Helen: Sure. I am Helen Walton and I am the founder at Gamevy which is a tech start-up bringing TV game shows online. The real reason why we connected with InfoQ is because of our own culture which is an unusual one: we are employee owned, we have a completely flat structure, with no bosses. We practice various other things – we do not have defined roles, we do not have job titles, we practice a radical transparency, we have various rules that try and make our culture real like, for example, anyone in the company is able to spend up to 10 percent of our cash reserves without any oversight at all. We trust our people to deal with what is most valuable for the company and actually, it means we are incredibly cost conscious. So, we have this unusual culture. It means that we connected with other fairly unusual companies by a conference we call “Spark the Change” and indeed that is how I met Pete.
2. And Pete?
Pete: Well, the first thing to know is probably that Helen and I are like chalk and cheese. She is very eloquent and all of those kind of things and I am definitely not. Strangely, I was involved in the software industry years ago, when I was a young man in my 20s. I worked for an American company called Digital Equipment, now defunct or now part of HP actually. But somewhere along the way I kind of moved out of that area and into consulting and into management consulting and ended up working with a lot of startup businesses and after that with a whole lot of SMEs. What I really do nowadays is to focus on organizational culture and organizational development and I have some colleagues, I work for a company called Conscious Business People. Some of my partners are psychologists, some are organizational development people so they kind of have a business take on it. So, what we are really trying to do is to create good business results through the people by having good people and that really comes down to having people inter-relate. That is how I approach these things.
3. What are some of the important changes that organizations need to look at?
Pete: Helen, do you want to start with the polemic and then we will talk about the reality?
Helen: It is interesting, Shane. We have these quite different views. I come from a background having seen a great deal of Agile transformation and having indeed worked on an Agile education project for several years and have become deeply pessimistic about the ability of most companies to introduce any kind of cultural change at all, whether they want to call it Agile or something else, because I feel that they are unwilling to give up the structures that they already have, the benefits that they perceive those as giving them, to do something quite radical. The original concept of Agile or Scrum is quite a radical one. It involves devolving power really down to the team itself, giving them not just the ability to decide just how long a feature is going to take them or which feature you work on next, but giving them profit and loss for the entire product. That is proper control, that is proper power and those companies simply aren’t willing to do that. Instead they hope to gain the benefits of Agile, they’d like to become faster and they’d like to become cheaper, they would like people to be happier and they like people to be more creative, but they do not really mean it if that means they would have to actually change themselves. So, having worked for a long time in different cultures, I finally decided that the hierarchy was a broken system and that you needed to do something completely different, that the only way Agile or Scrum could work was if you got rid of the hierarchy, if you have a completely flat structure, if you really trusted people to be self-organizing. And I think that is just too radical for most companies.
Shane: Hence you started your own organization.
Helen: Indeed.
Shane: And Pete, the view from the opposing corner, so to speak?
Pete: Well, I do agree with so much of that and the sentiment behind it which is that we need to transform the way business works. I completely agree with that and I have worked with a number of … Digital Equipment was amazing company where they had a very unique, empowered culture; so it was a brilliant place to be. Since then, I have worked with a couple of companies that have built different cultures. I worked with a company in the UK called Nixon Mc Innes and helped that company leverage the fact that they had a different kind of culture in the eyes of its marketplace, and that kind of thing. And for a period it was very successful and did very well on that basis. I suppose I think the question that comes from before is maybe, what you are saying is that is impossible for bigger businesses to achieve and I am not quite so pessimistic. I still hope that it is possible, but the way I imagine it coming about is actually from within. So, I suppose I believe that with smaller groups – I mean, if you start to think about what a company is, we can imagine it as a legal entity or we can imagine it as a board and an organogram with a structure or we could imagine it this way: we can think of it as a series of conversations that are happening and conversation seems to me to be quite fluid. This conversation is not pre-planned, it is kind of emerging as we speak. I do not know what Helen is going to say next or nor does she know what I am going to say. So, the conversation will take a particular kind of flow and the way I think about organizations is a little bit more like that. So, I suppose I think that if you could have the right kind of conversation with somebody who was in charge of running a very large organization, a BT or Unilever or somebody like that, then I think that organization could shift and it could change. Maybe I am less pessimistic for that reason.
Helen: I do not think I would say I was pessimistic, but people are going to have to be prepared to give something up in order to do it in a different way. So, yes, conversations can change, but if you create rules around a conversation, rules like “You can only speak half as much as I can because I am more senior and I am more important” and “I am the one to ask the questions of you and you are not allowed to ask questions of me”. I think that is the way that many companies work. They create these rules that mean they cannot have true creativity or true collaboration and that they cannot delegate the power because they are not willing to give it up and that is in spite of the fact that companies often pretend that is not the case. So, I have yet to meet someone who would honestly say “Command and control is great. I love it and you cannot trust those underlings to do what they should”. No one has said that. They all know they are not meant to say that. But that is what the behavior often seems to indicate. That people really believe this So, that is where my cynicism is, that the difference between the claim and the actuality is so wide.
Pete: I think that is absolutely fair and I certainly agree on this point about rules. I suppose that the real difference we have is about which kind of rules we are talking about. So, in an organization, there are policies and procedures, which is maybe what you mean by “rules”. I think those rules are important because they do dictate things to some extent. But I am also talking about a different set of rules, conversational rules. So, you sit down with the chief executive and you kind of emotionally or mentally doff your cap because that is what you do. Now, again, that is a habit, it is a rule, it is a way of being. In this kind of situations, the question for me is how we would disrupt that? How would we change that? And when I was giving the example of Unilever or BT, what I imagined was somebody would actually have to sit with that person, trying to have a different conversion with them. We can all sit out here and say “Would it not be great if they changed and became more collaborative and more innovative and all those kinds of things? It would be good for employees, good for the economy and so forth”. But us sitting outside it, does not really do anything. The way I believe that change will happen is by people actually having conversations together. Now, I know, I have never spoken to Paul Polman, or whoever runs BT these days, but I have spoken to quite a few senior people in businesses and it is quite difficult because some of the language forms make it very difficult to ask those kinds of questions. So, sitting with someone like takes a lot of personal courage to speak up and say those things. So, often, those conversations do not happen at all. Helen, I think you are absolutely right as well. What you are really asking that other person to do is to change. Because if you are running that organization and you have that position because you are very good at advocating something you talk about or you have been there because you are very good at running in a hierarchical organization – well somebody comes and says “Change all that and make it more distributed, more empowered and so forth”, they are going to go “Well, who are you?”.
Helen: And people only make that change, when they see that there is a real benefit in the change or when they perceive the danger in the state in which they are at that time. So, a classic example is: why do people want to adopt Agile in the first place? Not just because it is flavor of the month, but because people want the benefits. They want to be faster, they would like to be more creative, they are frightened of being disrupted by people who are more Agile, nimble, speedy in response, better at dealing with the customer, better at eliciting customer requirements. They would like all those benefits. I think what I am saying is that those do not come without giving up some of the, and I would even call it, an illusion of control, an illusion of certainty. Few companies are willing to do that, unless the case is desperate or unless there is some shiny example ahead that they are aspiring to or unless there is someone forcing it through within the senior hierarchy. I still don’t think that normally works because the resistance of people in the middle can be so extreme that it stops the change from happening.
Pete:What I have seen happen within large organizations – I did quite a lot of work with the BBC some years ago and what I saw happen there, and it really was a skunk-works type of operation with, inside that much bigger organization, it was possible to create a different kind of culture and a different environment. That is possible.
Helen: There you are, then. That is the point. They got rid of the hierarchy for the skunk-works.
Pete: They did. You are absolutely right. But there is a question about how that then pertains to a bigger organization. So, what happened in that case was there were maybe 100-150 people to develop the different kind of culture and the only reason why it was possible was because there was a kind of barrier essentially insulating that organization from the rest of the organization. Now, at the time, I don’t think I had really ever thought about this stuff clearly enough, but I think that what could have happened, and it didn’t happen, is that that culture could have been in some way picked up and replicated in other parts of the organization.
Helen: A seed.
Pete: It could have been a seed or the barriers could break down and, to some extent, the barrier did break down and people did go off, because fundamentally we are talking about individuals, they did go off into other parts of the organization. So, some people I worked with went into the BBC World Service, for example, and other places. I also saw lots of the individuals who worked on those projects go off and have really good carriers in other places. So, they went to work for Microsoft or Apple or other places and there are really interesting things that are going on in their careers in other places. But, I suppose, if you are asking “Could we step outside of this and kind of orchestrate that process of change by intentionally creating two or three different skunk-work type of things and they are kind of connecting it up?” - possibly, but I also think there is a danger there of me doing what I am kind of doing what I would speak against, which is to kind of imagine it and try to control it. I think Helen is absolutely right. I think what you have to do is you have to work with whatever is emerging and kind of encourage it rather than the other way around.
Helen: I mean letting people self-organize means just that – giving up control even to create what you think is the most perfect situation for them.
Pete: There is a kind of moral thing we are saying here, I suppose. When we say things like “We would like to create better organizations”, we are making a kind of judgment and that is clearly my view. I want that to be a better organization, you do as well. But that is our view, whereas a true self-organization would say “It is not what either of us want, it is what everybody wants”. That is really how these things arise.
Helen: True.
Helen:Well, that is a really good question. I have to say that one of the key points is that I am not sure we would grow to 1,000 people because we absolutely believe in scaling value, not people. So, because we are employee owned, every time we take on someone new, we dilute our own ownership. That means that none of us recruits people because we want to be more important or because we want to empire build. We only recruit someone when we are absolutely convinced that they are going to contribute more value to the company that we are going to give up by having them. We are not into small incremental growth, we are into big value growth. Otherwise, we would not be in it. So, the first point is: I do not know if we will ever get to 1,000 people. Maybe! But the second point, I would say, is that there are companies of that size who continue to have unique, distinctive interesting cultures, Gore is one, Morning Star in the US is another, Valve is not at 1,000 people, but it is pretty big. It is one of the questions we get asked most: “How on earth are you going to do this at scale?” And as I say, first of all, maybe, we weren’t scaled that big, because maybe it is not fun and one of the key reasons we are in Gamevy, one of the key reasons we started it, is to have fun, as well as to make money to live on. Sure, we absolutely want to make a profit, but we want to have fun while we are doing it. And our culture will emerge. But the one thing I am absolutely certain of is that it will continue to be a focus for us because it is part of how we have fun and it is also part of how we succeed.
Pete: You have talked about the DNA, haven’t you? And things like that. I do think that is kind of important. But I am guessing what is behind your question is a kind of concern or something that as we scale or even just with time, the original principles might get lost.
Helen:So, one of the reasons for creating the DNA, for creating a constitution that bound us as a company and bound the directors in the way they are able to behave, was in order to ensure that with our very human natures, we would not give into temptation. A classic example of a rule: we can get rid of the chairman through only 50% of the vote in the democratic decision making vote of the employees. A 50% is all that is needed to get rid of the chairman. However, if the founders or if the company is going to be sold, we need 75% of the vote. And that is very clearly to try and stop the founders, of whom I am one, profiting too quickly when the rest of the employees want to continue with a long term business. We built that in the beginning which you might see as crazy hubris, because, hey, we’ve got nothing or you might feel it sensible because we are aware of how easily ideals get corrupted.
Pete: I suppose that again, this brings us back slightly to where we differ. I think it is very helpful to have those kind of structures in place, but I do not think they would necessarily guarantee success. And what I mean by that is, as you said downstairs, I think people will always innovate around ...
Helen: People can always game a system.
Pete: Exactly.
Helen: We refer to our constitution as being like the sign on a double decker bus. It does not mean you cannot call for stops or make changes, but this is the route that we want to go on and if you do not want to get to that destination, do not get on the bus.
Pete: A kind of declaration of intent.
Helen: It is a declaration, yes. And it does not mean that it cannot change. In terms of companies to follow, there are some really interesting companies that continue to constantly struggle with their culture and how they stay true to their own ideals and how they bring people on board. It is not a conversation that ever stops. You never say “We’ve got the perfect thing and now we never have to look at it again” because, you know, that is not how people work, that is not how marriages work, that is not how any relationships work.
Pete: And that is what I mean by saying it is more like a conversation because and I completely agree: I think for any organization there is something about staying conscious of how the thing is evolving and changing. And calling it a declaration – I think it is kind of helpful if you think about the US Declaration of Independence or their Constitution or our laws in the UK which are constantly under debate, aren’t they? And why do people want a constitution – because then we have something to debate against. But it is the debate that makes the thing real and live and really makes it work.
Helen: Yes. Absolutely. I think the only thing I would say is that my view of many companies is that it is never an equal debate because these power structures are within it that means that some people’s voices are more important than others and indeed, some people do not get to speak at all within that debate. To some extent, and I am very much of this view, what does that matter? If they are doing brilliantly as a company or if people are happy and want to work that way, what does it matter? And it does not. If they are not doing well, if they can be outcompeted, if I am right that companies with a flat structure are faster and more creative and their employees like them more and want to stay there and do better, then they will be outcompeted and that is when it matters. And if people enjoy working in a different kind of culture, then that is when it matters too.
Shane: Great. Really, really interesting stuff and I would love to be a fly on the wall and perhaps we can come back on a regular basis and see how things are going. But, one of the other things that you mentioned you are both involved in is the “Spark the Change” conference. Tell us a little bit about that.
Helen: One of the key things of that is, although I am deeply passionate about Gamevy in the way we are set up, we fully recognize that we are not the only root. One of the things that interested us at the time was talking to lots of other companies about their cultures, about how they solved some of the problems that we were aware of and indeed getting into arguments with people who said “Oh, what a pile of nonsense. You are ridiculous, ambitious hippies. It is never going to work” And as part of that process, of interviewing other companies, of thinking deeply about the subject, of having these arguments, we brought together a community of like-minded people. I say “like-minded”, but they are all doing things differently from companies that are extremely radical, even more radical than Gamevy, to companies that are thinking really hard about their broader social purpose and how they connect to that, to companies that simply say “Help. We have a problem and we seem to have a really high staff turnover” or “I am so frustrated” or “Everyone else seems to be doing it better, why can’t we?” All these people came together. Almost before realizing it, we found we had created a conference which was enormously hard work and now I am not quite sure why we did it, except it was fun.
Pete: Or why you would want to do it again.
That was fantastic because it enabled us to really explore not just companies who are at the leading edge, but companies who were trying to make changes and who were not quite sure if they could, but who then did something incredibly exciting. So, we had a huge number of entries from people doing a range of things – from really big ideas like we are going to let teams select their own bosses, interview and select their own managers to companies doing really quite small things, like we are going to have a “kudos” board and we are going to make sure that we say “thank you!” and practice gratitude to our colleagues. From that, we short-listed a number of companies and interviewed them in depth and the runner-up was Markel International, who were doing what some may think was a fairly standard Agile transformation, but they were doing it in fact, I think, very intelligently, who were aware of the painful trade-offs that they would need to make and who were struggling with that process, but who were very honest and open about it. The winner may be a surprise to some people was GCHQ who have, of course, a long tradition of technical innovation, but who as part of that, are very aware that they need collaborative and team innovation as well and who were introducing some fascinating structures into their work, from running innovation labs in which they elected their own team leads, to different ways of trying to connect people cross-functionally, who were very open about a really extraordinary diversity program. I was blown away not only by the extent of what they were doing, but by the intelligence with which they were doing it. They really faced, what I am saying that a lot of companies do not do, don’t understand what they have to give up, the control they have to give and therefore see their programs fail. I thought GCHQ really understood what they would have to change and saw the root causes and the effects of that and made a real change.
Shane: And we published articles about both of them and we will do the same this year.
Helen: Fantastic. So, I would like to see lots of applications from interesting companies.
Shane: Well, Helen, Pete, thank you! This has been really interesting. Enjoy the rest of the conference!
Helen: Thank you very much. Thank you for having us.
Pete: Thank you, Shane.