25 Nov Business as unusual: the future of work is in…Poole?
What can a small factory, located in Poole in the UK, teach us about the future of work? As traditional companies look for new ways of working, there is a lot of talk about finding inspiration in Google’s 20% time, Zappos’ holacracy, Valve’s flat company…but here are three lessons from our visit to Matt Black Systems that may make you look beyond the West Coast’s shiny new models.
It felt surprisingly old-fashioned to turn up in a small town on the south coast of England, and have to dial a taxi before checking into our bed and breakfast (one day you can remind your kids that this is where the B&B in AirBnB comes from). And it felt surreal that we’d come to this traditional town, in the traditional industry of aerospace parts manufacturing, to get a hands-on experience of a company with no managers, and a very different way of getting things done.
The next surprise soon followed, as our 9am ‘breakfast meeting’ with founders Julian and Andrew lasted until 9pm…at which point they confessed that they hadn’t locked up their own office themselves in several years, and no longer had the right keys. How could a CEO possibly have time for an unplanned 12-hour meeting, and not have the keys to his own company?
Julian and Andrew explained that their company, Matt Black Systems, is fine without them– it is made up of 15 self-managing individuals. Each individual runs like an autonomous business – they each sell, design, manufacture and deliver their products. They each have their own profit and loss sheet, and if they need work done by a colleague, they must buy and sell from each other on an internal marketplace.
No one is told how many hours to work, or how to do their work. Instead, they are only measured on the value they create for their customers, using the criteria of quality (based on number of customer returns), delivery (measured by number of on-time deliveries), profit (on their work), and compliance (with the auditing rules that are set up).
They can fund each others’ businesses in return for equity and a seat as advisor on that person’s ‘board of directors’ (this replaces hiring). If they run out of money, they have to convince their colleagues they are worth investing in. If that fails, they can sell up their assets – their contacts, contracts and technology – to the highest bidder, and move on (this replaces firing).
Having heard this weird and wonderful theory from Julian and Andrew over breakfast/lunch/dinner, we arrived at the factory on day two to see how this worked in reality. After hearing about the ‘new models of work’ at Google, Valve and Zappos, I was expecting this unconventional model to be matched with equally shiny playground slides, free food and ping-pong tables.
I couldn’t have been more wrong – the office was entirely grey, uniform, and divided into cubicles. “Where are the playground slides?!” I jokingly asked Nick, one of the ‘businesses’ that was showing us around. He explained that paying for a slide from your own paycheck just isn’t the same – here, creativity comes from freedom, not free food.
It became clearer and clearer that the way Matt Black Systems was solving the problems of traditional management is in complete contrast to the new “conventional wisdom” employed by companies like Google, Zappos and Valve. Not only that, but these icons in “employee experience” could actually learn a thing or two from Matt Black through these 3 lessons in reinventing models of work:
1) Eliminating managers doesn’t mean you have to lose order.
Companies like Valve have gotten rid of managers; as their employee handbook says, “when you’re going out of your way to recruit the most intelligent, innovative, talented people on Earth, telling them to sit at a desk and do what they’re told obliterates 99 percent of their value”. Unfortunately for companies like Valve (see glassdoor reviews) and Buffer (see this fantastic lessons learned blogpost), their lack of structure can leave some people feeling lost and clueless.
At Matt Black, there is a clear and comprehensive system in place which ensures balance is maintained. Each individual has the freedom to approach work however they want, but must log all their activities (sales, deliveries, returns) in their ERP system. This system then automatically measures them on the criteria of Quality, Profit, Delivery and Compliance each month. If they are struggling, they can either turn to the comprehensive ‘recipe’ system which explains how to do any task they might need for running a full business; alternatively, they can ask their ‘board of directors’ – the colleagues who have invested in them.
2) You don’t need a complex process to coordinate autonomous individuals.
As more and more companies move away from top-down management, they realise they need a way of coordinating people. Companies like Amazon and Zappos are embracing holacracy; while it’s (inaccurately) praised for its lack of hierarchy, it actually entails a rather complicated set of procedures for meetings, facilitation, and constitutions. Wait, how does this save time and give people freedom to do things how they want?
At Matt Black, decision-making is easy to understand because it’s more like our lives at home, rather than introducing an alien system. If you want to make an agreement with your neighbour, you can work it out directly with them – rather than needing to go up and down management chains or round and around holacracy circles. The structure of the ‘individuals as businesses’ is designed to minimise the number of interactions needed to make decisions.
Watching the constant interactions on the workshop floor, we saw how requests and checks were dealt with casually and quickly, as everyone can make their own decisions. In fact, the 15 ‘businesses’ only meet once every 3 months, to ratify the big changes that they already decided over cubicle walls from the preceding months. (To see this system at scale, look at Morning Star, the largest tomato processing company in the US with 4,000 employees, where people make direct agreements with the people in the production chain that they work with).
3) If you want startup behaviours, go beyond cosmetic changes
Large companies are clamouring to make their employees more entrepreneurial, take more initiative, and make disciplined decisions with their budgets ‘as if it was their own money’. At Google this is apparent in ‘inspirational’ quotes written on walls, and in the crazily-named and fun ‘Googliness’ culture, but people say they don’t mean much and treat them with skepticism. The famous 20%, which “is really 120% time”, goes unused and initiative is often squashed through layers of bureaucracy.
At Matt Black, we saw how giving individuals real ownership and accountability for a clear part of the business drove these desired behaviours. When they travel, they treat the money as if it is their own, because it is. When stock supplies were decentralised and each individual became responsible for their own orders, every single person changed suppliers to find more cost effective deals, and stopped over-stocking. It’s interesting to see large companies like Spotify successfully create these behaviours by organising into small teams that each have ownership and accountability for part of the product – and great to take Matt Black as inspiration for the direction they could push into further.
The two days at Matt Black had started as surreal, but the more time we spent there, the more ‘real’ it felt in relation to both traditional companies, and to the idolised new models of work. We left wondering how anyone manages to work any other way…