Two years as a teal organization. Practices we’ve implemented, lessons learned and plans for the future.
There are two articles in the teal series that precede this one. They give you an insight into this way of running organizations as well as describe our experience with it. Despite being really interesting reads, if I dare to say it myself, they have one flaw: they’ve been published about a year ago. Meaning, it is high time to take another look at Code Poets through this lens and see the progress we’ve made on our teal journey. It’s been almost two years since we’ve introduced the concept, so there’s loads to talk about.
Since our introductory article has already given you an insight into the theory of teal and why it’s a worthwhile idea, I hope I’ll be excused for heading straight for the practical side. And what’s more practical than the practices (pun intended) we’ve implemented? Why don’t we go over them together, wrapping them up with lessons learned on our teal journey.
Teal practices we’ve implemented
#1 Financial transparency
One of the first things we’ve focused on after the monumental teal decision was making our company finances public to all the team members. That includes all the details on how much we charge all of our clients, what are the rates for each specialist, the projects’ budgets and everything else that amounts to our revenues and costs. The only thing that stayed private was the individual salaries – more on that in a little while.
This was a trailblazing step for us, especially that money still is a taboo topic in our cultural zone. Many people consider it uncomfortable or just unnecessary to talk about it and obviously, we’ve had some reservations about this decision. There was a risk that it would cause quite a stir – after all, if you’ve never really sat down to think about all the costs that the company bears on top of your salary (office, legal, accounting, marketing and sales departments etc.), it might be tempting to jump to the conclusion that you’re being ripped off when you realize how much revenue your work generates.
Fortunately, everybody acted really mature and got on board with the way money is spent at our company. There was no upheaval whatsoever. Moreover, the newly-found knowledge helped jump-start the mindset shift that is the backbone of any teal (r)evolution: realizing that in order to succeed the fastest, you need to advance the whole company, rather than get stuck on pondering your individual role in it.
#2 Operational transparency
This notion has followed the first one rather organically. It was all about showcasing the situation in different departments. After making our finances public knowledge to the employees, we’ve realized that without a broader context of other operational aspects, it doesn’t tell much (and if it does, it’s not enough to enable really informed decision-making). Again, there was a risk connected to the newness of this whole situation. What if some bad news causes people to leave because they start feeling uncertain? A lot of companies only share negative occurrences once they snowball and threaten to become known some other way. Keeping the worries to yourself is an understandable strategy, as many times you’ll be able to get out of the situation and to the external eye it will be like nothing’s ever happened. However, we’ve figured that in our model it would be simply unethical to control the information flow that way and we either share all or nothing.
This step, together with the one described in point no. 1, has been crucial to broadening the perspective of everyone on the team. Pretty soon, I’ve noticed first indicators of people referring to situations outside of their closest work environment when stating their arguments. It was proof that when you treat people as adults and in a way, the co-owners of the company, they start acting as such.
Of course, that’s not to say that once you go teal, all problems magically disappear and everyone loves the new system and culture. Most organizations that take this step say goodbye to a small part of the team and that happened to us as well. A few employees decided that this is not the right kind of environment for them at that time and transitioned to other companies. I don’t think it’s a bad thing – both the organization and its employees have the right to evolve and look for paths they consider more suitable. It’s impossible to evaluate it, it’s just a matter of the right timing and fit.
#3 Decision-making process
One of the goals of financial and operational transparency was enabling all members of the organization to make decisions that affect it. We wanted a truly flat structure and a similar kind of incentive or power for everyone. In order for that to happen, the employees have to have the same scope of information as the CEO (who’s the main decision maker in traditional organizations). The anticipated result was an intellectual synergy owing to the individual strengths and knowledge capital of each team member.
Our first approach to this step was a deep dive: we’ve just announced that from now-on, anyone can make an informed decision. There was a vision of complete anarchy that haunted me, but guess what… the absolute opposite has happened – nobody has made any decision. They were paralyzed by the newness and uncertainty of it and waiting for someone else to blaze the trail.
Obviously, what we needed was a structured process that gave you the sense of righteousness and some security. We’ve started to build it, creating appropriate Slack channels and rituals. The decision was meant to be published on Slack alongside a reasoning for it. There were two days before it went into the execution mode, when anybody could object, justify it and perhaps start a counter-decision process as well. We’ve also documented the way for reaching the decision, describing the advisory process, consultations with people competent in given areas and more (read about it in our Playbook, accessible on this site).
All this action did the trick – people have started to take initiative and publish their decisions. At first slowly and shyly, but soon the ball started rolling. There were even a few objections that have led to the improvement of the decisions.
So, what exactly were they about? We’ve had important strategic decisions – focusing on our prefered two industries, introducing a feedback culture and practices, splitting a bonus from the client – as well as more trivial, every-day ones (eg. buying a microwave for the office or a book for a specific person) made.
Alongside the decisions Slack channel, there are two other “company” ones: news and official. The three of them work together in a team, first keeping everybody informed about the important and day-to-day events and then incentivizing them to use this knowledge to drive the organization forward.
After a year and a half of perfecting the decision-making process, we’ve let the two-day buffer period go to make it even more efficient and ensure that it doesn’t stop us from grabbing last-minute opportunities like a sale on a software tool we want to get.
#4 Company retro
This weekly meeting was introduced at the same time as the three aforementioned practices. At first, it was an outlet for all the financial and project information we’ve made transparent. But this get-together evolved from a different meeting we used to have – Thursday Lunches (when the team members would present tech talks and pick a place to order food for everybody from), so naturally, it had to contain a strong social element as well. Therefore we’ve kept the food (who wouldn’t?) but decided to put the tech talks away for a little while, as they were turning into more of a chore rather than a fun opportunity.
#4.1 The round
After a short while, the idea of a “round” came up as an answer to an issue we’ve noticed during the meeting. They were run by me and although everybody was welcomed to chip in, only a few (of the most extrovertive) people did. As a rule, some have a natural charisma, but there are also a lot of introverts who won’t speak up unless they feel obligated to do so, which robs the discussion of their equally valuable observations. That’s how we’ve arrived at the “round” idea, which basically means that each person gets to express their views and nominates the next one to do the same until everyone has had their say (unless they give up that right explicitly, because they eg. don’t have an opinion on a given issue).
At first we kept the questions simple and socially-oriented, starting with the basic “how do you feel today?”. The goal was to integrate the team, appreciate all the small successes as well as to catch the first signs of potential problems in a project ect. After the initial flare rubbed off and it became routinely in the bad sense of the word, we’ve felt confident to bring up more complicated issues. Alongside this change, people started expressing the opinion that we should have more detailed project updates together with the general ones I provided, and so we’ve arrived at the current formula that works great to this day – which is not to say that it won’t evolve as our needs do.
Today, the retro meeting is split into two parts. The first one is composed of detailed updates on each commercial project, recruitment, marketing and sales, finances, operations and any other important issues at that moment. The updates are provided by people responsible for given areas and they are also expected to answer questions from other members. This part usually lasts for about 40 minutes, which leaves us 20 minutes for the question round.
The questions are submitted by whoever’s willing (all they have to do is to paste it in the meeting’s agenda). They can touch a number of issues and areas, from projects (What should we do with the bonus or a hiring bottleneck?) to internal practices (Should we make our salaries transparent or who should be responsible for cleaning up after a party?) and everything in between – including a Netflix recommendation query. Once the question is asked, anybody who doesn’t feel like discussing it can leave, while the rest (usually the majority) express their opinions respectively. The person who has done the asking is later welcomed to do whatever they wish with the data they’ve collected: they can make and publish a decision or choose to put the issue back on the shelf and wait for another time to bring it up again.
The set of values we’ve had until making the decision to go teal were picked by the founders and sort of artificially imposed on the employees (as, sadly, is usually the case). When we started to really work on the company’s culture and create our Playbook as part of this effort, we’ve realized that these “values” have to go. I knew that the team was now strong and defined enough to determine which values we actually already follow (rather than which ones look good on paper), so that in any doubt you can refer to them, as well as make clear to any new-comers what we’re all about here.
Magda, who’s responsible for operations at the company, has embarked on a mission to collect the values indicated by all the employees. We’ve described them based on our unique experience to make them clearer (they tend to sound generic and we wanted to make sure everyone knows what we mean by them in practice), ran a two-rounds survey to pick the top 5 (self-organization, transparency, can-do attitude, responsibility and respect) and publish them as a regular decision which was backed up by all members of the organization. We consider it one of our most treasured achievements as a teal company and I don’t think it’s a coincidence that all of the values are in perfect alignment with the teal model.
The values have stood the test of time, and today, after more than a year, they are still very much alive, followed and even frequently referred to in a number of discussions or decisions made. They are also the backbone of our marketing and employer branding strategy, attracting the business partners and employees with whom we’re almost bound to have an instant understanding.
What have we learned on our teal journey?
#1 Teal is not easy
A lot of people doubt whether this whole teal train is a real deal and not another branding strategy (with a few companies actually doing it a disservice by exploiting it for that reason only). Well, even if you’re doing it for your own internal benefit first, it’s not like you become a teal organization in a day and all of the sudden, everything starts working just as Laloux describes in his book. All the cultural background, our upbringing and scholar system condition us to function in hierarchical structures and avoid sticking our necks out. The “do your thing and go home” approach is very much a thing, even in the IT industry. There are few organizations or indeed, places, where making mistakes is allowed or even encouraged, where you can experiment and develop in more ways than one.
#2 Each teal organization is different
The practice of teal has experimentation and adjustment written into it. Every organization has different needs and is set in a different kind of environment. Adopting all teal practices by default will lead to chaos and distortion. You need to pick and choose, monitor, evaluate – basically, have a step-by-step plan (and adjust it as you go) for the individual needs of your organization.
By the way, the practices should be viewed more as artefacts – the most important thing is the culture that’s being created and the mindset shift in each individual member. It makes more of a difference to the organization than the practices that catch your eye, such as salaries transparency.
#3 Teal is not a democracy
When everyone has an equal say, it’s easy to jump to the conclusion that teal organizations adopt a democratic model (and an Ancient Greek one at that) and have to deal with all its drawbacks. If we want to stay with the politics allegory, teal is more like a meritocracy, since it allows you to make decisions outside your job description, but you have to base them on merit – knowledge you possess or at least tons of consultations. It doesn’t really mean that a junior developer is going to decide the company will invest all its free resources into a field of their choice three weeks after joining it – we all need to keep a level head.
In that way, a teal organization, while staying a noble idea, is able to function and excel on the capitalistic market. Rather than rejecting all hierarchy, teal is a flat one with occasional moves to a vertical one according to the current needs – sort of “on demand”. That’s how it’s also able to deal with a crisis, where there’s even space for a temporary dictatorship (if accepted by other members in a regular decision-making process).
#4 Teal is a journey, not a destination
Becoming teal is a lengthy process with a lot of road bumps along the way. However, it is hard to really define “being teal”. There’s no official mark that lets you know you’ve made it. As such, a teal organization is one that defines itself as that and follows the mindset of sharing the responsibility, risks and rewards of being a part of – or making – an organization, with all the practices that come with it.
While it’s nice to look back on our journey and to list all the changes we’ve made, there is always room for improvement and growth as the company, market conditions and, in fact, the whole world change.
Our plans for the future
There are a lot of things we consider and work through during our bi-weekly teal meetings (for anyone interested) or the company retros. Here are the most important ones.
#1 Salaries transparency
Making all salaries public knowledge (inside the organization) is the next and last step on the road to full financial transparency. We’ve been considering it for a while with a degree of hesitation – at first, we couldn’t define a worthy goal this step would serve. However, recently we’ve arrived at the conclusion that this move is supposed to bring about a feeling of fairness, both in terms of the organization as well as as a part of a team. Transparency of salaries ensures there’s no place for any shady agreements and that people with less of a “competitive spirit” are properly remunerated for their good work.
There’s no escaping the fact that people usually come to work for the money, and any additional perks like a great team spirit are, while unquestionably great – still additional. Therefore, if we want to incentivize them to take responsibility for the company as if it was their own, we should also give them the reward that comes with the increased effort and risk.
Profit sharing seems to be a natural artefact of financial transparency in the teal model and we’re eager to implement it soon. We’re still trying to decide on the details to make sure that this new initiative serves the purpose of rewarding people for their efforts in the most efficient way. The profit is a significant amount that could benefit the company if invested elsewhere, so the decision to split a part of it on top of all the salaries (which tend to be high in our industry, so the motivation isn’t as big) needs to be a well-designed one.
Alternatively to sharing the profit, we’re also discussing going public and giving part of the stock options to the employees, which should have a similar result while staying a bit more independent of the current financial situation.
#3 Perfecting the decision-making process
We feel very confident in what we’ve worked out so far and now we want to move on to the closure of the process: the evaluation of the decision, checking if the goal was met in an efficient way and reflecting on it in general. It is missing from our current routine and it seems like developing it would make the whole thing complete and an even more effective tool for the growth of the organization as well as the individuals.
#4 Perfecting the onboarding process
Introducing a new person to this whole teal idea requires a lot of work. Playbook and the articles are great educational material, but there’s a need for more when it comes to people who actually join our organization. There are a lot of ideas in terms of internal knowledge transfer, a buddy system etc. – we’re currently adjusting our onboarding process to accommodate teal and ensure that new-comers can start to operate confidently within weeks.
Overall, our teal plans are numerous and after these two years we’re excited to continue. As we’re gaining more and more practice, we’re also slowly embarking on a mission to share our experience with other companies that feel that there’s something wrong with or missing from their management models. Teal is very much in line with the IT industry as well as the direction in which the business world is evolving, so I recommend anyone to at least get interested in the idea and find out if it might be something from them. If you wish so, I’d love to chat to you about it (or anything else for that matter)!