Work on projects you love – when, where and how you want.
A Case For Decentralisation by Satalia. An operating model that enables people to truly be free to work on projects they love.
From the archives: Written by Adam West at Satalia for The Annual Digest.
Most companies don’t know it yet, but they are dying from within. They are haemorrhaging talent as a result of well capitalised competition, misery inducing organisational design, and environments that don’t empower people to innovate. How can companies invest inwardly; use technologies, and concepts like decentralisation and radical transparency to stay competitive? Can these same concepts be used to improve our societies?
Day in day out, we speak with organisations who think they are immune. Who think a strong brand and benefits are enough to attract the right type of talent. Time and time again, we see them come to the realisation that the goal posts for talent have changed, and that they need to change too.
Today: The Battleground is for Talent, Not Technology
The cloud, machine learning, optimisation and true AI either already are, or eventually will become commodities that everyone has cheap and immediate access to. No company competes today by their access to electricity, and no company will compete by their access to AI. Winners of the future will be determined by their ability to attract, retain and empower talent. The question is how?
Table tennis, office dogs, beanbags and kombucha-on-tap, though joyful are superficial employee perks that can easily be replicated. They might get people through the door, but when the going gets tough and your competitor gets a climbing wall, that door won’t stay shut for long. “We’ll keep talent by consistently paying more than the big tech companies.” - said by no one, ever. Through lack of regulation, sheer quality of vision, monopolistic powers or all of the above; the markets have rewarded tech giants with seemingly infinite access to cheap capital. You cannot sustainably out-benefit or out-pay them. And you might not want to anyway.
Rigid organisational hierarchies stifle innovation, breed politics, secrecy and internal competition. This makes people unhappy.
In his book Drive, Dan Pink argues that roles which require creative thinking and decision making, higher pay actually results in worse performance. Dan suggests intrinsic drivers are a greater source of motivation and satisfaction. At Satalia (where I work) we’re experimenting with how to build an environment that nurtures the following:
Freedom: To work on what you want, where and how you want to.
Mastery: Have the opportunity to master your craft.
Purpose: Can align with a higher social purpose.
Safety: Is psychologically safe to fail, learn and develop.
From our experience, most organisational structures aren’t conducive for these types of attributes. Tight management structures tend to create compliance over engagement. Rigid organisational hierarchies stifle innovation, breed politics, secrecy and internal competition. This makes people unhappy.
Building a new foundation for decentralisation
Companies start small and nimble, roles are fluid and communication is effortless. As they grow, they face new challenges and pressures. They implement hierarchy, managers, convoluted process and KPI’s. Before they know it, they’re 200 people, smothered in bureaucracy and wondering where they lost their edge. All companies start decentralised, the challenge is scaling it. That means replacing short term growth with long term investment in new processes, structures and technologies that enable innovation at scale - something we think about a lot.
Satalia applies AI to solve hard, operational problems for industry. Such as vehicle routing optimisation for Tesco, or workforce optimisation for PwC. More interestingly though, we’re drinking our own champagne - applying these same technologies internally to build a completely decentralised, swarm-like organisation. We’re just over 100 people, distributed across Europe, with no managers, hierarchy or KPI’s. People are free to work from where they want, when they want, and on the projects that are meaningful to them.
Transparency, resourcing and getting paid
Several years ago we built an open, peer-to-peer based salary system that used machine learning to help determine employee salaries. Everyone made public recommendations for their own salary, employees could vote on salaries to be increased, decreased or kept the same. We then analysed our entire digital footprint - Slack, Google, Email, Calendars which helped us understand the strength of two people’s relationship. This determined the weight of someone's vote on another's salary, which amongst other things determined their pay. By no means a perfect system, but a step in the right direction.
It is researched that men are more likely than women to ask for a pay raise when asked to recommend their own salaries, our male employees typically asked for more than their female counterparts. One of our female data scientists made a recommendation that was clearly less than what she was worth. Her peers recognised this, suggested she was worth more, and her salary was increased. By making salaries transparent, we alleviated the unconscious biases that in most organisations would have gone amiss. How many of the gender pay issues could be avoided by making salaries transparent?
We’re applying similar principles to resourcing, using machine learning to predict what skills and time projects might require. We then use optimisation to allocate the right people, with the right skills, capacity and preferences to those projects. Process by process, we’re building the foundations of a truly decentralised company. In the short term, it makes us faster and more innovative than our competition. In the long term, we have grander plans...
No matter how many smart people Facebook hire, they can't compete with everyone.
The future: Decentralise to survive
How do you compete with the deep pocketed tech companies? We think you reinvent the concept of a company. Decentralise your innovations, enabling a global talent pool to access and contribute to them. Go beyond open source and use emerging technologies to understand reputation, track contribution and pay people accordingly. Instead of slowly rotting inside otherwise occupied organisations, innovations are constantly improved and adapted to a changing world. No matter how many smart people Facebook hire, they can't compete with everyone.
Wikipedia’s business model doesn’t rely on fixed, centralised resources. Instead it enables a decentralised community of writers and editors to contribute - future-proofing itself and squashing its centralised competitors. But where are the Wikipedia's of other industries?
Like many open source projects, people contribute to Wikipedia out of goodwill or for kudos, but never for money. This limits the pool of talent who can or will contribute and reduces any incentive organisations have to open themselves up. Their existing structures, frameworks and beliefs limit them too, punishing even internal knowledge share. There's currently no economic model that can be used to make decentralisation work, either within organisations or on a wider scale. How do you allocate people to projects; measure contributions, set pay, profile skills, give feedback or recruit people in a decentralised way? We’re tackling these questions internally on a small scale, with the goal of building a platform that enables companies to easily decentralise themselves.
Small organisations should be baking decentralisation into their DNA. Fight the urge to move fast and break things and stop hacking growth. Instead pay as much attention to your processes, purpose and people as you do your products. Start by decentralising low impact decision making within your organisation. If it works, run bigger experiments. Imagine decentralised expensing, where any employee could expense anything they want. A £400 night at the savoy, dinner and cocktails. Now imagine if that decision was made transparent, visible to all of their peers, and their peers were the ones deciding their salary in a decentralised pay review process. Imagine they had visibility of cash flow, and could understand the impact of their decision of the financial health of the company. Would they still do it? Technology, transparency and organisational psychology can be used to build decentralised, self-policing systems that scale.
The future future: Effortless innovation at scale.
We envisage a world where anyone, from anywhere in the world can start an idea. Anyone is welcome to contribute to that idea, whether that be marketing, design, engineering or strategy and be paid fairly for that contribution. By unlocking global talent, and providing a mechanism for frictionless innovation, we hope to see the rapid creation of more purposeful organisations, ones that use technology to ensure our basic needs in healthcare, nutrition and education are met.
Intelligence is synonymous with adaptation. The quicker you adapt to a changing environment, the more intelligent you are. When technology is commoditised, you’ll live and die by your ability to attract talent and empower them to build innovations that keep you relevant. But it’s worth thinking bigger. What impact could you have if you allowed others to contribute to your work?
From the archives: Written by Adam West at Satalia for The Annual Digest.
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