Maciej Galkiewicz

How Repairing My Car Exposed How I Make Decisions

Tue, 10 Feb 2026 06:05:00 +0000

My old Honda, in the countryside with the youngest member of my family.

“The oil leaks, and the engine needs to be replaced,” was what I heard from a mechanic at a shop I’d used for many years.

They knew my car well and had already tried a few less invasive and cheaper solutions to the problem.

Everyone told me that Honda engines are pretty much indestructible and that I was very unlucky that mine had started leaking like this.

That’s when the abstract idea of “a problem” turned into a decision I actually had to make.

There were a few solutions I considered: repairing the car, selling it and buying another, or selling it and living without one.

Not all of these options felt equally realistic. Ruling out the last one was the easiest. No matter how I looked at it, my family needed a car, and owning one rather than renting was almost always cheaper and more convenient. Relying on bikes, buses, or trains didn’t work for our use cases.

That left me with two real options.

Repairing the car had one big “if”. It was relatively expensive, but it would be okay if the problem was solved on the first attempt.

My car is several years old, and replacing the engine is uneconomical unless you buy a used one. But you never know what you are buying. There is no way to be sure upfront. If you get a bad one, you might need to replace it again—and the cost spirals.

Given how uncertain all this was, I wanted more opinions.

I spoke with a few trusted mechanics, hoping for clarity. I didn’t get it. One advised selling the car after a streak of bad engine replacements. Others were cautiously optimistic, but none could say how likely success really was.

After collecting different perspectives, I noticed something else: before I reached a conclusion, my body already had a reaction. I was subconsciously evaluating how I’d feel if the new engine failed.

That bodily signal made each possible outcome feel more vivid. I started asking myself: Would I feel bad that I perhaps made a bad call? Or would the additional money and trouble be acceptable, knowing the problem would be solved?

As I felt it physically, the risks, costs, and inconveniences became just factors; what really mattered was how I would feel at the end.

With that realization, I turned to the second option: selling the car and finding a new one. I figured it made sense to look for something newer, but still used. The scenario was less vivid, since I didn’t have a specific car in mind.

To make it more concrete, I needed to see an actual car. After a few conversations with my wife, we picked a model that seemed promising, and I booked a meeting at a local car dealer to have a look and a quick ride.

I took it for a short drive with my favorite music playing. It felt nice—comfortable, modern, effortless. And that was the moment I realized: I didn’t need it.

Objectively, the decision made sense. Upgrading to a newer car would be rational for many people—higher reliability and new features for the next 10 years. But for me, the money required for that difference wasn’t worth it. After mentally running through it, I realized it wouldn’t make a meaningful difference to me personally.

The engine problem, however, wasn’t going away. Even as I considered whether a new car made sense, I knew the old car still needed attention. Selling it—or repairing it—remained part of the puzzle, and I had to weigh each possibility carefully.

One of the mechanics had already offered to buy it, knowing exactly what was wrong and able to fix it himself. It was a clean exit: less risk, a reasonable price, and the chance to move on.

When I finally called him, the offer was acceptable but not great. Almost immediately, I started second-guessing myself. Was I overreacting? Was the risk really that high? I still couldn’t decide—I needed to imagine how each option would actually feel before committing.

After mentally walking through repairing the car, selling it, or buying a replacement, the decision stopped being abstract. Cold calculations gained emotional context.

That led to a second revelation. I was not only making emotional decisions, but I was also okay with whatever scenario I would go with. My options stopped being some abstract future. I could sense each one, imagine my emotional state within it.

I struggled with uncertainty, with the idea of doing something that might make me feel bad. Now, the unknown was largely gone, and I could pick any option without much worry.

Looking back, the way I made the decision surprised me.

From the outside, a rational decision looks like optimizing costs, probabilities, and outcomes.

From the inside, it feels like choosing a future you’re willing to inhabit.

By the time I decided what to do with the car, I had already lived through each option in my head. That didn’t make the risks disappear, but it made them familiar.

In the end, my choice wasn’t about logic alone. It wasn’t about the lowest cost or the smallest risk—it was about which future I could live with, the one that felt right once I had imagined it fully. By exploring how each scenario would make me feel, I didn’t just calm my nerves. I uncovered which options were truly practical, manageable, and aligned with my life.

What I experienced isn’t just introspection—research suggests it’s how humans actually make better decisions. Emotions act as signals, helping us weigh factors that can’t be easily calculated: the uncertainty of a used engine, the hassle of a failed repair, or the value of comfort and familiarity. When we bring these signals into the decision process, we can avoid costly mistakes, focus on realistic options, and choose paths that both satisfy us and make sense in the real world.

Maybe people can’t be purely rational—and maybe that’s a good thing. Because decisions that account for how we feel don’t just leave us at peace—they often turn out to be better decisions in every meaningful sense: practical, livable, and aligned with the outcomes we actually care about.

How to Dismantle a WWII Bomb

Fri, 23 Jan 2026 05:05:00 +0000

Knock, knock. Who’s there?

I’m asleep when I suddenly hear my intercom ring.

Since I have kids, every suspicious sound wakes me up immediately.

I look at my watch. It’s almost midnight.

I quickly assess that it’s probably a prank.

I value my sleep, so I decide to ignore it.

Five minutes later, I hear noise on the staircase.

Shit. This might be something more than a prank.

I get up, go to the front door, and look through the peephole.

My neighbour is talking to a police officer.

That’s interesting.

Thirty seconds later, a police officer knocks at my door.

I open the door, and the light from the hallway blinds me.

I ask what it’s all about.

The police speak in German. I’m not a native speaker, and in my half-asleep state, I struggle to understand what they’re saying.

Then they say something I immediately understand.

“There is a bomb. We are evacuating the neighbourhood.”

“There is what?!” I say.

“There is an old bomb a block away from here. I need to know if you want to evacuate or stay.”

Wow. At least I have some options.

“Can I think about it for five minutes?” I ask.

“Sure, but be quick.”

I close the door. My wife has gotten up in the meantime; she already knows what’s happening.

My first thought: we’re probably more likely to survive a bomb than the chaos of waking the kids, getting them out the door, and wandering God knows where for God knows how long.

We receive an emergency message on our phones explaining the situation in more detail.

A Second World War bomb has been found in the river next to us. It’s at least a block away, but technically, we are still within the impact radius. A team of sappers is supposed to come and disarm it, but for security reasons, they are evacuating the neighbourhood.

The bomb has been there for 80 years—can’t it wait until morning?

But back to the evacuation.

How do we decide what to do?

“I have an idea!” I tell my wife.

I open ChatGPT and start typing.

The prompt goes more or less like this: How many people died over the last 20 years in different European countries from unexploded bombs?

GPT gives a nice summary. In short, a handful of people died, and generally those who discovered bombs or technicians trying to disarm them.

I hope GPT is not bullshitting me this time. I check the sources, and as far as I can tell from this quick research, the risk is small.

My brain is shouting, Works for me! I really just want to go back to sleep.

I talk it through with my wife, and we quickly estimate the likelihood of being blown away. It’s orders of magnitude lower than the risk of crossing the street and getting fatally hit.

We were also relatively far from the location of the bomb, and our building stands behind other large buildings that would absorb the blast first (not that I know anything about the impact of an old bomb; this is just my mind trying to make sense of the situation).

We decide to tell the police that we’re staying and then go back to sleep.

We woke up at 7 a.m., and roughly fifteen minutes later we received a message that the bomb had been disarmed.

The situation was serious, yet the next few days brought some funny conversations with our neighbours about the whole event.

It was so abstract and unexpected that we could barely believe it had actually happened. And at least among the few people we spoke to, others had also stayed in their apartments.

When we told this story to our family, however, they weren’t amused.

My mom literally said that I risked the lives of my family and that it was a reckless thing to do. Five minutes later she didn’t look particularly bothered, so maybe she just said what she thought was the right thing to say. In the end, it didn’t feel like a big deal to her either (love you, Mum).

Despite my mom calling it reckless, the true danger was minimal. This is exactly the kind of mismatch between perceived and actual risk we see in many areas of life, reflecting the different psychological shortcuts people subconsciously use.

For example, parents may be afraid of their kids being kidnapped—an event that is extremely unlikely in a country like Germany. Or people may be afraid of flying, despite it being one of the safest modes of transport.

I’m a fan of developing and using intuition, but there are cases where it leads us astray and makes us act when action isn’t needed.

Our decisions don’t exist in a vacuum. Investing time and energy to reduce one risk automatically comes at the expense of addressing others—risks that may be just as large, or even larger.

Take the chances of having a long-lasting and happy marriage. In the US and the UK, roughly 40–45% of marriages end in divorce. The odds of success aren’t far from a coin toss.

If you live in one of those countries and you are married, it’s worth asking: what do my spouse and I do differently from the average couple to increase our chances of staying married? Are we really that different from the mainstream? Do we actually do things our friends don’t—friends who might already be divorced or struggling?

Every step we commit to requires time and attention, resources we might not have if we’ve already spent them elsewhere.

So, as my wife always says, when our kids challenge us: pick your battles wisely.

Why Reviewing My Decisions Taught Me More Than Writing Them

Tue, 09 Sep 2025 05:05:00 +0000

The original decision journal template from Farnam Street.

In 2016, while I was reading everything I could to improve my skills and keep my company afloat, I stumbled upon Peter Drucker’s book Managing Oneself.

I remembered one thing from it—you should leverage your strengths. You need to understand them well—and also what’s blocking you from reaching your full potential.

In order to discover your strengths, Drucker advises writing down what you expect will happen every time you make a major decision or take a key action. After nine or twelve months, you should review your assumptions against the actual results to get insights. In his own words:

“Practiced consistently, this simple method will show you within a fairly short period of time, maybe two or three years, where your strengths lie—and this is the most important thing to know. The method will show you what you are doing or failing to do that deprives you of the full benefits of your strengths. It will show you where you are not particularly competent. And finally, it will show you where you have no strengths and cannot perform.”

A year or two later, I learned about another method, Decision Journaling, from the blog Farnam Street. The idea was to record your decisions, ideally in a standardized way, to improve your decision-making over time. This immediately reminded me of Drucker’s book. Whenever I hear about something from a few reputable and independent sources, I’m often willing to try it.

Over twelve months, I wrote down five decisions I thought were worth learning from. I noted the context for each decision, the problem statement, different scenarios of what could happen, etc. I also reviewed them after seven to sixteen months, depending on the decision.

And, to be honest, I hadn’t learned anything valuable enough to keep me going. The process was off-putting, felt like a duty, and the insights from comparing what I imagined with what actually happened were relatively minor. I’m a fairly disciplined person, and I understand that often you need to be patient and keep going to get results. But in this case, it was simply too dull to sustain. I dropped the idea and moved on.

Four years later, I became interested in decision-making again and thought it would be good to revisit my notes. I knew it might be an interesting and sometimes embarrassing experience, similar to looking at your old photos. It turned out to be a good call. I was astounded by what I saw.

My writing was chaotic, lacked clear objectives, was full of imprecise language, and sometimes even lacked conviction. Above all, I approached the exercise in the wrong way. I intended to justify the decision I’d already made, instead of trying to explore what might have been the best option. No wonder I didn’t see improvements in my decision-making.

At the same time, I had completely forgotten that Drucker wanted me to discover my strengths—not directly improve my decisions. I mixed up, on the surface, two similar methods and forgot the difference between their purposes. Nevertheless, reading the notes after a few years gave me an unfiltered view into my past thinking.

Not all the insights were new, but I could see more clearly how my thinking had evolved. For example, I’ve become better at imagining a wide range of outcomes. On the other hand, I’m not so good at assigning probabilities to events or creating contingency plans. This level of detail in my strategic skills makes it much easier to introduce targeted improvements.

There are two main lessons I’ve taken from writing down my decisions:

In the short run, structure matters. Unless I clearly define my objectives, assumptions, possible solutions, and the probabilities of different outcomes, I get little value from the process. When my notes are too abstract or vague, almost any result can seem to “fit,” which makes it impossible to judge how strong—or flawed—my decision process really was.
In the long run, even chaotic notes reveal patterns. Revisiting them after a few years showed me which parts of my thinking had grown stronger, which remained weak, and what that said about my strengths and weaknesses. As Drucker suggested, this kind of clarity only comes with time.

If you’re considering—or already keeping—a decision journal, be clear about your purpose. If your goal is to improve your decision-making in the short run, focus on structure and clarity so that each entry gives you actionable feedback.

If your goal is to better understand your strengths and weaknesses over time, focus less on perfection and more on consistency. Write regularly, then revisit your notes when enough time has passed to reveal patterns in your thinking.¹

Most importantly, don’t confuse these two purposes as I did. Mixing them together left me frustrated in the short run and nearly caused me to abandon the practice entirely—when in reality, the long-term value was waiting for me all along.

Notes

To avoid confusion, decisions should be reviewed within roughly six to twelve months of writing them. That’s usually enough time to compare what you thought would happen with reality. This is what both Drucker and Farnam Street advise. But apart from that, to see your strengths and weaknesses better, you need to read through them again, likely after a few years. ↩

Escaping the Noise and Hype for Better Judgment

Tue, 02 Sep 2025 05:05:00 +0000

Photo by Michael Dziedzic on Unsplash

Another 15 minutes of my life eaten up by LinkedIn’s feed.

I admit, they are really good at hijacking my attention. Yet most of the content I see is noise. By noise, I mean shallow updates that don’t deepen your understanding or offer meaningful help.

“ChatGPT just killed…”—accountants, or some app, or the entire industry made up of hundreds of thousands of people.

“You can now build a 1 billion dollar company with…”—fifteen people, or ten, or three, or even your dog could do it.

“YC has just announced it will fund…”—essentially just AI startups doing all sorts of automation.

“Lovable has just generated ten random apps for me…”—while I was sleeping, so I could test them with the market in the morning using even more automation and with even less actual understanding.

“Company X just got acquired for $2B…”—and it was “wild” because it just meant the acquirer just hired the founders as employees and fired everyone else. So much value created for shareholders.

“AI just traded for 3 hours…”—and made a context-free amount of money in a timeframe too short to matter.

Most of the content is superficial, mixing authors’ beliefs (not facts) with excitement, guesswork, and overgeneralizations. It doesn’t include understanding or any true insight that would help the reader reach their goals. But it still consumes our time and shapes us subconsciously.

For example, when ChatGPT kills someone or something, what does it really say? That it got better at performing a certain task. If it was really relevant to me, I would probably discover it anyway while using it. I would judge its usefulness to me firsthand, and no one would need to be killed in the process. Are all these people going to lose their jobs? No one knows. It’s a prediction without much supporting evidence.

The problem with noise is that it can be mistaken for a signal. It can seriously distort our judgment, leading us to chase flashy distractions instead of focusing on what truly matters in our context.¹

If I were to treat such content as a signal, my learning would be something along these lines:

As a founder, I need to build something in the AI space. Literally nothing else matters.
I should be so productive that I barely need a team.
Automation is key to my success, or at least without it, I will be too slow to outcompete anyone using it.
The industry values AI companies, buys them quickly at a high price.
AI can decide better and faster. All it takes is just feeding it with all kinds of data.
Since everyone is doing it, and the market rewards them, I need to do it too! And now!

These statements can be useful, but they are not hard facts, they are just beliefs that are not necessarily always true. But if that’s (almost) all you see in your feed, they can start to feel like the only true way forward. At the same time, there is no magic recipe for success. We are all different, coming from different backgrounds, having different experiences, upbringings, goals, beliefs, skills, and preferences.

We need to find our own way, aligned with who we are. But it is difficult if your mind is cluttered. If your emotions are constantly telling you—”There’s a gold mine right there, it’s obvious, just grab your pickaxe and go.” Good judgment requires mental space to learn and reflect. If you have twenty conflicting ideas in your head, constantly fighting for your attention, you won’t get good results.

Now, in a world full of noise, it is too easy to get distracted. Too easy to spend time scrolling feeds. Too easy to develop harmful emotions like the fear of missing out, which clouds our judgment. If you are a founder, investor, or leader, you want to focus on what matters. Your job is to filter out noise and focus on the signal. Otherwise, you will lose track of what you want and why, and what really helps you get there.

How to protect yourself? Turn the thing off, or at least moderate what you consume. I personally prefer the former, but when I eventually open LinkedIn to engage with my connections, the feed is always there waiting for my moment of weakness. Higher hygiene, meaning some level of moderation, seems inevitable.

Notes

My favourite read on the concept of noise and signal is The Signal and the Noise by Nate Silver. ↩

How Lacking Intuition Made My First Angel Investment So Hard

Tue, 26 Aug 2025 05:05:00 +0000

Global Changer’s team at their 2025 offsite.

In May 2021, after more than a year of building my pipeline, reviewing pitch decks, and talking with founders, I decided to make my first angel bet on a Berlin-based startup—Global Changer.

It was one of the hardest decisions I’ve ever made, but not in a way you might think.

It wasn’t about high stakes, uncertainty, time pressure, or any other kind of drama. The difficulty came from an unexpected but, in hindsight, obvious place. I had never made an investment like that, so I lacked tacit knowledge.

Tacit knowledge is gained through experience—it’s hard to codify or capture in a book. Imagine trying to learn how to ride a bike. You can theoretically read about it, but you won’t really learn until you try. It’s this kind of knowledge that fuels the intuition we rely on to make decisions.

In my investment case, I could analyze a startup by applying commonly used evaluation criteria. I could look at it from different angles and score their perceived performance. In the end, I had a decent overview of their strengths and shortcomings as a team.

I couldn’t, however, extrapolate what I saw and make an educated guess about the progress they could make in the following months. I lacked the tacit knowledge for this kind of decision, which made it hard to make the call.¹

Tacit knowledge only comes from doing. If you talk to hundreds or thousands of startups, at some point, it becomes easier to say: “These guys know what they are doing, they have some shortcomings, but I think they have a real shot at making it.” At the time, I didn’t yet have the benefit of that much exposure.

Eventually, I realized that it was a leap-of-faith moment, and I simply needed to decide. Otherwise, I would never make progress and develop the necessary experience. At the time, it was a fair assessment of the problem, but in hindsight, my approach could have been better.

If I had had to decide again, I would have started the process with the intention of learning and developing my intuition, rather than just investing. It would have given me a different perspective on how much money to invest or what kind of external support I might need (like involving an experienced friend).

My experience with that investment is just one example of how important intuition and tacit knowledge can be. Many real-life decisions, like changing jobs or moving to a new place, also benefit from it. Having an analytical process is not enough. A good decision at the end requires both analytical thinking and intuition.

Notes

Early-stage startups are very risky investments—most of them fail. When making an investment decision, I focus primarily on the team. I can’t know for sure whether what they’re building will succeed. What I try to assess is their ability to generate strong ideas and execute them well, so they can ultimately reach their goals. ↩

How context building and delegation of authority can strengthen small organizations

Mon, 07 Jan 2019 08:14:00 +0000

The entire company at a feedback workshop in Lodz, Poland during October 2018.

Introduction

I’m a big proponent of the belief that “if you want to change the world, start off by making your bed.” ¹ This approach works just as well for organizations, in my opinion. If they want to change the world, they need to take care of themselves first. The best way to improve your company is by focusing on the development of its employees. If they are empowered to make quality decisions and take action, the chance of them accomplishing something outstanding collectively increases exponentially.

In this article, I’m sharing a story of how our company faced challenges related to our identity as well as financial and engagement crises, and how we eventually overcame these problems. My hope is that our obstacles and our solutions can help you to deal with challenges you might be facing right now. As a result of building more context and delegating authority, we managed to make our teams more collaborative and engaged, improve their skills, and strengthen our organization overall.

Why we needed to change

We are a software development company in Poland. Our organization consists of teams that are comprised of 1 to 6 people, who work on projects, typically one project per customer. Our main focus is on building web applications and server infrastructure for startup companies. The entire staff has been working remotely since the beginning of 2006. We have had around 20+ employees since we began our journey to become a more open organization.

Every company faces challenges. There are always short- and long-term needs that have to be balanced appropriately. If we focus too much on the former, we may go nowhere. When we do the opposite, we may never reach the future that we are trying to achieve. At some point, we encountered a combination of both types of problems at Ragnarson. As you might expect, we didn’t handle these issues as well as we could have initially. Despite our best intentions, our organization was far from our ideal vision. The problems were getting bigger; it was becoming harder and harder to fix them. We knew that we needed to change our approach.

Development of our team

We are enthusiasts of a T-shaped skillset where individuals possess specialties with deep expertise in one field in conjunction with broader general knowledge. This type of skillset makes them better specialists and enables them to collaborate with experts from various fields. Moreover, T-shaped individuals tend to look at problems more holistically. They usually appreciate the complexity of a modern world and tend to have more mental tools at their disposal. This all leads to a greater capability among such individuals, which positively impacts their productivity. ²

The problem with our organization was that it did not effectively develop such individuals. At the time, we had mainly one expectation from our software developers - writing software for our customers. Project management was mostly taken care of by Marek, our project manager. Internal chores and issues faced by the entire organization, with some exceptions, were addressed by a dedicated team. This meant that most of our staff was rarely exposed to the organizational challenges. This worked well in the short run and boosted the number of billable hours, but it introduced numerous problems in the long run. Most importantly, the very narrow scope of education and training that we were offering to our teams limited the improvement of their skillsets and their mindsets.

Mutual responsibility and commitment

When the organization begins accumulating problems rather than effectively solving them, it becomes harder and harder to improve the situation. In our case, we noticed two main obstacles that were especially hampering our ability to tackle day-to-day challenges.

First, “management”, as we called the group responsible for internal matters, was a bottleneck. ³ The number and variety of issues, real or perceived, became too overwhelming for them to handle efficiently. No one had enough time, and everything was assumed to be a priority. Many of the existing problems were quite complex, and potential solutions were far from obvious.

Secondly, developers perceived the shortcomings of our organization as due mostly to failures of the management. At least, this is how it felt from the management’s perspective. This heightened the “us versus them” alienation, which led to additional stress, demotivation and a lack of collaboration.

We needed to somehow unite both groups and induce in them a mutual level of ownership over our organization’s challenges. The idea was to diminish or remove altogether the bottleneck so that we could concentrate all of our efforts on solving the rest of our problems.

Development of our organization

Unique value proposition and recruitment

Another issue that we were facing related to attracting talent. This is one of the biggest common challenges across our industry. Most agencies, including us, are quite indistinguishable from the rest. Even if an agency builds its brand on 2-3 “unique” features, there are probably at least a few others, who are claiming exactly the same distinction. There are numerous combinations of factors used to attract talent, such as salary range, perks, remote/non-remote work, technology stack, types of projects, brand strength, company culture, internal structure, quality of management and leadership, or the level of bureaucracy. These all contribute to making an organization unique. However, our combination was not especially unusual. We thought we needed a stronger unique value proposition (UVP) to attract our target group of potential employees.

A lack of a firm UVP led to an especially demotivating conclusion. If we don’t have anything “special” to offer, maybe there is no reason for us to exist. Our clients could simply be served by others. Our developers could find a different organization to join. The feeling of not being distinct and/or innovative strongly inspired us to self-reflect and pursue potential solutions.

Sales and negative cash flow

The software development market has been very favorable for suppliers for quite some time because of high demand. There have been more projects and customers to serve than there are available developers. Despite this strongly positive trend, we faced the opposite problem; we couldn’t find enough projects to keep our developers busy. An unpredictable sales pipeline and negative cash flow were definitely immediate concerns.

Diseconomies of motivation and human resources

The last of our critical issues related to human resources. As long as the team was relatively small, things seemed to go fine. However, when we got closer to 30 people and tried to leverage economies of scale, we ran into the problem of diseconomies of motivation. The amount of various HR-related problems grew exponentially. Many of them stemmed from a sense of dissatisfaction with certain aspects of our organization. For example, we lacked a clear career path and a transparent process for promotion. It became apparent that our company structure and internal processes required more attention.

Feedback workshop, October 2018, Lodz, Poland

The road to improvement

Ultimately, our issues in the short-term included negative cash flow and demotivation of the team. In the long run, we needed to overhaul how we developed our individuals and how they collaborated and took responsibility as well as make our sales pipeline more predictable and identify and craft our unique value proposition. It was quite a lot to tackle, especially when we acknowledged our past failures. Nevertheless, we stepped back to get a bird’s eye view of the situation and started drafting our plan.

In hindsight, our high-level improvement plan seems quite obvious. We needed to:

focus on training and engagement of our employees
create an environment supporting collaboration and mutual ownership within our organization
once we solved the two issues mentioned above, our entire team could address the rest of the challenges together ⁴

The actual steps that were necessary to accomplish this weren’t quite as clear. The devil was in the details. If it was easy, we wouldn’t have had such problems getting there in the first place. We needed to introduce numerous changes of varying complexity and weight. It wasn’t an overnight successful rollout, but rather a steady and relatively slow process of recovery. We tried different things simultaneously. It was quite chaotic and experimental at first. The idea was to test several theories, see what happens, and react with further improvements and adjustments as necessary. Below, I describe the most important changes in no particular order.

Admitting problems

One of the first steps we took, inspired by Alcoholics Anonymous, was admitting our problems. We gathered the entire company together and clearly stated that we needed help. This opened up a discussion about the various issues and the difficulties we were facing in solving them. It was important to emphasize that all ideas were welcomed, but they also needed to be followed by actionable next steps. It was a symbolic start that allowed us to raise awareness and inspire people to participate in the solutions.

Making communication channels more open

Opening our communication channels was a relatively easy change for us to make. Nonetheless, it brought about some surprisingly positive results. Even though we had a company-wide online tool for announcements and discussions, oftentimes, the exchange of opinions and debates were taking place on Slack. Because of some long-forgotten outdated decisions, many of our topic-specific channels were private. In the past, everyone who wanted to join could ask for access, and it was always granted. However, when all channels became open by default, it was much easier to follow different discussions and participate in them. Some people were surprised to learn how many different things were happening and how much effort each of them required.

Delegating authority and control

One of the biggest and most challenging shifts to make was empowering our staff in decision-making. Grzegorz, Mariusz and I own and lead the company. Historically, we were expected to have a decisive voice in the most important matters. Nevertheless, we weren’t interested in micromanaging and controlling every decision. It was far from a culture where subordinates must always include their supervisors in a carbon copy (cc) of every email. In spite of that, we might have inadvertently still been too controlling. Moreover, the way in which we shared our opinions and interacted with our team made it difficult for them to become more autonomous. This was an important contributor to our bottleneck at the management level.

First, Grzegorz, Mariusz and I needed to change our mindset. If we wanted to have numerous competent decision-makers within our organization, we had to let them actually make decisions. In many cases, it wasn’t that hard. We didn’t have strong controlling natures, at least in comparison to what we had observed among our peers. In the case of high-stakes decisions, especially those that impact our revenue stream, we’ve been gradually shifting responsibility to the team as they have become more self-sufficient and self-confident.

At the same time, we have been changing the way we communicate our opinions and feedback. Instead of being supervisors, we serve as advisors. The team was supposed to listen to our opinions if we gave ones, listen to others, and make their own decisions together while bearing the consequences. We emphasized that we could be wrong about something, and our advice was just a suggestion that didn’t have to be followed. In the end, it was less about how we expressed our opinions and more about how others were perceiving what we said. The message that they communicated among each other shifted from “they want me to do this” to “think about that while making a final decision.” Overtime, it became more and more natural for all of us, and the staff was willing to make more serious decisions with little or no involvement from management. It was probably one of the most impactful improvements. The process of change has been slow and chaotic at times, and it necessitated a few feedback cycles. This communication style and leadership approach continues to be something we hone.

Extending financial context

From the financial perspective, our team had always been well-informed. We employed an open budget that was accessible to anyone at the company, which included information about our revenue, expenses, profit, and rates. There was a separate spreadsheet for each month that provided an overview of our financial past. However, in the context of our cash flow problems, we needed something more. We created a tool that enabled us to forecast our financial situation and shared it with the entire company. This gave us a better overview of our runway and the balance of our accounts. Most of all, it helped the team to model different scenarios and develop their decisions and efforts with more of an awareness of the potential financial outcomes and consequences. This positively influenced their ownership over various decisions by helping them better understand what was at stake.

Engaging the team in bench management

When some developers don’t have a billable project, our industry typically refers to them as ‘sitting on the bench.’ In the ideal world, demand for developers from external projects should be immediately satisfied. No one should have nothing to do at any given time. In reality, the bench helps us to balance an unequal supply and demand flow. Oftentimes, when you need additional developers, you don’t have anyone available, and when the demand is stagnant, you have people waiting on the bench. Even within a small company like ours, bench management can be complicated. New projects tend to emerge simultaneously; the supply side seems to follow a similar pattern. When it rains, it pours. This gives rise to numerous possible scenarios often with multiple dependencies and limitations.

In the past, bench supervision was the sole responsibility of the “management.” We met once a week, with some rare exceptions, and analyzed all of the possibilities. If we decided that an employee might fit one of the projects, we discussed it with the candidate afterwards. This approach, apart from repetition, severely deprived developers of:

participating in the broader discussion
understanding the complexity of a particular decision
contributing their ideas and potential solutions

Unsurprisingly, as a consequence, this lack of involvement led to poor ownership and a diminished sense of responsibility for the projects in the long run.

The obvious solution was to ask people sitting on the bench to participate in our meetings, and we also invited anyone who simply wanted to join. The less obvious part was ceding control and responsibility over the decisions. Bench-sitting developers were expected to select a project for themselves or find some other task to do. The changes we made did not have an immediately apparent impact since their positive influence also hinged on other improvements (e.g. our financial forecast) and took months to develop fully.

Sharing knowledge has always been a part of our organization. Most of it was done quite informally through day-to-day discussions and feedback. Moreover, we had been organizing monthly online presentations. Most of them, however, revolved around sharing our technical expertise. In order to broaden our horizons and improve our non-technical skills, we diversified the content that was being presented. For example, there were speeches and panels on topics such as productivity, goal setting, professional networking, personal finances and retirement, purpose of life, investing, or digital privacy. We also introduced biannual workshops that allowed us to raise awareness about potential problems and challenges and discuss possible solutions. In general, the process is relatively slow, and the long-term gains are not yet measurable.

Simplifying company goals

In order to align our efforts and make everyone’s responsibilities more clear, we have been using OKRs. ⁵ However, in the past, our communication around our direction and priorities was not clear enough. For example, in Q1 of 2018 twelve people prepared OKRs, which resulted in 24 distinct objectives followed by 94 key results. It was evident that our company’s actual priorities were not clear to anyone.

During our Q2 planning meeting, we decided to fix this. From our discussion emerged two essential goals. The idea was to align most of what we do with these goals while allowing some room for bottom-up initiatives. Afterwards, everyone proposed their quarterly OKRs with objectives that strongly correlated to both priorities. We had finally defined a common goal.

We also changed how we communicated our progress. For example, during our weekly company-wide meetings, instead of just reporting what was done in different parts of our organization, we always related all efforts to our main goals. The difference is subtle, but there is no individual at the company now who doesn’t know what our priority is despite the fact that numerous activities are happening simultaneously. This clarity makes it much easier for individuals to decide for themselves what to focus on first and how to effectively contribute.

Introducing self-set salaries

In the past, we spent a lot of time on discussions and drafts of a fair and objective promotion and salary system. The idea was to have a clear set of requirements for each level. However, an approach such as this is always based on a set of simplifications. It’s impossible to come up with a solution that takes everything into account. The more subtleties we want to address, the more complex and harder the system becomes to use. Even if we prepared a comprehensive matrix of requirements, the assessment of who met which condition would still be subjective. It is also difficult to balance the importance of different criteria. Moreover, we were afraid of sending the wrong message. We were afraid that we might misplace our team’s focus. They should be contributing to our common goals by developing necessary skills. Instead, they might aim for just what was required.

Having all the downsides in mind, we decided to try something completely different. We delegated the responsibility of setting salaries to each individual at the company. I described the whole process in one of my previous articles. This solution forced the team to learn the art of self-evaluation. They became more aware of the difficulty of performance appraisal and took greater responsibility for their own consequences. On the company level, it not only simplified the process but also exposed all of us to a vast amount of feedback, which was delivered on a regular basis. Ultimately, delegating this responsibility strengthened the engagement of our employees and their feeling of ownership over the company’s success.

Making recruitment our mutual responsibility

For an agency like ours, recruitment is one of core competencies and, often, a priority due to the industry’s high demand for software developers. Previously, our recruitment process was mainly the responsibility of the management. Developers handled the technical part of the interview process, but they weren’t concerned much about the rest. Two changes were especially helpful in improving our procedures and engaging the team.

The first was related to the last stage of the process. Its purpose is to make sure that the candidate fits into our core values and company culture. Originally, we had only one interview at this stage with either myself, Mariusz or Grzegorz. Instead, we introduced 5 to 10 interviews (depending on the position) with different employees. Our developers had a chance to interview their potential coworkers with the expectation that they would focus on their non-technical skills. Moreover, when we know beforehand which team the candidate is going to be assigned, the team leader for this team is solely responsible for making the hiring decision. The process may look expensive and time-consuming, but alternatively so is making a bad hire.

The second important improvement was providing the team with a much better context about the outcomes of our recruitment efforts. In order to do so, we organized a workshop. The goal was to explain how recruitment affects our organization. Our discussions and presentations included:

how our recruitment pipeline works
past failures and their consequences for the team and our customers
the importance of an accurate assessment of candidates as well as likelihood
different criteria and requirements we should keep in mind during interviews

In a relatively short time, we experienced numerous positive results from both advancements. The engagement of the team increased significantly. They were not only more eager to act as interviewers but also improved the quality and scope of their appraisal. We also delivered more comprehensive feedback to our candidates and surprisingly sped up the entire process.

Feedback workshop, October 2018, Lodz, Poland

The main drivers of change

There were two main drivers of change behind most of our improvements:

expanding the context available to our team by being more transparent and developing new tools
empowering the team to become more self-sufficient and responsible by delegating control and authority

In my opinion, it would have been impossible to create a similar environment without a certain mindset among the top management. If Mariusz, Grzegorz or I had a hard time being more transparent or handing over control of different aspects of the company, we would still be trying to run the show and limiting the potential of the entire organization. The prerequisite of a bigger change was a shift in our own thinking and approach. I’m emphasizing this point not to show off our brilliance. On the contrary, our poor leadership significantly contributed to the substandard state of the company in the past. We had to grow first to allow our employees to grow.

In my previous article, I described the importance of transparency together with the biggest fears around it. I perceive transparency as key to better context building. Without transparency, it becomes difficult to expect high-quality decisions and increased responsibility among the team members. When it comes to delegating control and authority, I would like to quote Steven B. Sample, the author of The Contrarian’s Guide to Leadership:

This is one of the conundrums that prevent most people from becoming effective leaders: they believe (erroneously, as it turns out) that if they have the authority to decide a certain issue, and if in the end they must take personal responsibility for the decision (especially if it proves to be a mistake), then they themselves must personally make the decision. It’s simply inconceivable to the average person that he should under any circumstances allow a subordinate to make an erroneous decision for which he (the leader) will be held ultimately responsible. But that is in fact the very essence of major-league leadership.

Conclusion

It’s been around two years since the peak of our problems and our first attempts to address them. We introduced many small and large improvements that collectively compounded to create a significant shift in how our organization works. The way in which the team progressed as a whole stands out the most.

In relation to the numerous problems that I described at the beginning of this article, I am happy to report that we managed to move the needle on most of them. Because of a substantial change in how we set expectations and educated the team, we have a much better environment today that is more suitable for shaping versatile individuals. Moreover, openness, honesty and a willingness to receive help have contributed to engaging our team and spreading responsibility among its members. There are still dedicated people overlooking various parts of our organization, but they also are more willing to ask for help and receive unsolicited assistance from others.

When it comes to creating a unique value proposition for developers, we can still improve. We are somewhat differentiated from others now, but our offer is still not strong enough to attract our top target group. Candidates deliberately looking for an environment like ours are still rare. Most of the applicants have a hard time grasping our company’s culture. It’s not only difficult for us to explain but also quite contrarian to their previous experiences.

Similar to many other agencies, we are still in search of more predictable revenue streams. We managed to stabilize our positive cash flow and “buy” ourselves some time to identify a new strategic path for the future. One of the most interesting lessons, that we learned during this difficult period, related to the way in which our team reacted. Their attitude reflected a strong belief in themselves and their own abilities and a willingness to make the organization successful. I am very proud to work with this team and deeply admire their spirit and tenacity.

I am curious about your approach to context building and delegation of authority. How you and your company have experimented, and what solutions have you tried? What has been successful, and what have been the pitfalls? Feel free to share any questions and comments on Twitter or via email.

Notes

University of Texas at Austin 2014 Commencement Address - Admiral William H. McRaven ↩
More about t-shaped individuals can be found in T-shaped Professionals, T-shaped Skills, Hybrid Managers by David Ing. ↩
Agencies usually consists of two kinds of individuals. The first group, which in our case were mostly developers, are the employees who work with and for external customers directly earning money for the company. The second group of employees oversees internal matters, and these employees are sometimes solely perceived as an expense because of their indirect and harder to measure contributions to organization’s financial health. Some individuals may be a part of both groups to a various extent. ↩
You can find out more about the idea of “taking care of the people, the products, and the profits - in that order” in Chapter 5 of The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers by Ben Horowitz. ↩
If you wish to learn more about OKRs, I suggest the following resources: Startup Lab Workshop: How Google Sets Goals: OKRs by Rick Klau, Here’s Everything You Need to Know About OKRs by Lattice, and A Practical OKR Primer by Brett Knowles. ↩

Transparency - a powerful force feared by organizations

Mon, 29 Oct 2018 11:39:00 +0000

Photo by Cristian Palmer on Unsplash

A short story about the atomic bomb

In Richard Feynman’s book, Surely You’re Joking, Mr. Feynman, he shares a story from his time at the Los Alamos Laboratory. The lab was a part of the Manhattan Project during World War II, and the lab’s goal was to build an atomic bomb.

The bomb was going to be made at Los Alamos, but another team at a different plant in Oak Ridge was working on separating the uranium isotopes that were necessary. They used uranium 238 and uranium 235, which was explosive, and it was all very experimental. The plan was to purify uranium in several stages and determine how much uranium 235 remained. ¹ Despite receiving instructions from the lab at Los Alamos, the team at Oak Ridge couldn’t seem to get it quite right.

Because the plant was not making enough progress, one of the scientists from the lab visited the facility at Oak Ridge. Among the first things that he noticed was a tank with uranium nitrate solution being wheeled around the facility. This highly explosive material was being handled in a very cavalier manner. When the scientist pointed out the danger, the staff was shocked since they were completely unaware of the potential risk for explosion.

The army had a strict policy of keeping information as secret as possible, and they only provided it on a need-to-know basis. The employees at the plant were unaware of the potential risks involved in working with uranium. They were given a procedure to follow without any context about why they were doing what they were doing. They weren’t even aware of the possibility of an explosion being caused by a purified material.

When the team at Los Alamos realized that the material was being handled improperly, they quickly developed a safety protocol. The army didn’t want to reveal anything to the Oak Ridge staff and ordered the scientists to only share the safety procedures without revealing that the uranium was going to be used to build an atomic bomb. Physicists from Los Alamos understood that this wouldn’t be sufficient to convince the staff at Oak Ridge to strictly follow the rules. People typically will not follow rules if they don’t understand the purpose behind them. The staff at Oak Ridge needed to have the reasons behind the rules and a much broader context if they were going to stay safe.

Finally, the colonel responsible for the facility agreed to brief the staff on the necessary details. The result was a self-organization of the team. They wanted to understand how to make their own calculations and learn how to minimize the risk. This led to a complete redesign of the plant. They not only avoided a fatal explosion but optimized the entire process and also mastered the uranium purification process.

What an organization should be transparent about

Feynman’s story is an example of the importance of context and a deeper understanding of the problem at hand. The circumstances presented in the story were extreme: building nuclear bombs during wartime, protecting information from spies, and peoples’ lives being at risk. A broader perspective was necessary for the employees to appreciate the danger and to make better decisions. Having information about the bigger picture ultimately helped them to do their jobs better. They developed the bomb, and eventually the U.S. won the war. Decision-makers purposefully hid information from those beneath them until they realized how imperative it was for the staff to understand the context behind what they were being asked to do.

When we take a deeper look at this example, there are some practical clues that help elucidate when transparency can be most important. The performance and safety of the plant improved when its team and their commanders understood:

the deeper reason for their work (winning the war)
the goal they were supposed to reach (building an atomic bomb)
details about the problem at hand (purification of uranium and its associated risks)
the potential risks and consequences (potential explosion, possibility of losing the war)

In day-to-day life within our organizations, we face similar kinds of issues. People make decisions and do their work based on the knowledge, information, and assumptions that they possess at that moment. The results vary depending on the quality of their judgment and actions as well as the accuracy of the information that they possess. An organization’s purpose and values, goals, business model, know-how, mistakes, and troubles need to be fully understood by all of its members. Transparency of this nature is key to avoiding bad outcomes.

Common concerns

In everyday life, where we face relatively less dire circumstances, I often hear valid concerns whenever I speak about transparency. Sometimes, people are afraid of its possible consequences; other times, they perceive that transparency only holds marginal importance. Let’s examine the validity of these reactions in more detail.

Things are not always perfect

The most common concern that I hear about transparency is related to a fear of the consequences. Organizations are complex systems, and a change in one place may cause unexpected results elsewhere, which is referred to as The Butterfly Effect. The most heated discussions around transparency are typically related to finances. Here is a short list of questions that I usually hear:

What will our employees think about their colleagues’ salaries?
What will they think about the salaries of the management?
When they hear how much the client pays in relation to their own rate, won’t they feel bad?
What will they think about the organization’s expenses and priorities?

Such questions always bring to my mind something that I like to call “the management debt” (which is a reference to the concept of technical debt). Here are some examples of what I mean when I say “management debt.”

Employees have different salaries even though they possess similar skills and demonstrate similar levels of productivity and contribution.
A leader’s salary is out of sync with the market and the rest of the team.
The staff has a limited understanding of the organization’s business model and current financial condition.
The organization’s expenses are reckless, focused on building status, or simply higher than the company’s revenue source. (The definition of reckless spending, naturally, varies depending on the type of the organization and its situation.)

The list of reasons behind the existence of these circumstances within an organization would most likely be long and diverse. Before you decide to be more open about your current financial status, I advise organizations to address important issues ahead of time, such as the ones above listed. People want to be treated fairly, and if this is not the case, it may trigger unwelcomed psychological tendencies among your employees, like envy.

My people don’t want more information anyway

I often hear from my peers that their subordinates just want to stay in their comfort zones. A challenge which would usually fall under their typical set of responsibilities is all they wish for. This narrative emphasizes that more transparency at the organizational level doesn’t add much value to employees unless it provides them with answers/solutions related to their professional or role-specific challenges. For instance, some managers argue that software developers just want to code. They don’t care about organization’s sales pipeline or financial condition. It’s just nice-to-have information that doesn’t contribute to their day-to-day problem solving. Put bluntly, even if the information was available, they wouldn’t use it.

I’m sure there is no easy answer to this problem. Some people will fit into this description, and some will not. However, there are two questions related to this argument that you may want to ask yourself, which I find especially important:

How would you know for sure which information is crucial to share and which isn’t?
If you don’t encourage your staff to broaden their perspectives, what kind of results can you expect from them in the long run?

To better illustrate my point, let me use the example of a software developer, whom I will call John. Let’s say John is focused on developing his technical skills and eagerly solves sophisticated problems related to the organization’s server infrastructure. His manager, Andy, takes care of the IT budget and doesn’t see a need to communicate with the team details about the budget .

Over time, John becomes an experienced developer. It’s easier for him to solve complex technical problems. Simultaneously, the server infrastructure becomes too small for the needs of the growing organization, and it’s time for an overhaul of its architecture. John is the perfect guy to design the new server infrastructure because he has enough experience with the current one and the skills necessary to make an informed decision on a purchase that could potentially have long-lasting consequences. Because John was never informed about the budget, he plans a new solution based mostly on performance and future scalability.

Later on, John’s plan is confronted with Andy’s budget. If their expectations align well, everyone is happy. The reality is often less satisfactory since the desired solution and the reality of the budget constraints often differ by a mile. If John had possessed a better understanding of the organization’s (or his smaller unit’s) financial conditions, he could have made a much more acceptable plan initially rather than wasting his time developing a plan that the organization could never afford. Cost is only one factor out of many that needs to be considered when planning like this needs to occur. The more perspectives that John has in his toolbox, the better the quality of his actions and decisions will be.

John is typically just one person out of many within a team or an organization that are being asked to make decisions or to carry out tasks where varied perspectives would be helpful. Your staff’s decision-making abilities undoubtedly contribute to your organization’s long-term well-being. If you don’t teach your people to look at problems broadly, you will sooner or later surround yourself with mediocre talent, and you will become their bottleneck.

Transparency doesn’t work on a larger scale

Another common misconception about transparency is its lack of scalability or at least a strong prejudice that it doesn’t work on a larger scale. This usually boils down to an argument about how bigger organizations are much more complex, their structure is more hierarchical, and it’s easier to align people by telling them only what they need to know and nothing more. Otherwise, chaos would emerge breaking down the structure making everyone less productive.

I’m sure there might be numerous reasons why bigger organizations might make it difficult to quickly see the benefits from a more transparent approach. Oftentimes, it would probably require numerous changes at several different levels of a large organization. As a result, these changes could bring about unpredictable negative outcomes. Whenever I face this kind of uncertainty, I turn to first-principles thinking as I try to better understand the status quo and its mechanics. Here is an explanation of a first-principles thinking approach, offered by Elon Musk:

I think people’s thinking process is too bound by convention or analogy to prior experiences. It’s rare that people try to think of something on a first principles basis. They’ll say, “We’ll do that because it’s always been done that way.” Or they’ll not do it because “Well, nobody’s ever done that, so it must not be good. But that’s just a ridiculous way to think. You have to build up the reasoning from the ground up—“from the first principles” is the phrase that’s used in physics. You look at the fundamentals and construct your reasoning from that, and then you see if you have a conclusion that works or doesn’t work, and it may or may not be different from what people have done in the past. ²

Frankly speaking, I haven’t practiced transparency at a large scale myself, so I cannot personally say that it works beyond a shadow of a doubt. However, there are organizations that have done it. In Frederic Laloux’s book, Reinventing Organizations, he researched 12 organizations of different sizes and industries. All of the companies that he examined relies on self-management. There were no managers, and the employees ran the companies on their own. They were supported by an advisory body that did not have any ultimate control over their decisions. This approach requires lots of transparency. Otherwise, the staff wouldn’t be able to operate effectively and would not be productive. The biggest of the companies that Laloux examined were AES, BSO/Origin, and Buurtzorg, which employ 40,000, 10,000, and 7,000 people, respectively.

My subordinates wouldn’t understand

We build organizations based on thousands of small decisions, tradeoffs, limits of our resources and capabilities. For an outsider, the result might seem like a mess. The decisions and sacrifices are an integral part of an organization’s structure, processes, and culture. Nonetheless, it’s often hard for someone on the outside to grasp the reasoning behind the design. Moreover, organizations include people. It’s not surprising that apart from all of the good aspects that they bring to the table, people are also a part of a company’s shortcomings by the incompetence, hidden agendas, politics, or fraud that they potentially introduce. To make it even more complicated, organizations are constantly evolving.

From my experience, the complex nature of organizations is largely what makes leaders and managers struggle with being more open. They fear that if the employees, partners or customers really knew how the business worked, they wouldn’t collaborate with them or buy their products and services anymore. They prefer to protect their subordinates and customers by hiding the unpleasant realities. Steven B. Sample, in his book The Contrarian’s Guide to Leadership, made an excellent point about the world and its people:

Niccolo Machiavelli was above all a student of human nature. His repeated advice to leaders was to believe in the reality of human nature, as opposed to what they wished it were.

I am reminded here of a book on child rearing by Dr. Hiam Ginott which my wife and I read many years ago. Dr. Ginott advised parents to teach their children the supreme importance of discerning and accepting reality, in order either to make peace with it or to attempt to change it. In other words, don’t let children delude themselves about how the world and its people really work. That’s exactly what Machiavelli was trying to do for adults. We must accept the fact that human beings and their institutions hardly ever measure up to our noblest ideals, and that to pretend otherwise is to invite ruin.

Protecting different stakeholders from seeing the true nature of an organization is likely to yield poor results in the long run. I would also say that they probably already know, to a varying degree, what happens behind the curtain. Moreover, being more open about various shortcomings allows people to better grasp their environment. Once fully aware of it, they become a part of these setbacks and are more likely to understand and more willing to accept certain decisions rather than undermining them and/or holding a grudge.

I would lose my edge

Over the years, I’ve heard numerous stories of what developers like to call “security through obscurity.” A common example occurs when a manager is hiring new people. Let’s look at an example where a new hire’s responsibilities and skills should be similar to the existing talent pool. After some interviews, the perfect candidate emerges. The candidate’s presented expertise doesn’t diverge significantly from the rest of the team. Unfortunately, the new hire’s financial expectations are a little bit above what the other team members make, and the individual isn’t willing to negotiate. If the corporation really needs this person, and the organization keeps all employee salaries secret, it’s extremely tempting to use that leverage to hire this candidate. A short-term gain can be achieved, and the manager hopes to deal with the small unfairness in the long run. Asymmetry of knowledge allows managers to have fewer restrictions and to make decisions faster.

However, let’s examine this problem from a different angle. Manager’s achievements and deliverable value hinges on their team’s abilities. The employees are the ones doing the heavy lifting. The more each of them adds value, the bigger their total contribution to the company’s success will be.³ It’s in a manager’s best interest to influence the team in a positive way by fostering more creativity and productiveness. I would argue that one of the most effective ways to do so is by giving employees more context (information). Transparency leads to higher-quality actions and decisions, as we have seen in the previous scenarios.

Having an edge over your subordinates, based on an information gap, becomes a double-edged sword. On the one hand, it does allow the manager to use shortcuts, to go faster, and to hide certain inconvenient truths. On the other, the staff’s shortcomings and underdeveloped skillsets have a direct influence on the team’s ability to succeed, which reflects on the manager. To make it worse, some team members might feel cheated or frustrated when they don’t see and/or comprehend the bigger picture.

Conclusion

Transparency is not usually on the top of the list of an organization’s priorities. In the story at the beginning of this article, the uranium enrichment process was slowing down the development of the atomic bomb. The goal was well-defined, and transparency did not seem like an obvious solution. However, it was a powerful force that changed the outcomes dramatically. Transparency, often has indirect effects in unpredictable situations. Using transparency to solve a specific problem is probably less likely to be successful, and in my opinion, it misses the point.

Many organizations can be quite skeptical about transparency’s potential to offer positive contributions to productivity and effectiveness. I would argue that the question we should be asking ourselves is not “what are the costs and risks that transparency brings.” Instead, we should ask ourselves “what are the costs of not being more transparent.” Moreover, transparency is not a silver bullet and requires careful consideration regarding how it might affect a particular environment. In the next few articles, I will present more practical examples of the application and the positive influence that transparency can have on teams. I’m curious to hear your thoughts on the topic. To what extent is your organization transparent? What has been successful, and what have the pitfalls been? Feel free to share any questions and comments on Twitter.

Notes

More about enriched uranium can be found on Wikipedia. ↩
Elon Musk, quoted by Tim Urban, in “The Cook and the Chef: Musk’s Secret Sauce,” Wait But Why ↩
More about the output of a manager can be found in High Output Management by Andrew S. Grove (Chapter 3 - Managerial Leverage). ↩

10 lessons for software developers before they start applying for a job

Sat, 04 Aug 2018 21:39:00 +0000

Photo by Jon Tyson on Unsplash

Introduction

Finding the right environment that best supports one’s professional goals can be a daunting task, especially in the current labor market since it offers an abundance of opportunities. Based on many years of experience conducting hundreds of interviews at Ragnarson, I would like to share a few observations of our team to assist job applicants.

All opinions in this article are derived from direct interviews with potential candidates. Admittedly, they are mostly based on Polish software developers in their 20s and 30s. We haven’t done any research to confirm these findings, and the information is just based on empirical evidence from my day-to-day interviews and work environment.

Market characteristics

As of August 2018, software developers in Poland are still in high demand. The supply of talent remains too low. Companies in the market mostly try to appeal to developers by offering even higher salaries and numerous perks.

Software houses are the most common employers. They acquire software projects from their customers and hire developers to do the job. There is a smaller number of product companies, which build their own software. Some of them are founded by local entrepreneurs; the rest of the companies are mostly Western-based and rely on Polish developers to a various extent.

In short, developers have plenty of options in the job market and also hold some leverage over companies that are in need of talent. Employers are quick to identify potential job applicants in order to attract them. In our opinion, in many cases, such dynamics exacerbate the essence of the problem, which will be described in more detail below. This is also, most likely, not the only issue. However, this article aims to provide some perspective regarding what can be improved in relation to developers rather than offering a comprehensive study of the industry’s misdeeds.

Recruitment process

Interviews with candidates are the most important tool in our recruitment process. They allow both sides to get to know each other to make certain there is a fit. In order to ensure long-term satisfaction, such an evaluation is crucial. More information about our recruitment process can be found in this video (Polish language only).

Before we delve into our insights based on interviews, one important caveat must be mentioned. What we like or don’t prefer in our candidates is not necessarily true for other employers. Every company has its own unique situation and accepts candidates based on its own specific requirements. Our suggestions might be useless for some developers. Nevertheless, these lessons can be generally helpful regardless of any specific context.

What the applicants do well

Asking questions

The most rewarding interviews for our team are the ones where the applicants come prepared with questions. An interview should not be an asymmetric process for an employer to only learn about the candidate. It should be an exploratory process for both parties. A promising developer will prepare a comprehensive list of questions to learn about the work the company does and its environment. The best questions ask us to elaborate on our workflows, self-management practices, and culture.

Understanding business models

An understanding of our business model is another indicator of a mature developer. It’s not merely knowledge related to how the company makes money but also how it adds value. The division of work and cost of bureaucracy are important elements of a business model, as well. The most valuable insights we have received usually came from freelancers and startup/agency founders, who had worked for themselves before and had learned from their own setbacks.

Handling a reasonable number of simultaneous applications

The best recruiters have an excellent process in place. The ones who rely on their gut instinct are less successful on average than those who rely on data. This means that every decent recruitment process is going to be time-consuming. A reasonable developer plans ahead regarding how many companies he/she is able to check simultaneously and how much time the process will take. The savviest candidates carefully plan to review 8 companies over the span of 4 weeks with only 2 companies under evaluation at any one time.

Offering something in return

The abundance of opportunities in the market has narrowed candidates’ thinking about their potential contribution to their future working environment. A what-can-I-get attitude has become dominant, which leaves almost no room for a consideration about what one might be able to contribute. Programming skills are still essential, but they usually are not a good differentiator of one’s potential since so many others code well, too. In our company, it’s not a factor that makes you stand out although we acknowledge that this may make us unusual. Developers with a good understanding of their strengths in relation to the company’s needs and shortcomings are immeasurably valuable. An example of these types of unique qualities might be product design skills or experience as an interviewer.

What the applicants can improve

Setting goals

Most of our applicants are looking for professional growth, and it has been mentioned in almost every interview we have conducted. In many cases, however, the applicants struggle with explaining what that might specifically mean to them. Even if there is some understanding of the scope, the applicants haven’t defined a clear timeline. The biggest confusion arises when we ask about their daily habits that might support their goals. More often than not, there are none.

Understanding the industry

Many candidates apply to three different types of companies at once. When asked why they have done this, the look on their faces reflects wonder and astonishment. Startups, software development agencies, small companies with a flat structure or bigger companies with a hierarchical structure all offer very different working conditions, goals, mindsets, and cultures. When an applicant doesn’t have a preference and applies everywhere, it’s usually the result of poor career-planning and a lack of understanding about the market rather than an open-minded attitude.

Doing homework

The recruitment process is the earliest opportunity for both parties to make a first impression. There is hardly anything more discouraging than an applicant who is unprepared. Employers are often at fault of being unprepared as well, but in their defense, their volume is much higher. When an applicant doesn’t spend time researching a potential employer and doesn’t complete the recruitment tasks in a timely manner, it is very telling. It communicates the following messages: I’m not that interested. I don’t care that much about where I will spend the next years of my life. I have plenty of offers on the table, and you are the one who will need to make an effort. I don’t know what I’m doing. Applicants should evaluate the messages that they intentionally convey as well as the ones that they inadvertently share.

Evaluating oneself

Regrettably, we are rarely required to self-reflect. Candidates who have limited experience identifying their strengths, weaknesses and past efforts are easy-to-spot. Sometimes, it takes the form of an inadequate picture of one’s skills and competencies. Other times, there is nothing compelling about their past performance. Put bluntly, mediocre results follow mediocre efforts. Their awareness of strengths, especially those that can be brought to the table apart from coding, is astoundingly low. Perhaps, additional skills are seldom expected on the market.

Learning negotiation

The art of negotiation is an important life skill. Many candidates, ironically, who are looking for a win-win deal, start off the negotiation process on the wrong foot. Specifically, they often propose a much higher salary than the one they are truly willing to accept. Some applicants even suggest a higher salary than the salary range that was included in the job description. Our process is a ruthless evaluator of inflated proposals, but it’s not just about who is right. It’s about identifying mature partners by taking into account an understanding of added value and current market conditions. Most likely, many employers can be accused of falling short when it comes to negotiations as well. When this does happen, it should be an important caveat for the applicant.

Respecting current employers

At the end of our recruitment process, we ask our candidates for references. We are not looking to read an enticing letter from their previous employers or customers, but we would much rather have an honest conversation with a current supervisor. Oftentimes, the embarrassment of the developer is hard to miss. This kind of reference requires them to reveal their plans to leave once they are already on the run. The best developers who have left Ragnarson let us know far ahead of finalizing any deals and gave us sufficient time to prepare, which may be more time than any notice period agreed upon in their contract. If an applicant had a hard time being transparent with their current employer, why would the applicant act differently in the future?

The essence of the problem

If I were to summarize all of the described issues into one bold statement, I would say that people don’t know what they want and how to get there. The lion’s share of the fault may not even lie in their hands. It is difficult to analyze all aspects related to such a complex problem, and I won’t dream of even trying. What I do know is that the developers who apply to our company are talented people who occasionally appreciate some guidance, honest feedback, more transparency in the industry, and a reminder of the importance of their non-technical skills.

On the other hand, the industry is pressured by market forces to lower its expectations to meet demand. It has never been easier to land a job as a software developer quickly. In the long run, however, the employees who let circumstances control their futures may end up in an ocean of mediocrity. Only deliberate effort that is focused on developing a broad skill set and discovering one’s goals and values will allow applicants to identify the right path and ensure that they stand out in the crowd.

Conclusion

Understanding one’s values and goals is crucial in finding the optimal, supportive environment. The exuberance of the market with its favorable circumstances for applicants is a double-edged sword. The applicants who forget the rules of competition might be left behind in the long run. Mentorship, honest feedback, and self-evaluation are still important factors in true professional growth.

If you happen to be a software developer, I suggest that you take a look at our job board. All candidates receive honest yet encouraging feedback no matter the results of the process. If you just need some guidance, feel free to share any questions and/or comments on Twitter or via email.

Originally published at blog.ragnarson.com on August 1, 2018.

The future of online search engines. Part 1 – The status quo and its shortcomings.

Thu, 28 Jun 2018 12:54:00 +0000

Photo by Dino Reichmuth on Unsplash

Introduction

Search engines, Google in particular, have had a tremendous impact on our society. Every year, people search online or “google” at least 1 trillion times. In a matter of seconds, people can access a plethora of content. The Internet and the way that information can be found there are a powerful force that has disrupted many different industries.

In a series of articles, I will summarize and explain the online search engine industry. In this article, I will focus on the basic facts about the industry and its biggest challenges. In later articles, I will review the newer entrants to the industry and discuss what they can offer in order to explain where the industry may go in the future.

How the industry looks today

Market structure

The online search engine industry is currently dominated by Google, the market leader in almost every country with the important exception of China where Baidu leads instead. Besides Google, Bing and Yahoo! also offer search engines, however, they possess a much less impressive share of the market. The current market split is the following:

Google - 86.28%
Bing - 6.45%
Yahoo! - 3.41%
Baidu - 0.93% ¹

Google, Bing, and Yahoo! are all US-based companies with a similar business model. The most important difference between Baidu and the rest of the industry is their level of censorship. Baidu, a Chinese company, is strictly regulated by the Chinese government, which is not known for allowing freedom of speech. ²

In the rest of this article, I will focus mainly on Google due to its dominant position and the fact that the other US-based companies are not highly differentiated. Baidu is not discussed in this article because, in many aspects, Google’s weaknesses are Baidu’s strengths, which will be explained in more detail later on. Baidu’s market share around the world is also negligible in comparison to Google’s.

Business model

Google’s business model is based on advertising. In 2017, its ad revenue amounted to 95.38 billion dollars compared to Google’s total revenue, which amounted to 110.9 billion US dollars. Google Search is not the only location where Google displays ads. Many free services available on Google, such as YouTube, are also monetized in a similar manner by generating revenue from ads. ³

Bing, owned by Microsoft, generates a much smaller revenue percentage from its paid search advertising than Google AdWords does for Google. In 2017, Bing’s ad revenue amounted to 1.8 billion compared to the company’s total revenue of 89.95 billion US dollars. Microsoft also makes money from advertising on its service, LinkedIn, which generated 1.3 billion US dollars in the same year. ⁴ Similar to Google, Microsoft offers various products and services that also generate revenue from advertising.

Yahoo!’s reliance on advertising is also smaller than Google’s but much bigger than Microsoft’s. In 2015, its ad revenue amounted to 3.32 billion compared to its total revenue of 5.2 billion US dollars. ⁵ Similar to Google and Microsoft, Yahoo! provides a plethora of free services that rely on advertising as their main source of revenue.

In all cases, their search engines are only one of the building blocks for a larger business model. Each company experiments with different products and revenue models. Even though advertising is the main revenue source for Google and Yahoo!, both companies are exploring different profit streams. For example, Google hopes to generate other sources of income through its parent company, Alphabet.

Challenges

Google Search provides an easy-to-use and convenient service for its users that is completely free-of-charge. Over the years, this service has evolved significantly. Google Search delivers relevant results even when people are not sure exactly what they are looking for or how to precisely formulate their questions. Together with its email service, Gmail, and its mobile operating system, Android, Google can serve as a personal assistant in our pockets. Google tries to predict what we might need and at what time to present relevant information even before we search for it.

However, Google’s services are not free of shortcomings. There are, at least, a few concerns, which are mostly related to the political and economic power that Google possess. I will try to briefly explain each of these concerns below. The list is definitely not comprehensive. Also, the following discussion focuses on the broader implications for our society rather than on the technical or functional challenges.

Censorship and discrimination

The Internet and its protocols were designed to work on top of various physical networks that belong to or are maintained by many different parties. Its architecture enables it to be a relatively open medium, where anyone can join and share their opinions. However, the architecture itself is not the only important building block of the community’s openness. The concept of net neutrality is the second ingredient that ensures an open community. Wikipedia defines it as follows:

Net neutrality is the principle that Internet service providers treat all data on the Internet equally, and not discriminate or charge differently by user, content, website, platform, application, type of attached equipment, or method of communication. For instance, under these principles, internet service providers are unable to intentionally block, slow down or charge money for specific websites and online content. This is sometimes enforced through government mandate. These regulations can be referred to as “common carrier” regulations. This does not block all abilities that Internet service providers have to impact their customer’s services. Opt-in/opt-out services exist on the end user side, and filtering can be done on a local basis, as in the filtration of sensitive material for minors. Net neutrality regulations exist only to protect against misuse.

Here is a great example from the physical world that explains the importance of net neutrality:

As a simple example, if a man operates the only ferry over to town, that simple boatman is in a position of great power over other sectors of the economy, even the sovereign authorities. If, for example, he decided to charge one butcher more than another to carry his goods, this operator could bankrupt the one who didn’t enjoy his favor. The boatman is thus deemed to bear responsibilities beyond those of most ordinary businesses. ⁶

In other words, whoever runs the infrastructure should be equally open to all users of its service. Otherwise, the business would possess to much power over everyone relying on it.

As of June 2018, the US government, the Federal Communications Commission to be precise, decided to repeal the existing net neutrality rules. The FCC’s Chairman, Ajit Pai, explained:

The United States is simply making a shift from pre-emptive regulation, which foolishly presumes that every last wireless company is an anti-competitive monopolist, to targeted enforcement based on actual market failure or anti-competitive conduct. ⁷

An anti-competitive monopolist is precisely what AT&T has been acting as for many years. They’ve mastered a practice of delaying the enforcement of laws in court, which has enabled them to gain a competitive advantage. Tim Wu’s book, The Master Switch, provides plenty of examples of the information industry’s dirty practices. The industry, on the other hand, claims that they will maintain the openness of market practices even without oversight.

Several internet providers made public pledges that they would not block or throttle sites once the rules were repealed. The companies argued that Title II gave the F.C.C. too much control over their business, and that the regulations made it hard to expand their networks.

Yet, Wu argued:

The effects at first would be small. But it doesn’t make a genius to realize that if AT&T and the cable companies exercised broad discretion to speed up the business of some firms and slowdown that of others, they would gain the power of life and death over the Internet.

Simultaneously, AT&T is merging with Time Warner. Whose content do you think will be given preferential treatment on their network? Andrew Hwang from Roosevelt’s Institute explained some potential negative consequences of the merger.

These same concerns apply to other companies like Google and Facebook. Both of these companies, collectively, are a major source of incoming traffic for the rest of the web. ⁸ Unfortunately, they are not known for always maintaining neutrality. For instance, Google was accused of giving unfair priority to its own services when customers performed local searches. ⁹ Even if they were unprejudiced, we shouldn’t be expected to rely on their self-enforced neutrality. Civilization hasn’t been built upon the blind acceptance of others’ benevolence. We have developed rules and regulations to protect the greater good rather than the interests of a few; we have acknowledged that people often will act in their own self-interest if left unchecked. It’s yet to be seen if Google, Facebook, and others will be subject to more regulation. ¹⁰ For now, they allege that they are “doing the right thing,” which we hope doesn’t hide more selfish motives or an abuse of their position.

Privacy

Search engines and Google Search, in particular, are great at providing you with information that exactly matches what you are looking for. There is an important element of their platform that makes this possible - tracking. The more the company can learn about your interests, relationships, job, habits, location, etc., the more accurate the results of your search will be. The company’s goal is to predict what you might need and deliver it precisely when you might need it. ¹¹ Convenient? Absolutely! However, let’s first examine the tradeoffs that we, knowingly or unknowingly, accept in exchange for this convenience.

Many democracies around the world rely on a concept of “separation of powers”. Typically, democratic governments are divided into three branches: a legislature, an executive, and a judiciary. This model ensures a system of checks and balances to avoid autocracy. By this principle, the same balance should be maintained between the government and people. Privacy is one of the fundamental building blocks of the people’s defense against government interference or overreach. ¹²

There is a common misconception about privacy. People believe that they don’t need it because they have nothing to hide. Edward Snowden countered this argument beautifully with the following statement:

Some might say “I don’t care if they violate my privacy; I’ve got nothing to hide.” Help them understand that they are misunderstanding the fundamental nature of human rights. Nobody needs to justify why they “need” a right: the burden of justification falls on the one seeking to infringe upon the right. But even if they did, you can’t give away the rights of others because they’re not useful to you. More simply, the majority cannot vote away the natural rights of the minority.

But even if they could, help them think for a moment about what they’re saying. Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say. ¹³

Now, what does this have to do with Google? Revealing your personal data to a company makes you much more vulnerable to their control and influence. Moreover, these companies and the information that they possess are within reach of the government. ¹⁴ The companies and the government could use your personal information to influence your behaviors to their own advantage. Convenience comes at a cost, and it’s important to understand the potential consequences that might arise.

Transparency

Transparency has been agreed upon as an important factor that ultimately improves our society. It’s been touted as an important principle and practiced in varying degrees within many different environments, including businesses and governments. Since Google Search plays such an important role in our society, some people believe they should be more transparent about how they rank all results. The answer to that question lies in their algorithms and how they work. Therefore, there has been a greater call for transparency about those very algorithms. ¹⁵ Google maintains great secrecy about its algorithms. They offer these two concerns as their primary reasons for not being more transparent:

It’s their proprietary recipe to maintain their competitive lead within the market
It helps them to protect the system from being gamed by outside sources ¹⁶

The first point is certainly valid for Google. For the rest of us, it’s less important who the market leader is. It’s hard to measure the significance and impact of the company’s lead within the market. What should matter to us as consumers are the benefits that the company can offer for the society as a whole.

The argument from the second point could be compared to what has been happening in the open-source movement. Some people believed that open-source software would be more vulnerable to attacks since it was by definition more “open.” In fact, studies have shown that open-source software is not susceptible to higher security risks. ¹⁷ Admittedly, Google is a complex system, which shouldn’t be analyzed only from a technical perspective. Too narrow an analysis may lead to terrible second- and third-order consequences. Carole Cadwalladr, in her article “Google, democracy and the truth about internet search”, shed some light on how broad and negative the implications might be of a closed system with a lot of power. Fake news, racism, and manipulation of the electorate all made the list.

There is plenty of reverse engineering, analysis, speculation and even some tidbits of information released by Google itself that allow us to begin to understand how Google Search might work. With Google becoming an “AI-first” company, it will only become harder to grasp rather than easier. Even their own engineers occasionally find it difficult to assess why certain search results rank higher than others. ¹⁸ The quality of the content, which is often touted as the most important metric, is not a silver bullet. Otherwise, the entire SEO industry would be out of business. If we, as a society, don’t know the rules on which we have to rely, how do we know they are good for us?

Whether or not we need more transparency and to what degree we need it are debatable topics. Within that debate, Google’s opinion, although certainly valuable as the leader of the industry, shouldn’t be the dominant voice. They are too biased because of their market position and the potential profits that they could lose. It also means that an alternative approach is more likely to come from an outsider. It would be easier for an outsider to challenge the status quo since they are not in a position to lose so much.

Advertising

Google’s founders, Larry Page and Sergey Brin, have been aware of the bias that advertising introduces to search engines since Google’s early days. In their paper, “The Anatomy of a Large-Scale Hypertextual Web Search Engine”, they wrote:

Currently, the predominant business model for commercial search engines is advertising. The goals of the advertising business model do not always correspond to providing quality search to users. For example, in our prototype search engine one of the top results for cellular phone is “The Effect of Cellular Phone Use Upon Driver Attention”, a study which explains in great detail the distractions and risk associated with conversing on a cell phone while driving. This search result came up first because of its high importance as judged by the PageRank algorithm, an approximation of citation importance on the web [Page, 98]. It is clear that a search engine which was taking money for showing cellular phone ads would have difficulty justifying the page that our system returned to its paying advertisers. For this type of reason and historical experience with other media [Bagdikian 83], we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers.

In short, what advertisers want is not necessarily aligned with the best interests of the users. If a search engine monetizes advertising, it is then incentivized to act in the best interest of the advertisers and not the consumers. In such case, the search results are not the product, the consumers are. For years, Google has been able to balance both forces, the advertisers and the consumers, successfully. All the while, they have been extending their level of influence and collecting a handsome paycheck.

In the meantime, online advertising could be becoming a less and less effective means of improving sales, ¹⁹ Google and Facebook both leverage their massive data to improve targeting, ²⁰ ad blockers are on the raise, and publishers still struggle to monetize their content. There is room for innovative business models to emerge. Kevin Werbach, a Wharton legal studies and business ethics professor, made a great point:

It’s not written in stone that advertising has to be the dominant monetization model for online and mobile services. ²¹

Conclusion

Google’s free services and convenience come at a cost. The long-term consequences and tradeoffs are still difficult to accurately measure and properly assess. The list of challenges presented here is definitely not exhaustive. My goal here was to identify the most important problems and lay the groundwork for further analysis.

In the next article, I will discuss the landscape of new entrants to the industry and how they might address the issues presented here. In the meantime, feel free to share any questions, suggestions, or comments below. Follow me on Twitter.

Notes

https://www.statista.com/statistics/216573/worldwide-market-share-of-search-engines/. ↩
H. Jones, “The B2B Marketer’s Guide to Baidu SEO”, January 2014, Search Engine Land. ↩
https://www.statista.com/statistics/266249/advertising-revenue-of-google/. ↩
B. K. Javed, “Microsoft: Bing ad revenue grew 15%”, February 2018, Campaign and https://www.statista.com/statistics/267805/microsofts-global-revenue-since-2002/. ↩
https://www.statista.com/statistics/623999/projected-ad-revenue-yahoo/ and https://www.statista.com/statistics/266253/yahoos-annual-gaap-revenue/. ↩
Many examples of the importance of the concept of net neutrality can be found in The Master Switch: The Rise and Fall of Information Empires by Tim Wu. ↩
K. Collins, “Net Neutrality Has Officially Been Repealed. Here’s How That Could Affect You.”, June 2018, The New York Times. ↩
Here is an example of online news and media outlets by Mathew Ingram. ↩
V. Savov, “Tim Wu accuses Google of degrading search results to favor its own products”, June 2015, The Verge and https://en.wikipedia.org/wiki/Censorship_by_Google. ↩
An opinion by Steve Bannon, who is for regulation, and one by Donald Graham, who is against. ↩
H. Soulier, “The Future of Search: Search IS The Future”, March 2014, The Moz Blog. ↩
More about state control and people’s defense against it can be found in Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed by James C. Scott. ↩
E. Snowden, “Just days left to kill mass surveillance under Section 215 of the Patriot Act. We are Edward Snowden and the ACLU’s Jameel Jaffer. AUA.”, May 2015, Reddit. ↩
B. Gellman, “NSA infiltrates links to Yahoo, Google data centers worldwide, Snowden documents say”, October 2013, The Washington Post. ↩
J. Naughton, “Good luck in making Google reveal its algorithm”, November 2016, The Guardian. ↩
J. DeMers, “How Much Do We Really Know About Google’s Ranking Algorithm?” , February 2018, Forbes. ↩
R. Clarke, “Is Open Source Software More Secure?”, University of Washington. ↩
C. Metz, “AI is transforming Google Search. The Rest of the web is next”, February 2016, Wired. ↩
D. Thompson, “A Dangerous Question: Does Internet Advertising Work at All?”, June 2014, The Atlantic. ↩
L. Matsakis, “Online ad targeting does work—as long as it’s not creepy”, May 2018, Wired. ↩
“The End of Digital Advertising as We Know It”, November 2016, Wharton School at the University of Pennsylvania. ↩

How to define your organization’s core values

Fri, 25 May 2018 07:18:00 +0000

Company culture matters

Every organization has a culture whether it is clearly defined or not. It’s the set of values and behaviors that your employees perceive as important or expected. In other words, it’s a way of doing things. ¹

CEOs and founders of organizations usually have a vision regarding the desired behaviors that they hope for their employees to have. These are typically derived from the founders’ own values and behaviors. As long as the company is relatively small, it’s not immensely challenging to create an environment that embraces this shared vision. Nevertheless, at a certain threshold, things begin to change.

At Ragnarson, we experienced this shift when we reached around 26 employees, out of which one fourth of the people had been working with us for less than 6 months. The more people we added, the harder it was to ensure that “the right” behaviors were occurring. In our case, it was especially noticeable among the newcomers. They simply didn’t have enough guidance about what was expected of them.

The problems we encountered from a broader perspective were:

Ensuring that “the old” team was consistent in their behaviors and understood our priorities
Making hiring decisions about which applicants were a good fit for our company
Onboarding newcomers
Making decisions about who should be promoted and who should be fired
Identifying which customers were a good fit for us

In order to preserve our culture and ensure that our efforts were aligned, we decided to be more explicit about the behaviors that we valued. ² The perfect tool to clearly identify and convey these behaviors were well-defined core values.

The road to core values

I learned about core values from an excellent book, Delivering Happiness, written by the founder of Zappos, Tony Hsieh. This book helped us not only to understand the importance of shared values but also provided guidance on introducing this concept to our team. At the beginning, we weren’t sure what the exact steps were that we needed to take. It became clearer as we dived deeper into the topic. The whole process from conception to the final document consisted of the following steps.

What do we actually believe in?

In order to state something explicitly, you first need to identify what it is that you are trying to say. The first list of our values was created by just a small group including me and few members of our management team. Everyone made suggestions based on what they thought was important. We came up with a long, chaotic list of items, such as:

We are passionate about what we do;
We are transparent inside the company;
Everyone can influence their own personal growth as well as the company’s growth;
We give back to the community;
We are goal-oriented.

The next step was to categorize these proposals into a few core values and to clarify each one with a short description. Since we liked how Zappos accomplished this step, we mimicked their process. After a few months, we had a first draft that was ready to be reviewed by the entire company for feedback.

We were a little bit concerned about the commitment of our developers to this feedback process. They typically prefer to code rather than talk about values. Nevertheless, everyone was asked to spend at least 30-60 minutes reviewing the document to provide comments and suggestions. People had two weeks to review it, and we also encouraged them to examine their own values by providing them instructions on the mountains and valleys exercise. We collected a lot of feedback that, taken together with the draft, served as excellent raw material for our final version.

Good writing is difficult

Describing the values of an organization is a daunting, challenging task. While writing our values, we realized that there was confusion in regard to several terms, like policies and goals. We learned a lot about ourselves and our company during the process. As a result, it was challenging to explain all the subtleties attached to each of our core values using just a few sentences. We went back and forth through the list with an editor, and the final result was a disappointment. Instead of clarity, we had created more confusion and clutter.

The entire process took us almost a year to complete. Fortunately, this time allowed us to look at the document with fresh eyes a few months later. It was much easier to diagnose the problems after taking time to reflect on the process. In the meantime, we also came across a presentation from Reed Hastings, the CEO of Netflix, about their culture. We appreciated the way in which their values were described using only a few simple and short sentences. I’m not exactly sure, but this might have been the turning point when we learned an important lesson. Having core values on a piece of paper is merely a tool. It will never convey the entire message, nor is it intended to do so. It’s useful to have a list of core values, but the more meaningful outcome is evident in our daily behavior. If people act upon our values on a daily basis, it was worth the effort to state them. It also means that we need to actively learn from each other what these core values might mean in different contexts.

With guidance from the presentation given by Mr. Hastings and after numerous discussions, we developed a solid description of our core values that hasn’t changed much over time.

Learning about the company and its values

The last stage before publishing our values, arguably the most important step, was mutual learning and an integrity test. Everyone was asked to prepare himself and herself for the meeting. The goal was to check if the defined values truly reflected our company and to clarify what each of us understood by the descriptions. All of the employees were divided into smaller groups of 5 to 8 people. We held online meetings since we are a remote company. ³ Each group spent around 3 hours discussing the values that we had defined. Our employees were well-prepared, active in the discussions, and willing to share their insights.

Examples of the questions we asked during these conversations were: ⁴

Do you think that the decisions we make on a daily basis align with our values?
Do you believe that the company is run in a manner that promotes the behaviors we identified as important?
Do you think that people are being promoted and fired in accordance with our values?

It was a tremendously helpful activity that allowed us to better understand ourselves and our environment. It also led to another important lesson, which was that the company was not always performing in accordance with its values. We are just people, each with our own shortcomings, agendas, and values. It’s impossible to always be perfectly aligned with what an organization needs or expects. This is why we treat our values as something we would like to gravitate toward rather than a hard and fast set of rules. We may go astray, but our values point us back in the right direction.

Acting upon your values makes all the difference

As of today (May 2018), it has been two years since we completed this process. It’s hard to accurately measure how much guidance the values provide for us on a daily basis. However, they are an integral part of our business processes:

Recruitment - the third stage of our recruitment process was created to ensure that there is a cultural fit between the company and our future employees
Evaluation and feedback – these values are an essential component during our self-set-salary process
Sales – they are used to evaluate potential customers to make sure that we will be able to work together effectively and harmoniously
Day-to-day collaboration on our projects

It’s hard to imagine now how we would make all of these decisions if we had not spent time clearly defining our culture. Our values are deeply ingrained in all of our business processes and guide us whenever we are in doubt. It’s one of our greatest achievements.

Conclusion

It’s inconceivable to imagine a successful company that does not have a strong culture. There are so many tasks to accomplish and decisions to make. If an organization’s efforts are not coordinated, the results will likely be far from optimal. Core values have provided us with an invaluable tool to make sure that we are working towards a shared vision. The greatest achievement, for us, is being practitioners of our core values and not merely believers. I’m curious about what your experiences are with shaping and operating within your company’s culture. What was your approach at the beginning, and what have you done to improve your culture? Feel free to share any questions and comments on Twitter.

Bonus Material

Here is a humorous presentation on our company’s values prepared by Maciej Małecki, one of our former developers.

Notes

Want to know more about what a culture is, what it isn’t, and how to change it? Consider watching - How to Start a Cultural Revolution by Ben Horowitz (Andreessen Horowitz) at Startup Grind Global. ↩
The importance of alignment is well-covered in Good to Great by James C. Collins. ↩
More about remote work can be found in Remote: Office Not Required by David Heinemeier Hansson and Jason Fried. ↩
Many other questions helping to check the integrity of an organization’s core values are suggested in this article by Wendy Maynard - How to Write Remarkable Company Core Values (Part I). ↩