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InfoQ Homepage Interviews Nathan Donaldson on Building a Freedom-Centred Organization

Nathan Donaldson on Building a Freedom-Centred Organization


1. Good day, this is Shane Hastie with InfoQ and we are here at Agile 2014 and I’m talking to Nathan Donaldson. Nathan, you and I know each other well, in fact we are compatriots, but most of the audience won’t know you, so would you mind briefly introducing yourself?

Sure, that would be great, thanks for having me along Shane. So I’m Nathan Donaldson, I’m the CEO of Boost New Media which is a very small application development shop and Boost Agile which is an Agile Lean Consultancy working across New Zealand and East Asia.


2. And I happen to know that you are doing quite a lot of work in China in particular, you want to tell us a little bit about what’s going on there with Agile?

Yes differently, so we’ve been based in Shanghai for the last two and a half years and we work mostly with large multinationals over there, but we see a very wide range of people, there’s a thriving Agile Community in Shanghai of around 700-800 agilists and another 300-350 agilists interested specifically in Sales and Marketing using Agile Sales and Marketing, which is really interesting. So we are involved with Agile Community, the Sales and Marketing Community and the Lean Startup Community specifically. So we are out and meeting people, we are working with teams, leaders, are we seeing, you know there is a lot of Scrum going on over there and an increasing amount of Kanban as well and then some of the multinationals also doing SAFe implementations as well.

So one of the questions I get asked all the time is how is China different from working in New Zealand or in the States and I think the thing that we’ve noticed is how similar people are rather than how different they are, and the similarities really lead you to the same places so while traditionally you might view China as a very hierarchical society, a sort of command and control approach, that is not too far different from what we’ve seen a lot of large corporates anyway, and when you get down to that team level and the product owners and the product managers, they are passionate to be able to deliver value to their organizations and of course to their users, and so working with them on the Agile principles and values is just obviously a delight, they love it - it improves their life, improves the work they do, it’s a lot of fun.

Shane: One of the things that I’ve heard said, and perhaps you can comment, there is a lot in the Confucian philosophies that actually align well with the Agile practices and values and principles.

I haven’t heard that myself but I can imagine that it’s true, I mean there is a great deal about respect and how you interact with people, the Confucian relationships lay out very clearly how you should react to people around you, and if you are working with persons a lot of respect in those situations, so I could see that.

Shane: Great. Now at the conference your talk was titled Working in a Freedom-Centered Organization.

Yes, that’s right. So the title was Beyond Servant Leadership, so looking at what structures within an organization can support Agile teams, looking at the fact that servant leadership’s a really key part but it really addresses certain people within the organization, not necessarily every person from the receptionist right through the CEO and so the idea of freedom centred leadership is about embracing the principles of organizational democracy around integrity and respect, genuine choice, transparency, inspecting and adapting. There is a very close alignment with our Agile values but the post that deliver that make sense to people outside of Agile software teams, so we were lead as an organization ourselves, to organizational democracy and freedom centered leadership by becoming more and more Agile, so as Agile pushed out through the teams and then we started to adopt the values and principles into the management of the company. We quickly realized that, actually I would say we slowly realized, that we will becoming a freedom centered company.


3. What is it mean to be a freedom centered company?

I suppose at the heart of it is that, most of us we live in these democracies, we get some genuine say in how our lives are shaped and then for very many of us we come to work and all of a sudden we are in not a democracy, we are in a place where we are told what to do, how to do it, when to do it and it’s not a fulfilling way to work. So we looked at it and looked at the Agile values, and wanted to create an organization where people were genuinely able to commit to the purpose and vision of the organization and we are able to contribute in their own way and not specifically a way that someone above them had decided, and that means that we set our strategy together, year on year, we are completely transparent financially. We are working on ideas like sitting around salaries rather than having them dictated from above. We don’t have any formal processes for spending money, so the teams are able to go and buy what they need to do their job; we engage in genuine dialog and listening, so rather than it all coming one way, we really try to use some of the tools that come through the Agile World like retrospectives to get that diversity of opinion out and get the value of that diversity of opinion.


4. One of the things that I know you and I had a conversation about a while ago, was when you were talking to your teams about people setting their own salaries, that’s a bit extreme isn’t it? How do that go?

It’s just funny, you know we’ve talked about it maybe two or three times now and the level of comfort with the ideas decreased over time, so I’ve got a lot of work to do there; as the business owner, I’ve been setting my own salary for well over a decade now and so it’s easy for me to feel very comfortable with it, and I think that when we first talked about it there was maybe a split half, half within the company, so half of the company were like “we can set our salary tomorrow”, and the other half “I’d prefer if you are able to give me some guidance so that I knew what I’m worth potentially”.

So what that told us is that we needed to do a lot more education and put a lot more support around people and that’s really what we are trying to do. So the sort of model we looking at at at the moment is people know how much money they need to live on, we will provide the market salary information so they can benchmark against the rest of the industry. They will have full access to transparent financials so that can see how much moneys are available for paying people. And then the check & balance as that we will have anonymous evaluation by the whole team of every individual to say yes, that’s an appropriate amount for that person to be paid.

So in order to increase the level of comfort that the team has with us, I’ve made my salary transparent to the team and our general manager has been the first person to set her salary. She has a set of KPI’s that she’s working to, and she will be anonymously evaluated by the team, so the team will know exactly how much she earns and that starts at the first of the month [September 2014], so that’s going to be the first step down a long road, I don’t expected to be quick. The same with the financials, the transparent financials, we begin sharing the financials over a year ago, we had a big screen set up in the office that showed out gross profit and our net profit, both on a monthly and a yearly basis, tracking against a budgets, year-to-date, a project dashboard with graphs and stuff. But what I found was that the level of financial literacy varies very dramatically across the company, again I perhaps hadn’t thought about it deeply enough, for me I’m working with the balance sheets and the profit & loss day to day, and so although all that information was up there, it wasn’t assimilated and used by the team. Also we didn’t have an automated way to get that out of that bookkeeping and onto the screen, so there was an additional friction and so the timeliness wasn’t as good as I’d like. So we stopped doing that when we had an earthquake and Wellington and the screen felt on the ground and smashed, so that was sort of a sign that maybe we should look at something different.

What we did is we went back to the team and said “ok, what’s going to work for you?” In fact that’s not completely accurate, we were doing some setting some strategies and the team sit to the business, we want more financial transparency again, but let’s think about a way that works for us better. So now we do monthly in-person meetings where we give the raw data and then we unpack the meaning for the team, which is much more useful, because as you know working in New Zealand, New Zealand effectively shuts down for half of December and most of January, and so while you don’t have that steady flow of income year-round, so you need to be able to bank some income to overcome that period, so being able to explain that to the team to just say: “Ok, things look really good in November, we need to put some of that money aside so that we can make it through that period whenever everybody is off work”, so that they can see that ebb and flow of the year.


5. You are right, the country does truly shut down, it’s a wonderful summer break. One of the things that we were chatting about earlier is how empowered teams actually end up working?

Yes, I mean it’s a, we’ve been running our teams as Agile teams for six or seven years now and the changes have been quite dramatic. One of the biggest changes we saw was, when we truly empowered them to be responsible for the quality of the work that were doing and empowering them not just on an individual level but on a team level as well, so saying to the developers and testers and the designers, you are responsible for the quality of your work individually, because you are committed to it with your team and as a team you are also responsible for the quality of your work, and then giving them, empowering them to make decisions about how they could achieve that quality, so sometimes we see that teams are told that they need to produce high quality code but anytime they ask for resource to improve the quality of the code, they’re told to work on features, they need to keep pushing work out the door.

So a combination of making people responsible for the quality and then empowering them to come back to the business and say: “We need to spend some time to increase our automation” or “we need some time to investigate some tools for continuous integration”. And so what I’ve seen over time with our teams is that running great retrospectives leads the team to identify issues that some of the XP practices are there to solve, and so organically without any prompting the team will say: “Ok, we’ve identified this issue, now I think the best way to do it is to start pair programming”, for instance, and I remember one retrospective the team said: “We’d love to start pair programming but we really don’t know where to start” and so one of the team put their hand up and said: “what I’ll do is I’ll write a blog post about it, that’ll force me to do research, and I’ll write a blog post and then we’ll talked to our client - because we are in a vendor-client situation - and we’ll explain to them the benefits, we’ll have some information to go with it and then will start pair programing and provide the value”. So over the course of 6-8 months I often see these high performing Scrum and Kanban teams, adopting pretty much all of the XP practices, pair programming, code views, simple design, test driven development, behavior driven development, and of course the results speak for themselves.

They also tend to take a bit of a deeper view of some of those practices than if they are forced on them, so test driven development being a prime example where often I’ve seen it forced on people where seen is really just a code quality thing, where if you look back to the original reason, originals reasons, one of them is clearly about the design of the code and some opportunity to do the design before you write the code, and so when the team get the chance to investigate that stuff themselves that can have a much deeper understanding and it’s something that they want to do and they own rather than been pushed on them by the organization.


6. Some of that autonomy stuff again. To wrap up, you said to me that Boost Agile is in fact the only certified democratic organization in New Zealand, is this?

Yes, so is Boost New Media, two different brands, but Boost New Media is the only certified democratic organization in Australasia.


7. And what is that mean to be a certified democratic organization?

So there is a group called World Blue which is”Worldblu” and they are passionate about democratic organizations and they have a democratic design survey that they run every year, so when you engage with them you take the survey, it goes out anonymously to the whole team, you have to get 85% response rate from the team, so showing some engagement, some commitment to it, and then you are evaluated against the ten principles of organizational democracy and they’re broken down into different things, and it is really looking at the design of your organization, so the rules and processes that you have in place that enshrine freedom and freedom centered mindset and thinking and leadership in your organization. And once you reach a certain point, so I think you have to score over 3.75 on their scale, then they say you are one of the most democratic organizations in the world.

But definitely for us, and I think for all democratic organizations and Agile organizations as well, it’s a journey not a destination, so when we decided to become democratic or to step on to the road of becoming democratic, we definitely identified that we will never get to an end-state, we would just constantly start shifting and morph into something that was better and better, and suited the environment more and more, and so we’ve done quite well, the first time we took it we were certified as a democratic organization which was very exciting for us I think and exciting for the team but it identified some places where we were weaker than in others. For example succession planning: if the leaders of the organization were to leave would that freedom centered mindset carry on, and so that really encouraged us to say: “Ok, so how can we make sure that is not just a transient thing, that it’s enshrined in the culture of the organization”?


8. Can you summarize the benefits that your organization has got from this?

Yes, I think one of the key benefits is that everybody in the organization understands our purpose and vision and that’s not because its written above the door or on a fancy carved rock shrine with our values and our purposes, it is because they co-created it, they were instrumental in deciding what that purpose and vision was going to be, so that they had a personal stake in it So that’s the first step you’ve got, a true purpose and a true vision for the organization that everybody has agreed to and has created, then giving people transparency, giving them access to information and empowering them to make choices about the work that they do, treating them with fairness and dignity, understanding that it’s about the individual and the collective, not one or the other. That allows them to truly commit to the organization and that’s seen us weather financial storms that come and go; it’s seen us make some quite large decisions that have had a huge impact on the business, so for instance it was the team as a whole that decided that we should launch Boost Agile as an Agile Lean Consultancy as a separate brand from Boost, so the team when we were doing a strategy setting meeting one year, looked at the work we’ve done over the year and clearly identify that as Agile developers, we were spending a lot of time educating clients and supporting clients to be more Agile and get the most out of us, as well as spending a lot of time educating ourselves, so as people come and we up skilled and they decided that this was a useful and valuable commodity or service that we could offer the market, and so that’s how they came to be a separate brand and that’s was one of our core goals was to launch that brand into the Wellington market and for three years, that was our highest goal, has determined by the team, so makes a big impact, but it’s also personally allowed me to take on that strategic role rather than being stuck on in the operational, so in my family we are sort of command and control monsters historically, my sister would say that we are control enthusiasts and so, it’ been a way for me to formalize letting go of that command and control nature and the nature of micromanagement so that I can truly empower the teams.

Shane: Wonderful, Nathan thank you very much for taking the time to talk to InfoQ today and good luck in the future!

Thanks you very much Shane, it’s been a pleasure.

Jan 09, 2015