Home-grown self-organization operating systems

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Listed below are some of the more prominent enterprises that have developed their own operating systems.

AES Corporation

Named as a Teal organization by Frederic Laloux in his book Reinventing Organizations

Global energy company, for profit, 21,000 employees.

AES website

AngelList

AngelList helps people find a great startup job, invest in a startup or raise money.

AngelList website

Automattic

Automattic, Inc. is a web development corporation founded in August 2005, based in San Franciso, California, USA. It is most notable for WordPress.com (a free blogging service), as well as its contributions to WordPress (open source blogging software). The company’s name plays on its founder’s first name, Matt.

The company has 430 employees. Its culture was the topic of a participative journalism project by Scott Berkun, entitled The Year Without Pants: WordPress.com and the Future of Work.

Source: Wikipedia.

Automattic website

BSO

Named as a Teal organization by Frederic Laloux in his book Reinventing Organizations

In 1993 BSO/Origin merged with Philips Communication and Processing Services. In 1996 Origin BV was established and was a member of the Royal Dutch Philips Group of Companies with 16,000 employees in 30 countries worldwide. In August 2000 Origin BV merged with the French company Atos, which led to the creation of Atos Origin. In August 2002, Atos Origin acquired KPMG Consulting in The Netherlands and the UK, now trading as Atos Consulting in both countries.

Source: Atos

Basecamp

Basecamp, formerly known as 37signals, is a privately held American web application company based in Chicago, Illinois. Its products are Basecamp, Backpack, Campfire, and Highrise. The open source web application framework Ruby on Rails was initially created for internal use at 37signals, before being publicly released in 2004.

Behind the scenes: How we organize our twice-a-year full-company meetups, by Jason Fried, founder & CEO, Basecamp, on Signal v. Noise

The tool we built to keep everyone in the loop at Basecamp, by Jason Fried, founder and CEO, Basecamp, on Medium

Basecamp website

Buffer

Buffer is a software application designed to manage social networks, by providing the means for a user to schedule posts to Twitter, Facebook and Linkedin. As of January 2015, Buffer has more than 2,000,000 registered users.

Seeking a flat structure was a misperception of what self-management means.

Hierarchy has once again become a central part of how we work again at Buffer.

People by nature have a unique place within Buffer that isn’t created equal.

Excerpts from What we got wrong about self-management: embracing natural hierarchy at work, by Leo Widrich, Co-founder and COO at Buffer.

This reminds me of the way circuses work as described in the book Ishmael by Daniel Quinn. In a circus, a boss is just another job that has to be done. An elephant trainer has his area of expertise and so does a clown. It’s assumed they all know their jobs and it’s also assumed they will all pull together to pitch the tent and tear it down. It’s not a hierarchy but rather it’s clearly understood roles, some of which are dependent on others, some of which are pretty independent. But everyone’s goal is to do their part to put on the best circus performance.

Source: Neil McKay, in response to What we got wrong about self-management.

Our journey to self-management hasn’t been a straight path. In fact, sometimes it looks more like a circle, pointing us back to where we’ve been and helping us recognize it in a new light.

Source: Self Defined Self Management: How Our Startup Is Figuring It Out Together, by Courtney Seiter, Buffer, on bufferopen.

From Startup to Scaleup: What We’re Changing As We Make The Transition, by Joel Gascoigne, on BufferOpen

Why We Have Paid, Paid Vacation and Give Teammates an Extra $1,000 to Take Time Off, by Leo Widrich, Co-founder and COO at Buffer, on BufferOpen

Buffer website

Buurtzorg

Named as a Teal organization by Frederic Laloux in his book Reinventing Organizations

Buurtzorg is entirely based on the principle of self organization. As a result, the care professionals can fully develop and use their talents. Managers, intakers and planners are not needed anymore. Small teams of nurses and other care takers, localized in the neigbourhood of their customers, decide according to their own judgement what care matches best. This is done in close cooperation with each customer and the social network around this person. In other words: context- and relationship-directed care is given. This resembles the way in which district nurses used to operate, but not everyone in a Buurtzorg team has the same role. Tasks are distributed across the team members in a natural way.

Source: The self-steering and care-driven teams of Buurtzorg, by Dr Jaap van Ede, on Business-improvement.eu.

Buurtzorg (Dutch for neighborhood care) is one of the companies studied by Frederic Laloux for his book Reinventing Organizations.

Buurtzorg Nederland is a Dutch home-care organization that has attracted international attention for its innovative use of independent nurse teams in delivering high-quality, relatively low-cost care.

The company is discussed in Building High-Performance, High-Trust Organizations: Decentralization 2.0, a book by Gerrit Broekstra, Professor Emeritus of Organization Behavior at the Nyenrode Business University, the Netherlands. View selected pages on Google Books

10 000 employees. No managers. Great results. by Sami Honkonen, on Medium.

Buurtzorg website

Evangelische Schule Berlin Zentrum (ESBZ)

Named as a Teal organization by Frederic Laloux in his book Reinventing Organizations

Founded in 2007 and located in Berlin, ESBZ is an evangelical Christian school that has attracted international attention for its innovative curriculum and organizational model.

Evangelische Schule Berlin Zentrum website

Favi

Named as a Teal organization by Frederic Laloux in his book Reinventing Organizations

FAVI is an SME employing 406 people, based in Hallencourt in the Picardy region of France. It is a pressure die-casting company specialising in copper alloys. FAVI is the undisputed market leader in the gearbox sector of the automotive industry.

Source: Work organization and innovation: Case study: FAVI, France (pdf).

Favi website

Fitzii

Fitzii is a wholly owned subsidiary of the Ian Martin Group, which is a certified B Corp with 125 employees across Canada and the United States.

Fitzii describes itself as “a free hiring platform providing easy access to expert tools and advice that increases the odds of making a great hire, and saves time and money along the way.”

In February 2015, 2015 Fitzii officially eliminated management functions and became a self-managing company.

Read more

The Good, Bad & Amazing of Six Months as a Self-Managed Company, by Edwin Jansen, on Fitzii Blog

Fitzii Blog

Github

GitHub is a privately-held web-based Git repository hosting service with 467 employees (2016), based in San Francisco, California, United States. Git is a widely used source code management system for software development. It is a distributed revision control system with an emphasis on speed, data integrity, and support for distributed, non-linear workflows. Git was initially designed and developed in 2005 by Linux kernel developers (including Linus Torvalds) for Linux kernel development.

Sources: Wikipedia—GitHub; Wikipedia—Git (software).

GitHub website

W. L. Gore & Associates

Gore is one of the most successful firms in the world. They have more than 10,000 employees, with basically three levels in their organizational hierarchy. There is the CEO (elected democratically), a handful of functional heads, and everyone else. All decision-making is done through self-managing teams of 8-12 people: hiring, pay, which projects to work on, everything.

Source: Hierarchy is Overrated, by Tim Kastelle, in Harvard Business Review.

A lattice organization is one that involves direct transactions, self-commitment, natural leadership, and lacks assigned or assumed authority. Every successful organization has a lattice organization that underlies the façade of authoritarian hierarchy. It is through these lattice organizations that things get done, and most of us delight in going around the formal procedures and doing things the straightforward and easy way.

Source: Bill Gore, quoted in The Lattice Organization (pdf).

Caveat emptor: it’s said that it takes six years for the average new employee to become fully operational inside their self-organizing system.

Clay Parker Jones, writing on Medium about W. L. Gore & Associates | View source

Read more about the W. L. Gore & Associates operating system in Maybe Hierarchies Are All About the Power, by Bruce Eckel, on Reinventing Business

W. L. Gore & Associates website

Haier

Haier, a Chinese appliance-maker, last year split its workforce into 2,000 self-managed teams that perform many different roles.

Source: The holes in holacracy, in The Economist.

Intimacy is a lot more complicated than responsiveness, and this third reinvention required employees to feel closer to their customers. Haier thus inverted its organizational structure into one based on self-organizing work units called ZZJYTs (an abbreviation for zi zhu jing ying ti, which translates to independent operating unit). Their three most critical functions — marketing, design, and manufacturing — were now supposed to work directly for customers. Instead of directing the employees who did that work, the ZZJYT managers became service providers to them, giving them the resources and guidance they needed to provide for customers. This minimized the decisions made at higher levels in the hierarchy, making the company more responsive to nascent market needs. Zhang went so far as to announce that this shift in organizational model would proceed even if revenues and profits showed signs of flagging, and even if it were necessary to use some of the returns from successful legacy offerings to make it work.

Source: The Haier Road to Growth, by Bill Fischer, a professor of innovation management at IMD in Lausanne, Switzerland; Umberto Lago, an associate professor of management at Bologna University in Italy; and Fang Liu, an investment analyst at Lombard Odier Asset Management; in strategy+business.

Read more

How chairman Zhang Ruimin transformed Haier Group, on The Telegraph. Excerpt of a speech given by Zhang Ruimin in November 2015.

Transformation at the speed of Haier, by Lee Bryant, on Post*Shift

Haier website

Handelsbanken

Svenska Handelsbanken AB is one of the major banks in Sweden with more than 460 branches. Since the mid 1990s Handelsbanken has been expanding its universal banking operations into the other Nordic countries, and also in the United Kingdom, the Netherlands, Latvia, Estonia and Lithuania.

Handelsbanken is discussed in Building High-Performance, High-Trust Organizations: Decentralization 2.0, a book by Gerrit Broekstra, Professor Emeritus of Organization Behavior at the Nyenrode Business University, the Netherlands. View selected pages on Google Books

Handelsbanken website

Medium

Established by Twitter co-founder Evan Williams in August 2012, Medium provides an online publishing platform. The company describes itself as “a community of readers and writers offering unique perspectives on ideas large and small.”

In March 2016 or thereabouts, the company replaced its Holacracy-based operating model with the principles listed below, which will evolve as Medium itself evolves.

  1. Individuals can always instigate change.
  2. Authority is distributed, though not evenly or permanently.
  3. Ownership is accountability, not control.
  4. Good decision-making implies alignment, not consensus.
  5. The system is designed to be adaptable.
  6. Corporate transparency, driven by technology.

So we’re off Holacracy. Not because it didn’t work, or because it’s “wacky” or “fringe.” We are a little wacky and fringe, and we’re okay with that. We are moving beyond it because we as a company have changed and want to make fundamental changes to reflect this. Many of the principles we value most about Holacracy are already embedded in the organization through how we approach our work, collaborate, and instigate change. Beyond that, the system had begun to exert a small but persistent tax on both our effectiveness, and our sense of connection to each other. For us, Holacracy was getting in the way of the work.

Andy Doyle

Source and full story: Management and Organization at Medium, by Andy Doyle, Operations at Medium, on Medium

Ruben Timmerman, Chief UX Officer at Springest, a Holacracy adopter, posted this response on Medium: Medium drops Holacracy: how we dealt with their challenges at Springest in the past 3 years

Medium website

Morning Star

Named as a Teal organization by Frederic Laloux in his book Reinventing Organizations

The Morning Star Company is a California based agribusiness and food processing company. Morning Star processes 25% of the California processing tomato production, and supplies approximately 40% of the U.S. industrial tomato paste and diced tomato markets. The company has attracted attention for its libertarian philosophy of no supervisory management. Instead, workers are encouraged to innovate independently, define job responsibilities themselves, and even make equipment purchasing decisions in consultation with experts.

Source: Wikipedia.

The Morning Star Company—Colleague Principles

In order to encourage, achieve and maintain an atmosphere of high integrity, trust, competence and harmony among all colleagues, customers and suppliers, each Morning Star Colleague commits to the following:

  • Mission.
  • Individual Goals and Teamwork.
  • Personal Responsibility and Initiative.
  • Tolerance.
  • Direct Communication and Gaining Agreement.
  • Caring and Sharing.
  • Doing What is Right.
View source and explanatory text

I, Tomato: Morning Star’s Radical Approach to Management, on Enlivening Edge

Morning Star Self-management Institute (membership is free)

Morning Star website

Patagonia

Named as a Teal organization by Frederic Laloux in his book Reinventing Organizations

Founded by Yvon Chouinard in 1973, Patagonia, Inc. is an American clothing company that focuses mainly on high-end outdoor clothing. Based in Ventura, California, the company is a member of several environmental movements and is a certified B Corp, meaning the company is beholden to public-benefit concerns (in this case environmental) alongside its profit motive. 1,350 employees.

Main source: Wikipedia.

Patagonia website

Reaktor

Founded in 2000, Reaktor is a creative technology company with 360 employees based in offices in Helsinki, New York and Tokyo. Reaktor creates digital services for clients in the finance, retail, media, telecommunications and air travel sectors, and in the public sector.

No hierarchy! An outsider’s view to one of the world’s coolest companies, by Niclas Kristiansson

Reaktor website

Red Hat

Red Hat, Inc. is an American multinational software company providing open-source software products to the enterprise community.

Red Hat website

Semco Partners

Semco Partners is a Brazilian company best known for its radical form of industrial democracy and corporate re-engineering. Its CEO and majority owner is Ricardo Semler. In 1980, Ricardo Semler’s father Antonio Semler resigned as CEO and vested majority ownership in his 21 year old son. On his first day as CEO, Ricardo Semler fired sixty percent of all top managers, and began work on a diversification program away from the struggling shipbuilding industry.

Source: Wikipedia.

Semco Partners is an active portfolio manager for a variety of corporations doing business in Brazil. Its mission is to seek out new businesses, oversee existing businesses, and promote synergies among them.

Source: Semco Partners website.

How to run a company with (almost) no rules
A TED Talk by Ricardo Semler | Runtime 21:42

Spotify

Spotify is a Swedish commercial music streaming, podcast and video service that provides digital rights management-protected content from record labels and media companies. Its operating system is based on Agile.

Spotify's Tribes, Squads, Chapters and Guilds
PO: Product owner.
Squad: A development team with a long-term mission.
Tribe: A collection of squads working in related areas.
Chapter: People with similar expertise.
Guild: A cross-tribe community of interest.
Caveat

Let’s consider this latest “recipe for success”: the Spotify model of scaling agile (interestingly enough, while happy to share their practices, Spotify themselves discourage people from mindlessly copying them. The authors of this paper also rightly mention that this is a point-in-time snapshot of an ever-evolving context).

Source: 7 principles to help organisations resist the siren song of copying recipes, by Sonja Blignaut, on More Beyond.
See also:

Scaling Agile @ Spotify with Tribes, Squads, Chapters & Guilds (pdf), by Henrik Kniberg & Anders Ivarsson

Spotify Rhythm – how we get aligned (slides from my talk at Agile Sverige), by Henrik Kniberg, on Crisp’s Blog

Spotify’s Self-Managing Engineering Culture, by George Pór, on Enlivening Edge

Spotify website

Suma

Suma, a workers’ co-operative, is the UK’s largest independent wholefood wholesaler and distributor, specialising in vegetarian, fairly traded, organic, ethical and natural products.

Suma delivery vehicle and staff

The business was founded in 1975 and is based in Leeds, West Yorkshire. Its turnover in 2015 was £42m. Today, it has 161 fully-fledged employees (known as members) performing multiple roles, and 50 short-term workers.

Everyone receives the same salary: £11.98 per hour for a five-day contract of 40 hours, amounting to a gross salary of £31,981.

The worker-owned cooperative has a flat structure with a roster of people elected to sit on the management committee for two years. There is also team of coordinators who are similar to heads of department.

Main source: Who needs bosses? Not the company that pays everyone the same and gives workers free meals, by Julian Cole, in the i newspaper.

Suma website

Sun Hydraulics

Named as a Teal organization by Frederic Laloux in his book Reinventing Organizations

Valve manufacturer, 900 employees.

Sun Hydraulics website

Treehouse

Treehouse Island, Inc. is an online interactive education platform offering courses in web, mobile and business development. Its courses on web development and programming are aimed at beginners looking to start a new career, while its courses in business education and marketing teach students how to start and market a business in the technology industry.

Source: Wikipedia.

Treehouse website

Valve

Valve is an entertainment software and technology company founded in 1996. Valve develops award-winning games, the Source® game engine, and Steam®, an online gaming platform.

In my own paraphrase, Valve’s way of operating is anchored in four ideas:

  1. Complete self-organization on all levels, with no formal hierarchy.
  2. Peer accountability, reinforced through a stack ranking system in which peers establish one another’s value.
  3. Tremendous focus on hiring (“when you’re working on hiring, everything else you could be doing is stupid and should be ignored!”).
  4. Ensuring all other design parameters reinforce these (e.g., 100% self-funding).
Source: When Is No Hierarchy Best? by Niko Canner, incandescent.

Rather than taking from the Valve case the principle of “no hierarchy,” the most powerful lesson here is the principle of designing a way of operating to fit a vision of what it will take to be extraordinary.

Source: When Is No Hierarchy Best? by Niko Canner, incandescent.

Valve website

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