Who runs a “democratic” company?  Do you elect people to do it?  We do!  And it looks like it’s working, too!

Who's our leader?

In order to run Nearsoft democratically, we had to figure out how to include employees in making the big operating decisions.  In most places, top management gets together, talks/argues/whatever and then makes a decision.  The decision.

Given Nearsoft’s regime, the question was how to and who should be involved in making these decisions.  As we’ve done often throughout this transformation, we took inspiration from Ricardo Semler.

As in SEMCO, Ricardo’s company, the Nearsoft philosophy is that the people most affected by a decision should have a hand in making it.  On the other hand, it would be too cumbersome to have everybody involved in all aspects of every decision all the time.  A particular employee may not even be interested in one issue, even if they are passionate about another one.

So, we instituted an Operating Board.

What Does the Board Do?

This Board considers the options, narrows them to a reasonable set of choices and then publishes the choices as well as its recommendation to the employees at large.  If there are no major objections, then the recommended solution is implemented, otherwise the Board goes back to the drawing board (no pun intended).

Board Structure

The Board consists of eight people.  I am not sure where that number came from, but it seems to work well.  It includes three people chosen by “management” (my partner and I) and three others elected by popular vote, instant runoff style (i.e., everybody had to recommend six people in ranked order).

The last two seats are left open for anybody who wants to attend a particular meeting, first-come-first-served.

Seats in the Board last for six months after which we’ll have another vote to select a new Board.  Come to think of it, we don’t have any stipulation as to whether or not people can serve multiple consecutive terms.  We’ll see when we get there.  Actually, the Board ought to take up this question in a future meeting.

Our Internal Wiki

BTW, we couldn’t do this, or, at least, it would be very awkward to manage all this without our internal wiki (thanks PBwiki!).

The Board agenda and minutes are posted to the wiki.  Anybody can modify the agenda or comment on it.  The same is true for the minutes, where people can voice their objections or just add a question or comment.

To participate in a meeting, people sign up for one of the open seats via the wiki, too. It’s based on the honor system and if the seats are taken, you are not supposed to remove somebody’s name and add your own (although it is perfectly reasonable to try to convince one the people signed up to trade with you for a particular meeting).

How Is It Going?

So far, it is working pretty well.  As expected, we had a couple of hiccups, but nothing major.  I suspect that more will come up (i.e., more material for future posts).

One of the first Board recommendations was to reassign an engineer from one team to another.  The “losing” team heard about this “in the hallway” and all hell broke loose.  They reacted the traditional way and immediately called “the Boss.”  To make matters worse, “the Boss” (i.e., me) also reacted the traditional way.  Luckily, my partner kept a cool head and nudged us all back to the new way of doing things.  I got out of the way, the affected team talked to a couple of people in the Board, and the Board changed its recommendation.

We ended up with a better decision and everybody involved ended up more empowered from the experience.

Why Do This?

As we build up more of this experience throughout the company, we’ll be better equipped to scale the company with minimal overhead.

When people have a mechanism for making decisions by themselves, they don’t need a management hierarchy to do so for them.  No management hierarchy means a lean and lower cost operation.

It also means creating a team of empowered, responsible adults who are happier and more creative.  And for a technology company like Nearsoft, that’s “money in the bank” for us and for our clients.

Other Resources

Thanks to Mary Wilson who, very generously, said this, “I want to suggest an article I recently found and loved. It gathers some very inspiring TED Talks (including Ricardo Semler’s). I found there a few ones that I didn’t know and are highly recommended.”