OrgHacking 2019 wrap-up

This is my 5th(!) full year of posting a weekly piece in OrgHacking (with the exception of my first deliberate, short hiatus) nearing my 300th(!) post. You can find past annual reviews here: 2018, 2017 (part 1 & 2), 2016, 2015

I’m continuing to evolve the format of this post and this year I’m splitting it into 3 parts: 

Part 1 covers my 2019 reflections/review.

Part 2 highlights my hypothesized “areas of interest” for 2020.

Part 3 lists all my 2019 posts by their emergent category.

Part 1: 2019 year in review

  • I hold my “areas of interest” for the year very loosely, so it’s always interesting to look back at the emergent themes in a year of posts. This year those were: DEI, governance, people practices, personal/professional development, hard science, collaboration, performance and accountability, strategy and broader musings.
  • I expected people practices and personal/professional development to remain key areas of focus for me so I’m not surprised that they remain strongly represented in my writing. 
  • I’m happy that I was able to share more on DEI, putting my raw 2018 intuitions into more coherent points of view and more concrete alternative paths forward. 
  • The original pieces I’m most proud of writing this year were the one on psychometrics and the one on SaaB. The latter was my first attempt in capturing a broader trend in the HR space, dissecting in, and proposing an alternative. The ones on direction-setting and culture are pretty good too (imho).
  • I expected to write more on recruiting and deliberate practice in 2019 and didn’t. I spent a single post on each (Inclusive hiring and VCoLing). Recruiting is just as broken as it was with some incremental improvements. The much-needed paradigm shift, at least in my own thinking about it, hasn’t arrived yet. Deliberate practice may also be a bit further out, but I’m actually more optimistic that we’ll see some breakthroughs on that front in the near future. 
  • I noticed two areas where my perspective of them changed over the year. A small one is captured in the leveling piece, taking a slightly more idealistic stance. But a more profound one on remote work. At Opower, I experienced the collaborative tax incurred and cultural dilution that took place after the company had gone multi-geo pretty early on: first satellite office at under 100 employees and first international office at under 500 employees. As a result, I was pretty strongly at the camp of “giving ground grudgingly” and holding on to co-location for as long as possible. I’ve since then done something pretty close to a 180°: remote/distributed work is happening, so we might as well figure out how to do it well, and the sooner — the better. 
  • The posts that were most thought-provoking for me were around governance and the highly related pieces about performance/accountability. I’m starting to see past the more dogmatic incorporation of certain practices and into the underlying principles, so things are starting to click. A good segue to the next part of this post.

Part 2: 2020 areas of interest

As I previously mentioned, I hold the intention to explore these areas very loosely, but I still see value in stating them because they provide an interesting reference point for reflection. If I take an end-of-2019 snapshot of the things that I’m curious to explore further, these ones come to mind: 

  • Organizational governance, and perhaps more broadly, the paradigms, systems, and practices to manage and distribute power in the organization. 
  • Related but somewhat separate: egalitarian approaches for assessing an individual’s contribution to the collective (aka “performance”) and to allocating their fair share of the collective value generated (aka “compensation”).
  • As a final twist, layering on remote/distributed work on all of the above and making “remote work, work”. We’re already a bit over our evolutionary skies by attempting to collaborate in groups that far exceed the Dunbar number, and now we’re adding another interesting aspect that we were not necessarily innately designed to do well. Not a reason not to do it, but definitely something that’ll require a lot more intentionality in avoiding the pitfalls and learning to do it well.

Part 3: 2019 posts by emergent category

Diversity, Equity, and Inclusion (DEI)

Governance

People Practices

Personal/Professional Development

Hard Science

Collaboration

Performance and Accountability

Strategy and broader musings

OrgHacking 2019 wrap-up

Social Motives[Fiske] + Team Leadership [Carson & Tesluk]

These two pieces of content don’t really go together, but I didn’t have much to say about each of them separately, so I decided to combine them to a single post. They do share a discovery origin story: I came across both of them doing a rather extensive academic research review in the area of social networks analysis. While they were mostly used as scaffolding to support the more relevant research that I was reading about, I found them compelling enough in their own right to make note of them and add them to my ever-growing toolbox of frameworks and mental models. 

Photo by Jehyun Sung on Unsplash

Social Motives

Susan Fiske’s social motives construct is covered in detail in Social Beings: Core Motives in Social Psychology. Fiske’s theory posits that five needs shape an individual’s propensity for social interaction: 

  1. Belonging — the desire for strong stable relationships with others.
  2. Understanding — the need to predict what is going to happen and make sense of what does happen.
  3. Controlling — the need to perceive contingencies between our actions and outcomes, to be effective, in control and competent. 
  4. Self-enhancing — the desire to maintain self-esteem. A drive towards self-improvement and status attainment. 
  5. Trust — the need to see the world as a benevolent place. Expecting good outcomes, especially from other people. 

2 & 3 are more cognitive-based motives, while 4 & 5 are more affective-based motives. 

There are some solid similarities here to SCARF (status, certainty, autonomy, relatedness, fairness), BICEPS (belonging, improvement, choice, equality, predictability, status) and Wilson & Walton’s meaning-making engine (understand, self-integrity, belonging) suggesting either a shared origin or a deeper shared truth about the human condition. 

Team Leadership 

I came across this construct in a fascinating paper called The topology of collective leadership which was using Carson and Tesluk’s 2007 paper as the primary lens to look at different leadership patterns across teams, but I was unable to track down the original piece. So here’s the summary from the paper I did read: 

Carson and Tesluk (2007) observed that there is a large degree of convergence around four distinct roles that are important for team leadership:

  • Navigator — enables the collective to establish and maintain a clear purpose and direction.
  • Engineer — structures the collective and the task, coordinating the contributions of team members to meet the goals of the collective. 
  • Social integrator — maintains healthy and productive social interactions and relational processes within the collective. 
  • Liaison — develops and maintains relationships with key external stakeholders servings as both an advocate and ambassador for the collective. 
Source: The topology of collective leadership (2012)

These distinctions seem to align very well with my own experience and can potentially serve as a good template when we look to “unbundle management”. 

Social Motives[Fiske] + Team Leadership [Carson & Tesluk]

The 4 Layers of Diversity [Gardenswartz & Rowe]

Source: grandenswartzrowe.com

As someone who follows the conversation around Diversity, Equity and Inclusion (DEI) pretty closely, uncovering old and powerful DEI content is always bitter-sweet. Bitter, lamenting the lost knowledge and the wasted time, effort and energy working with a partial knowledge-base which often generates inferior solutions. Sweet, experiencing the joy of rediscovery, coherence, and having a tool that is clearly better than what is being used today. Such was the case with Katz & Miller’s Conscious Actions for Inclusion and such is the case with Gardenswartz & Rowe’s 

4 layers of diversity 

Lee Gardenswartz and Anita Rowe have been doing work in the DEI space for more than 50 years now (since 1977). The model, in its most recent incarnation, was developed in 2003 with older versions tracing back to 1991. It is the most comprehensive model I’ve seen to date which defines the various dimensions of diversity, dividing them into 4 layers: 

  • Level 1: Personality — which I’ll further break down into the big-5: openness, conscientiousness, extraversion, agreeableness, neuroticism
  • Level 2: Internal Dimensions — age, gender, sexual orientation, physical ability, ethnicity, race
  • Level 3: External Dimensions — geographic location, income, personal habits, recreational habits, religion, educational background, work experience, appearance, parental status, marital status.  
  • Level 4: Organizational Dimensions — functional level, work content field, division/department/unit/group, seniority, work location, union affiliation, management status. 

The breadth of this model makes it easier to see that the current dialogue around DEI is mostly focused on most of the internal dimensions and a handful of the external dimensions. And intersectionality is viewed as pertaining only to this subset of attributes. 

Yet, discrimination, bias and power dynamics exist, in varying degrees, across all attributes. And the promise of true diversity exists across all of them as well. 

There is another thing that I find compelling in this model: Its universality. I can’t think of a single person who was never in a situation in which they found themselves under-represented (at best) or discriminated against (at worst) in at least one of these attributes. The fight for DEI is a universal fight. We all have a reason to fight it and a role to play in it. 

The 4 Layers of Diversity [Gardenswartz & Rowe]

The Community Canvas [Pfortmüller, Luchsinger, Mombartz]


Source: community-canvas.org

In both professional and personal settings, there’s a growing understanding of the critical role communities play in our lives. The next step after buying into this premise is to start exploring how once can be more intentional in shaping those communities and monitoring their health. Similar to culture, while there are no good ones and bad ones, there are strong ones and weak ones. What sets the former from the latter is the degree to which the various elements that shape a community are defined and in alignment with one another. While much has been said and written on the topic, none competes in clarity and comprehensiveness with the work Fabian Pfortmüller, Nico Luchsinger, and Sascha Mombartz did in creating the

Community Canvas

The Community Canvas is a framework for creating, analyzing and improving communities. It lays out all the elements that define a community in a coherent canvas format. 

The canvas is divided into three main sections, each in-turn is broken down into more specific themes: 

Section 1: Identity — who are we and what do we believe in?

  • Purpose — Why does the community exist?
  • Member Identity — Who is the community for?
  • Values — What is important to us as a community?
  • Success Definition —  How does the community define success?
  • Brand — How does the community express itself?

Section 2: Experience — what happens in the community and how does it create value for the members? 

  • Selection — How do people join the community?
  • Transition — How do members leave the community? 
  • Shared Experiences — What experiences do members share? 
  • Rituals — What rituals happen regularly? 
  • Content — What content creates value for members? 
  • Rules — What are the community’s rules? 
  • Roles — What roles can members play?

Section 3: what gives us stability in the long-term? 

  • Organization — Who runs the community? 
  • Governance — How are decisions made in the community?
  • Financing — What is the community’s plan to be financially sustainable? 
  • Channels & Platforms — What channels does the community use to communicate and gather? 
  • Data Management — How does the community manage the data of its members?

Thinking about a particular community that you are part of, makes it easy to see the framework’s strength (and minor weakness) — Themes with clear and well-defined answers are areas in which the community is strong. Themes with no-so-clear answers, present opportunities for strengthening the community. My one nit of the framework is that while it’s fairly comprehensive, it’s not perfectly MECE some themes seem to have some overlap between them so there’s a structural opportunity to eliminate this overlap and likely simplify the framework a bit in the process. 

The Community Canvas framework is supported by a set of resources such as high level 7 — page summary of the framework, a more detailed 61-page guidebook, and a set of additional templates.  

If you are a community manager, aspiring to create a new community, or just an engaged community member, the Community Canvas is a must-use. 

The Community Canvas [Pfortmüller, Luchsinger, Mombartz]

Steward Ownership [Makkonen]


Photo by Derek Thomson on Unsplash

Juho Makkonen is the founder and CEO of a Finnish company called Sharetribe and his unique perspective first came across my radar in a more recent post he’s written about shifting the licensing for Sharetribe’s product from “open-source” to “source available” (Specifically, from MIT to Sharetribe Community Public Licence), closing a big, exploitative loophole in the standard open-source license by preventing organizations that utilize their code to use it in a product that competes with the company who made the code available in the first place. For example, if you’ve built a web browser and made its source code available, under an “open source” license another company can just take that code and build a competing browser with it, while under a “source available” license, it can’t.

Smart. Thoughtful. Progressive. The kind of impression that often leads me to an “I wonder what else they’ve written about” inquiry. And I was up for a big, pleasant surprise.

You see, a year ago, Jujo wrote a profound piece called

Steward-ownership is capitalism 2.0

In the post, Juho outlines how he restructured the governance structure of Shaerscribe to ensure that the company stays true to its purpose and not succumb to the pervasive profit and shareholder value maximization paradigm.

The new structure consists of 4 key pieces:

1. For-purpose corporation 

In most countries, the default articles of incorporation require the management team of an organization to use the maximization of shareholders’ profit as the north star in corporate decision making. Failure to do so can make managers liable to a lawsuit for violating their fiduciary duty. Sharescibe made an explicit change to their corporate bylaws overriding the default with the following: “The purpose of the company is to democratize the sharing economy. The company aims to foster an economy where resources are utilized efficiently, created value is distributed fairly, and people have control over the conditions of their work.” So in cases where there’s a conflict between making a profit and pursuing this purpose, management is not legally bound to abandon the latter for the former.

Furthermore, acknowledging that the purpose, as it is defined today may evolve over time, Sharescribe created the option of changing the company’s official purpose as long as the people owning two-thirds of the company’s voting shares support it (with an important caveat we’ll cover in part 4).

This governance piece is not too novel in and of itself. It is very similar to other progressive governance structures like Public Benefit Corporations that also eliminate shareholder primacy. But it gets more interesting when tied with the other pieces.

2. Employee ownership (voting rights)

Sharetribe aims to be in control of the people who hold active roles in it. Namely, its employees. Therefore it is governed by the people working in it, guaranteeing that the management of the company will be in the best interests of employees and all other stakeholders. At Sharetribe this is done by issuing 4 types of shares:

  • Class A — voting rights shares (not entitled to a share of the profit) — available only to employees and people in a service relationship with the company. Must be sold back to the company at a nominal cost if the relationship is terminated.
  • Class B — a single veto vote share granted to a foundation (see part 4)
  • Class C — profit-sharing shares (no voting rights) — given to investors (see part 3)
  • Class D — profit-sharing shares (no voting rights) — given to employees (see part 3)

3. Reliable returns — Redeemable shares for investors and employees (no bonuses, no dividends)

To avoid the “go big or go home” financial returns pressure that’s inherent in the standard VC model, Sharetribe opted for a different funding model:

Sharetribe offered its investors to buy (Class C) shares at the company at 20 Euros a piece. In return, the company commits 40% of its annual profit to redeem these shares at 100 Euros a piece (x5 return) until they have been fully redeemed. If the shares are not redeemed within 10 years, 100% of the company’s annual profit will be directed towards redeeming the outstanding shares. Sharetribe currently estimates that they’ll be able to redeem all outstanding shares within 7–8 years.

Juho walks through the economic business case for investors in using such structure which essentially boils down to the lower per-company return being offset by the lower failure rate, yielding the same average returns as a high-returns high-failure-rate portfolio.

In many ways, this is similar to the funding and investment strategy pioneered by indie.vc in the US.

However, Sharetribe also opted to extend this model even further, and use the same vehicle with its employees as well, granting them Class D shares rather than the typical ISOs or RSUs since the liquidity event that such vehicles depend on (IPO, acquisition) is no longer possible. The Class D redemption schedule is designed in a way that most of it take place after the Class C shares have been fully redeemed. It’s not fully clear whether this mechanism is meant to be a permanent part of the compensation scheme, or just be a “one-time” fix to compensate the founders and early employees for accepting below-market wages in the early days of the company. If it’s the former, transitioning to a profit-sharing scheme like the one outlined here may be in order.

4. Safeguarding the structure — veto shares held by a foundation

The final piece in the puzzle is ensuring that the transition to steward ownership is permanent. History has shown that changes in management can pose a risk to maintaining the steward ownership governance structure and open the door for reverting back to a more conventional governance mode.

To address that risk, Sharetribe granted a (Class B) veto voting share to a foundation with no economic stake in the company. This veto share can only be used to veto any change in the company’s articles of association that would attempt to dismantle the steward-ownership structure. The foundation is bound by its rules to veto any such change, and whoever is on the board of the foundation must respect these unchangeable rules.


Stepping back, it’s easier to see how these four pieces fit together.

While no governance scheme offers full immunity to the “human condition” in addressing challenges such as negligence, illegal activity (corruption, bribery), etc. the steward-ownership implementation outlined above seems to masterfully address some of the more systemic issues with conventional capitalism governance structures.

Steward Ownership [Makkonen]