvement to the default compensation schemes that are out there, and with a few tweaks to the profit-sharing mechanics can be aligned with everything science tells us about the connections between compensation, fairness, and motivation. 

Holistic Compensation [Barry]

The Feedback ↔ Self-Reflection Polarity

Feedback has been a recurring theme in this publication (“Affirmative feedback” and “staying on your side of the net” are good examples) and following the debate I briefly mentioned in “Wise Interventions” I serendipitously came across and authored posts around self-reflection (“Care Pods” and “Cognitive Journaling”).

To catch everyone up to speed, I was having a conversation with a group of colleagues on “the limits of feedback” which really got me thinking. We spend a great deal of time building “cultures of feedback” in our organizations. But can these cultures have a downside?

The case for feedback

A quick glance at the Johari window makes the case for feedback quite clear: 

We all have blind-spots, insights about ourselves that are known to others but are not known to us. Feedback is the mechanism to disclosing those blind spots, which in turn allow us to build a more accurate picture of ourselves to drive our growth and development. 

Furthermore, as Adam Grant pointed out, our own capacity for self-reflection is bounded and imperfect:

Sixteen rigorous studies of thousands of people at work have shown that people’s coworkers are better than they are at recognizing how their personality will affect their job performance.

Lastly, since we’re talking about feedback in a professional context, with the intent of collaborating better together, how others perceive us and react to us matters just as much (if not more) as we perceive ourselves. This in and of itself is a good enough reason to pay attention to feedback and to take it into account. 

The case for self-reflection

Despite the compelling case for feedback, it’s not without its shortcomings. 

To reference the Johari window again, some of our knowledge of ourselves is only known to us (“hidden area”) so any feedback will be based on partial information and will, therefore, be incomplete and inaccurate.  

Furthermore, delivering good feedback requires a high level of mastery, from avoiding projecting our own values and beliefs on the person receiving the feedback to only addressing the things that we can credibly observe and know (staying on “our side of the net”). 

Lastly, while self-reflection and self-knowledge will never be perfect, our ability to more accurately know ourselves and how we impact others is a learnable skill, a muscle that we can build. An environment abundant with feedback or a culture focused only on feedback will crowd-out any motivation to strengthen that muscle and will leave it weakened and atrophied. 

So which one is it?

Astute observers will recognize the patterns of a polarity in the tension between self-reflection and feedback. Therefore, the answer is not an either/or one but a both/and one. We need to create cultures that help our teams build both their feedback muscles and their self-reflection muscles. Favoring one at the expense of the other will lead to a sub-optimal outcome. 

Side note: for those of you looking for a deeper scientific analysis of this tension, Timothy Wilson and Elizabeth Dunn’s Self-Knowledge: Its Limits, Value, and Potential for Improvement may be a good place to start. 

The Feedback ↔ Self-Reflection Polarity