Travelogue Part 4/4: The Evolutionary Purpose

Here you can read part 1/4, part 2/4, and part 3/4. This article is also available in German.

When I was thinking about the purpose of life in the past, I had this one purpose in mind that one needs to discover in life. For me, this task seemed too big to ever be able to achieve it. Today, I view things differently. The purpose of life is multi-layered, constantly changing, and does not need to be defined once and for all to give life meaning.

The same applies to companies because, in essence, a company is nothing else than an organism that follows an inner purpose. Companies are founded to fulfill a purpose.

1. Finding Purpose

When /gebrüderheitz was founded, that did not seem to be the case. We did not have a big vision that we wanted to change the world with. The agency was created because my brother Claudius and I simply saw synergies - he is an information scientist, I am a designer. Together, we can create additional value for our customers. That’s also the way we described it on our website: Our slogan was, “We combine solid technology with an appealing design.”

Soon after the company’s foundation, we already had the first employees on board. This posed the question for us how we wanted to shape collaboration. Agencies are known for overloading and exploiting their employees. That’s what we didn’t want to do, of course. And that’s how we discovered an element of the purpose that we have been pursuing ever since: organizing work in such a way that it makes us happy. Until today, this has been an important part of the purpose of our existence. It is expressed in our company value of “Happiness”. This purpose led us into the direction of a teal organization.

2. Sense and Purpose

It took years for me to understand another, deeper sense of the existence of our agency. We are not a startup that sets a specific goal for itself, such as, e.g., Tesla: “to accelerate the advent of sustainable transport” and so on. We are service providers - and that we are with all our hearts. It is our purpose to help our customers. With our skills, we want to support them in achieving their goals. That’s what it says on our website today.

So it is our purpose to enable our customers to achieve their goals. That’s why it is important for us to understand those goals in order to achieve a successful collaboration. We need to know what our customers want to achieve and why so that we can support them meaningfully. For this reason, we take time in the first conversation, during the project, and after its completion to properly get to know our customers and their needs.

It’s self-evident that it especially motivates us when we find those goals worthy of support. I think that a strong purpose has an enormous power to inspire humans. That’s why we pay more and more attention to whom and what we are supporting. We are currently in the process of getting certified as a B Corp to better express this mindset.

3. Change of Purpose

When understanding the development of our company as a journey, the purpose is like a compass. With each new junction, we can be oriented towards it: is this path in accordance with our purpose? From time to time, it’s also important to ask whether the common purpose has changed. In any case, I am sure that the purpose will change and develop on our journey.

For example, I am currently observing a great excitement among the team to tell others about our company. Who knows, maybe we will, in the future, offer other organizations some sort of “travel companionship” for the journey towards teal? Or we might develop tools that can support companies working remotely. Or we will do something completely different. I don’t know, and I don’t need to know. I don’t feel the need anymore to push the company towards a certain direction or predict the future. The company is 11 years old now and thus old enough to make its own decisions.

A few weeks ago, Sandra held a vision workshop for the whole team. Since we are on a journey, she structured the workshop around the topic journey. She asked us to draw postcards with sights on the “journey” of our company. I liked that a lot.

I had turned it over in my mind and asked myself what I wanted to see. And then I realized that I was actually just curious about what the others wanted to see but didn’t have an agenda of my own. I felt like a parent staying at home and feeling happy about their children’s incoming postcards.

I am very excited to see where the journey will lead us and keep being curious and open about how /gebrüderheitz will develop.

BackHub got acquired – Tribute to a teal minded team

It’s finally public: our company BackHub got acquired by Rewind, a Backup as a Service provider from Canada. At BackHub, we are offering cloud to cloud backups for GitHub repositories. We have started it as a sideproject about seven years ago and were able to turn it into a successful SaaS business without any external funding.

I want to take a moment to reflect on what I think made BackHub successful from my perspective as teal minded entrepreneur. I’ve never mentioned BackHub in the context of this blog, because it never occurred to me, that it actually was a Teal Organization. I didn’t try to apply any self-organization framework or teal leadership principles here. After all, we were just a team of three. I realized however, that a lot of what I’ve learned about self organization and teal leadership, does in fact apply to BackHub as well. We have just been doing these things naturally and I believe this was part of our success.

The emphasis is on “natural”. At BackHub, things felt natural to me. We didn’t have fixed working hours, no formal procedures, no hierarchy, no overhead. It’s a lean team with an enormous output, good habits, focussed on the essentials, always making sure to provide value to our customers.

I think the challenge for leadership really is to preserve these good qualities of a small team on a larger scale, so people can do great work without management getting in the way. My theory is that a teal organization should feel like working in a small team, even on a larger scale.

So let’s have a look at how we’ve been working and how the principles of a Teal Organisation apply to us as a team. The three pillars of a Teal Organization are:

Self-Management

What does self-management actually mean? It means the team organizes itself without the need of a manager. Even in my formal role as the CEO, I never had to force a decision. I believe this is because we’re all very close to the customer. There is a sense of ownership. All we want is offering a great service. Everything that needs to be done, is naturally derived from this attitude. The more people get away from the customer in an organization, the more “management” is needed.

Okay, so we don’t need management. But how about leadership? Even leadership just emerged, depending on the situation. Sometimes it was Chistian who inspired us with a pioneering idea on how to do things radically different. Or it was Steffen, who’s a master in the art of continuous delivery, relentlessly making small but meaningful improvements. Or it was me with the latest customer story to guide us building a great product that customers love.

We also applied the advice principle naturally. Someone in the team wants to make a decision and asks the others for advice. Pretty natural in a team of three. When I had an idea for the product, I was asking Steffen and Christian for their opinion. It boggles my mind why and how this get’s lost in larger organisations. I’m on a mission to find out, but more on that in another article.

When I apply the advice principle, there is no insecurity about whether I’m “allowed” to do this or not. So much of what we call “insecurity work” falls away. I feel a need to change something, I can go ahead and change it with a sense of mission and urgency. There is no management getting in the way, no gatekeeper I have to convince. You might think this will eventually lead to poor decision and catastrophic failure. It doesn’t. The rule is, you have to seek advice from people who have experience in the matter and from anyone who might be impacted by your decision (including the customer!). Again, in a small team this is what you do naturally. But can this work in a large organisation? Sure it can! The company which actually defined this principle is a Fortune 500 with more than 8000 employees.

Wholeness

Christian, Steffen and I have been working together for more than 10 years now. We’re more than just a bunch of professionals who get together in order to get some work done. We’re friends. I think friendship is a good guide on what “wholeness” can mean in an organization. With a friend, I can be totally open about how I am feeling without fear of judgement. There is nothing I need to fake or hide. I don’t need to play the strong guy while in truth I have a moment of weakness and insecurity.

What’s important to me is that we are all familiar with Nonviolent Communication. NVC has become a life philosophy for me and I’m not surprised to see it on the rise in business as well. Building a company can be a tough ride. Being able to handle your feelings and needs and understand the needs of everyone in the team is key to survive. There are lot’s of things we could have fought over. We had moments of despair and frustration, and I remember we were close to giving up several times.

In those moments however, we’ve been able to support each other compassionatly. We helped each other to identify the need behind something that troubled us, and found effective strategies to meet the need. Sometimes those strategies were quite unusual. For instance, I remember that Christian had a need for more stability and so he decided to do a full time job at another company for a while. I could have raged about him leaving us alone in the mess, but I was clear about his need behind his action and was able to accept it.

In the context of Wholeness, I also want to mention the values we had identified while working at /gebrüderheitz together: Simplicity, Openness, Pioneering, Learn-To-Fail and Happiness. Having strong values can be a great guide when orientation is needed. Do we really need this feature? Nope, better keep it simple. Are we going to publish this as open source? We publish it, because we’re open. Can we do this radically different? Sure, let’s pioneer a new way.

Evolutionary Purpose

Lastly, let’s have a look at the Evolutionary Purpose. This is an interesting one, as it wasn’t so obvious to me for a long time, what the actual purpose of this business was. It got more clear to me, when we were participating in the German Accelerator Silicon Valley last year. Our mentors said it’s a lifestyle business we had built. Christian and I liked to call it a freedom business.

When we started out, our goal really was to build passive income. I remember getting excited when the first customer signed up and we had a $9 dollar passive income stream. Nothing is really passive however, and even a side project needs constant care. So in the end, we thought it’s probably best to cash in at some point and turn our freedom business into actual financial freedom (financial freedom is an illusion - the only real freedom comes with Demonitization). Anyway, the goal to reach financial freedom helped us to identify the right moment to sell and to come up with a selling price. Based on the 4% rule, we calculated how much money we needed to financially retire. We told Rewind this number during negotiation and in the end they were willing to pay that amount, so we closed the deal.

Now, besides this very personal purpose of our business, I acknowledge that BackHub also has an inherent purpose of its own. In the teal mindset, a company is considered an organism after all, and an organism has it’s own will and sense of purpose. BackHub’s purpose clearly is to protect our customers data from data loss. Therefore, it was important to us, to eventually find a buyer who is aligned with this purpose. We wanted to be sure to find a home for BackHub, where it can grow further and fulfil it’s purpose and full potential. I believe, with Rewind we have found the right company to do exactly that and so I’m very grateful that things have turned out well for us as a team, for BackHub as a business and for me personally.

We’re now working as a team inside Rewind to help with the transition, transfer know-how and expand to other git platforms. In the long run, I’ll continue to pursue my purpose of building teal economy and will likely build another business that is aligned with this purpose of mine. Stay tuned.

Travelogue Part 3/4: Search for Wholeness

Here you can read part 1/4 and part 2/4.

“Search for Wholeness” is the aspect of the Teal Organization which sounds a bit esoteric to me. It’s not as easy to grab as self organization. However, it’s all the more important and a key part of our success. When I say success, I don’t necessarily mean the economic figures, but the joy we’ve developed at work.

Wholeness is best expressed with a quote from one of our contributors Karl, who recently joined the team: “I soon realized, at /gh, I’m not only considered a human ressource, but a whole human being – the company culture allows everyone to unfold. Besides exciting projects, I can also grow as a person.”

Wholeness means that we strive to integrate the whole being into working life. This includes feelings, needs and the resulting doubts, moods and contradictions. In contrast, in orange, performance oriented organizations, only the rational part of the human mind is appreciated. This leads to a culture in which people wear a “professional mask” and hide other parts of themselves. This sucks a lot of energy, and neglects an important part of human intelligence.

At first I thought we haven’t had much progress for this aspect of the teal organiaztion. At a closer look, however, I’ve discovered a few qualities of our culture which I think belong into the category of “wholeness”.

Here is what I found:

Values

Values are rather part of the green aspect of an organization. We work with shared values since years. I want to mention them in the context of wholeness anyhow, because values can be an important guide along the way.

We identified our shared values with the “Mountains and Valleys” exercise.

These are our shared values:

  • Openness
  • Simplicity
  • Pioneering
  • Learn-To-Fail
  • Mutual Trust
  • Happiness

These values aren’t just a nice buzzword to be posted on the wall. We refer to them often in day to day work decisions and they provide guidance whenever we need orientation.

Appreciation Round

Every three weeks, we have a so called “meta meeting”. We start this meeting with a kudos round in which we openly share appreciation for one another. It’s not about praising people. It’s about what someone has done, that has helped me or the team. This is invaluable feedback by which we learn how we can enrich each others lives.

For me, these are the best ten minutes. Time and again, I’m impressed how supportive the team is and how much energy is unlocked by expressing gratitude and apperciation.

Non Violent Communication

Non violent communication has become more popular recently in business. This doesn’t surprise me, considering that it can be a very effective way of communicating. For us, it became more than just a means to an end. It’s an attitude, that deeply changes how we relate to each other and our customers.

The basic assumption of non violent communication is that our behaviour is driven by our needs. Unconsciously, we apply strategies to manipulate the world, so our needs are going to be met. These strategies are often ineffective and create unnecessary harm and suffering.

If we recognize, that all human beings are happy to contribute to one another’s well being, we can spare all the strategizing, trying to force people to do what we want, and learn to ask instead. This is much more direct and joyful.

This form of communication requires a lot of practice and change of attitude. Sometimes we seek support from an external NVC coach. Also, in case of a larger conflict, a mediator trained in NVC can be helpful.

Safe Space

If we communicate non violently, a safe space arises. Safe means, we can express ourselves without being afraid to be judged by others. This is a basic requirement for us to be able to drop our professional masks. In many work environments, these masks are worn to protect oneself. Everyday work is often experienced as a sort of “fight”.

Safe space also means that one is being heard. When someone raises an issue, the meeting facilitator makes sure the group is staying with the person’s issue and others don’t distract with their own agenda. Being truly heard is rare in a world of perpetual distraction. When meeting participants aren’t distracted with their own agenda, the intelligence of the whole group is focused on the person’s issue.

Retrospectives

Retrospectives in combination with safe space are very powerful. We know retrospectives from Scrum, a framework for agile software development. We use Scrum for larger software projects since years.

During a retrospective, we reflect about the process and see how we can improve it. It’s important to be willing to learn from failures and don’t take them personally. This is a lot easier in a safe space, where one is not judged for mistakes. Failures are more considered an opportunity to learn and grow.

What’s next

We have a lot of ideas regarding wholeness which we haven’t tried yet. For instance, we have been talking about a sort of peer mentoring program, in which the team is mentoring one another in a more formal manner. If you have ideas on how to bring more wholeness into working life, please let me know on twitter.

Travelogue Part 2/4: Key Principles of Self-organization

Read part 1/4 here.

Self-organization sounded like chaos at first. Everyone is doing whatever comes to mind. But the chaos we had already. So we couldn’t lose anything and were keen to try something new.

Self-organizing companies are like ecosystems. There is no central place, in which all the decisions are made. Let’s take a forest, for example. There is no CEO tree making all the decisions. A forest may seem chaotic, but at a closer look, it’s a balanced ecosystem.

Now you’d think that a small agency with just ten employees can’t be all that complex. In reality, the opposite is true. The complexity starts within every one of us, with all our contradictions and fluctuations. In the daily business of an agency, every project and client is different. We don’t sell a mass product, and that’s why a one size fits all approach doesn’t work.

There are well refined and field-tested frameworks for self-organization, such as Holocracy®. We have decided to develop our own system step by step. This has the advantage that we can adjust things to our needs and don’t have to switch everything from day one. Going one step at a time allows us to gradually catch up with our minds, behavior, and culture.

With software development, it’s the same, by the way. I can take a ready-made system such as Ruby on Rails. However, if I have requirements that go beyond, the framework can be quite limiting.

The balance in the forest is based on principles. So we need strong principles for self-organization to work too.

Here are the three most important principles we’ve already implemented:

The Advice Process

A common misunderstanding of self-organization is that we have to take all decisions democratically and with consensus. That’s not the case, because consensus and democratic decisions are slow, inflexible, and hard to scale.

Instead, we make decisions where they need to be taken by the contributor who wants to bring about change. However, it’s essential to ask for advice and make use of collective intelligence to make the best possible decision.

That’s why the Advice Process is at the core of self-organization, and this is how it’s defined:

Any contributor can make any decision after seeking advice from 1) everyone who will be meaningfully affected, and 2) people with expertise in the matter. Source: Reinventing Organizations Wiki

Sounds simple, but in reality, it’s not easy to implement, because the old thinking that we learned in life “To ask for permission” is so deeply rooted. It takes patience to unlearn it.

Even today, two years after introducing the advice principle, I see it happening that we wait for permission, or there is disorientation because it’s not clear who makes the decision.

The contributor who sees the need for change needs to make the decision. As a contributor I propose change and ask for advice to refine my proposal to make the best possible decision.

Full Transparency

Next, we need full transparency for self-organization. To make the right decisions, the team needs access to all information. As a small business, we didn’t have much to hide. We rarely talked about finances, however. How much profit did we make? How much of that goes as dividends to the shareholders, and how much is reinvested?

It’s important to not only make information generally accessible, but make it visible, so the team looks at it regularly. The raw data often doesn’t help much. If the team needs to decide whether they can hire a new employee or not, they need to know the company’s financial situation. Just checking the account balance won’t do the job.

That is why we have a few KPIs which we check regularly. We are working on a dashboard to make this information easily accessible to everyone.

Circles & Roles

As a small business, we need to handle a broad and diverse range of tasks with just a few people. That means, as part of the team, I take a wide range of roles instead of just a particular one like in an orange organization, at the production line, for example. For that, we use the concept of roles and circles.

A role pursues a defined purpose and has clear accountabilities. As part of the team, I’m taking various roles, some of them long term, some temporary, e.g., in a meeting. As a project coordinator, for example, I coordinate the project’s budget and schedule, and as the Product Owner, I represent the customer internally and manage the product’s requirements. Both roles can be taken by the same person.

The Product Owner role, we already know from Scrum, a framework for agile software development. That’s why the concept of roles isn’t new to us. The difference is that we now apply this to the whole company and add a process to refine the roles as needed.

In addition to the roles, we also have circles. You can call it a team or a task force if you will. Just like a role, a circle has a defined purpose and accountabilities. Circles can also be long term, for Marketing, for example, or temporary, to push a project. Every two weeks, we meet in the meta circle to chat about each circle’s progress and assign new tasks and projects.

As a contributor, I can freely decide which roles to take on and in which circles to participate. That allows us to react very flexibly to new challenges.

Example: Self-setting salaries

How we are setting our salaries serves as an excellent example of all three principles.

Setting salaries works like any other decision. The salary is self-set and follows the Advice Process. We had considered using a formula like the startup Buffer is doing, for example. That didn’t work for us, though. Salaries are way too complex to break it down into a simple formula. This example demonstrates how powerful the Advice Process in combination with full transparency is in dealing with complexity.

Here is how it works: when I want to adjust my salary, I create a salary change request. The request is a sort of open letter to myself. I have a few guiding questions to help me reflect on it and find a good salary. The letter helps me and others to get a feel for how I’ve come to a decision. I can see change requests of other contributors, too, and set it in relation. I also have an insight into company financials and can get a feel for whether we can afford the raise or not (Full Transparency).

I’m sending my salary change request to the salary circle (Circles & Roles), which meets to consult about the request to give me advice (Advice Principle). Possible, that I have a bit exaggerated with my raise or perhaps I was too modest. Important to note is that this is just advice to help me as a contributor taking the right decision. In the end, I’m making the decision myself. Once I’ve made the decision, I inform the salary circle as well as the role responsible for payroll accounting to make the change.

So far, we have had three change requests, and things are working well.

In the next part 3/4, I’ll be reporting on our progress in the “Search for Wholeness”.

Travelogue Part 1/4: On the Way to become a Teal Organization

This year, we are celebrating the 10th anniversary of our digital agency /gebrüderheitz. I often feel lucky that our company is still alive after all the ups and downs we had along the way. In this article, I’m telling our story and relate it to Frederic Laloux’s book “Reinventing Organizations” and the “Teal Organization.”

A Journey

I love to travel. About five years ago, we decided to go fully remote. That has allowed me to follow my passion for traveling extensively. I like to see the development of a company as a journey. When I travel, I go out to explore, adapt to new environments, self reflect, and learn new things. The same is true for us as an organization. We explore new technologies and find new and better ways to serve our customers, constantly adapt to a fast-paced industry, self reflect in retrospectives, and learn new things. The organization is like a living being, growing, and embarking on a journey.

The organism is used as a metaphor for the “Teal Organization,” as defined by Frederic Laloux. The color “Teal” describes a stage in the development of human consciousness. We develop in stages, and in each stage, there are significant breakthroughs in all areas, from technology to human collaboration. The Philosopher Ken Wilber describes these in the Integral Theory. Frederic Laloux is building up on that and applies this theory to management and human collaboration. He studies the radical change, that we can already witness in a few pioneering companies around the world.

Orange: The Organization as a Machine

On our journey as an organization, we’ve gone through ups and downs. My brother and I founded the company in 2010. He’s an engineer, and I’m a Designer. It was a good fit, and we already had a few clients from our previous freelancing careers. We soon wanted to extend the team and found people who were curious to join us on our journey.

When you start hiring people, a lot of things change. We were confronted with questions like who’s taking which decision, and how do we organize ourselves? Who’s going to take care of things like HR, Marketing, and Sales, which is becoming more important as we grow. An organizational structure is necessary, and leadership skills are required, which I hadn’t had acquired during my time as a freelancer. I was curious, wanted to learn, and started reading management literature.

In traditional management literature, companies are often considered a machine. It needs clearly defined processes, and everyone in the team has to fulfill a specific function. Frederic Laloux describes this as the orange stage, emerging from a modern, performance-oriented worldview.

As the CEO, I have the responsibility to coordinate things. If something goes wrong, I have to fix the machine. I’m fine with the processes. I like it when things are well organized. It meets my need for security. What didn’t work for me was the idea that I thought I had to take full responsibility as the CEO if something went wrong and was solely responsible for fixing it.

In hindsight, I know that, in the role of the CEO, I can’t know all by myself what’s best for the company. The team knows that much better.

Green: The Organization as a Family

I doubted myself as a “manager” and entrepreneur. The way I thought I had to run a company just didn’t suit me. I was close to giving up. This inner conflict was leading us into a downturn, and we announced to the team that we wanted to close the business.

Instead of closing, we scaled down to a team of four. With this size, we were agile and didn’t need much structure nor management.

We made it through the valley, and after a year, things have been picking up again. This time it was different. The machine metaphor didn’t work for us, so we unconsciously went back to the family model. We are a family run business, after all.

Frederic Laloux describes this with the green stage, which is based on a postmodern, pluralistic worldview. I felt much better; it was my comfort zone. Flat hierarchies released some of the burdens I felt before in the role of the CEO. Our team trusted me, and this has helped me to overcome my self-doubts.

Happiness was one of our core values, and the well being of each team member was important to us.

Old Problems, New Ideas

We were growing again, and with the growing team, the old problems came back. Soon, we’ve been overstrained, and our highly valued happiness was in danger of being lost.

During this time, in the role of the CEO, I considered myself a service agent. It was my job to serve the team and remove all their impediments so that they could work effectively. That worked quite well, as long as everyone knew what needed to be done. However, there was a lack of orientation, and the anti-authoritarian attitude was leading us into chaos. That was slowing down our growth again. We didn’t know how to make decisions effectively, so we avoided them.

The search for orientation began once again. After months of growth pain, my search ended when a good friend recommended me the book “Reinventing Organizations.” I watched the introductory talk on youtube and got instantly excited.

For the first time, I heard about a new way of running organizations that felt right to me. That is how I had hoped to run companies, and somebody put it into words and prove it with real-world examples.

I felt deeply understood. The self-doubt vanished. I was encouraged. I wanted to go into that direction and told my brother Claudius about it. A few weeks later, we had our first workcamp, where we announced this new direction to the team.

It was one of our core values, the “Pioneering Spirit,” which was the main driver for this change. We were keen to try something radically different in the way we worked together.

The business model of a digital agency is quite boring. There is not much innovation to find. Only in the way, how we work together and serve our clients, we can make a difference.

Teal: The Organization as an Organism

The teal stage emerges from an integral, evolutionary worldview. The organization is seen as a living system, with its own will and a purpose that it likes to express. As a business founder, I don’t oppose my will on the organization but rather listen to what it wants.

The teal organization is based on three disruptive ideas:

  1. Self-organization: how can we distribute authority, work effectively and use our collective intelligence, without the need of a top-down hierarchy?
  2. Search for wholeness: how can we create an environment in which we can be whole, including our feelings and needs, and integrate the wisdom emerging from that in our work?
  3. Evolutionary purpose: how can we create an environment where we can express our purpose and stay open to let it evolve?

In the following three articles, I will describe how we’ve developed in each of these areas, what we have learned along the way, and what we plan to do next.


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