Management Free Falling! Why The Zappos & Valve Model is Terrifying

In this 4th installation of an 8 part series, Brad Szollose and Rob Hirschfeld invite you to share in our discussion about failures, fights and frightening transformations going on around us as digital work changes workplace deliverables, planning and culture.

It doesn't make sense to hire smart people and tell
them what to do; we hire smart people so they can
tell us what to do. 

           — Steve Jobs, cofounder of Apple Computers

Do You Trust Your Workforce?

Trust, not stability, is the new management contract. Digital workers interpret strong management as a lack of trust.

Before we can talk about how to manage digital workers, we have to talk about trusting them to do their jobs. Why? Digital workers largely adopt Millennials' unwillingness to follow directed leadership. If we want to succeed in managing them then we need to foster mutual respect that is built on bi-directional trust.

20th Century business models were based on “if you can’t measure it, you can’t manage it” thinking that went along with mass manufacturing control, discipline and predictability. Physical goods were sold to a passive marketplace with minimal feedback from markets and internal workers; consequently, decisions could be made by a few leaders as long as workers did what they were told. All out-of-the-box decision had to go through a leader. The bigger the decision, the higher up that decision needs to go for approval. Like in our symphony analogy, control and discipline is the main ideology.

In a 21st Century business, there is no script just as there is no score for a Jazz concert. That does not mean it's a worker free-for-all! We still need to deliver products. But instead of top-down control, we talk about collaboration, shared mission and team work. This change is critical because digital work as so much situational content that it is impossible to proscribe it's exact results in advance. Like Jazz, you can create a general framework and guidelines but the exact composition has a degree of improvisation because it must reflect the players' situation in the moment.

Since you have to trust people to make decisions, you'd better create an environment
where they want to make the
best decisions for your business! 

  
Glassdoor’s multiyear study discovered that the “Best Places to Work” from 2009 to 2014 outperformed the S&P 500 by 115.6% while a similar portfolio named Fortune’s “Best Companies to Work For,” outperformed the S&P 500 by 84.2%! That is impressive.

What does trust look like? Leading gaming software maker Valve has thrown out the traditional employee handbook and replaced it with a 37 page breakdown of what they expect from an employee. The manual tells people their desk is on wheels so they can just roll over to a new team if they want to change jobs. The trust implied in that type of follow-your-passion enablement is unheard of in most workplaces.

Zappos, recognized 6 years in a row by FORTUNE’s 100 Best Companies to Work For®, pays employees $4,500 to quit if not satisfied with the culture. Zappos CEO Tony Hsieh advocates for a no management whatsoever model called Holacracy. Like Valve, Zappos counts on their hiring process to find workers who thrive in a self-led model where leadership is fluid and people organize themselves to solve problems and deliver value.

If our undirected Jazz model scares you, Holacracy will terrify you.

However, it's critical to understand that neither Zappos nor Value are “wild west” work environments. Like a top Jazz ensemble they provide trained performers, concrete structure, appropriate tools and clear expectations. By giving your teams the right tools to know what to do when they are working on their own, you will see a different workforce, striving to make your company better than even you thought possible.

Why does this work? In digital work, we have to give up the idea that the knighted leaders make the best decisions.

 

It's not just a question of good decisions, we also need to improve quality and speed of action. Check out Navy Submarine Captain David Marquet's talk on Greatness, based on his book, Turn The Ship Around! He explains quite well why people should be allowed to think and take responsibility for their work.

In the end, it's simply physics. Without trust, all decisions must flow downward and the entire organization is limited by the leadership. Our information economy makes it simply impossible for leaders to sufficiently learn and react. When people are trusted to think for themselves and take control for the products they create there is a psychological shift. They take ownership in their work. That means quality and output go through the roof as they get competitive with creating a wow product.

So, how can you create a company culture that taps into the skills sets of a new digital worker yet engages everyone for the long haul? Let’s dig in and instead of giving you rules or regulations, let’s start with a few principles to create the right environment.

Tune it for our next post:  
Setting Direction - How Too Much Freedom is Bad Too.

Thank you for following along.

Here is Navy Submarine Captain David Marquet's talk on Greatness...enjoy:

And Click Here for Valve's Employee Handbook.

Our point of view: About the authors

Rob Hirschfeld and Brad Szollose are both proud technology geeks, but they’re geeks from different generations who enjoy each others perspective on this brave new world.

Rob is a first-generation Digital Native. He grew up in Baltimore reprogramming anything with a keyboard—from a Casio VL-Tone and beyond. In 2000, he learned about server virtualization and never looked back.

As founder and community lead of the OpenCrowbar project, Rob is the CEO of RackN, which provides support, consulting and commercial extensions to the community project. 

Rob is also a board member for the OpenStack Foundation. A position he was elected to fill in 2012, 2013 and 2014 and the chair of DefCore committee.

Brad is a Cusp Baby Boomer who grew up watching the original Star Trek series, secretly wishing he would be commanding a Constitution Class Starship in the not-too-distant future.

Since that would take a while, Brad became a technology-driven creative director who cofounded one of the very first Internet agencies during the dot-com boom. As a Web pioneer, Brad was forced to invent a new management model that engaged the first wave of Digital Workers.

Today, Brad helps organizations like Dell and MasterCard close the digital divide by understanding it as a cultural divide created by new tech-savvy workers ... and customers.

Beyond the fun of understanding each other better, we are collaborating on this 8 part blog series for different reasons.

• Brad is fostering liquid leaders who have the vision to span cultures and to close the gap between cultures.



• Rob is building communities with the vision to use cloud products that fit the Digital Native culture.
  
   

Truth: The Most Important Environment for Leadership to Work Revisited: It's the Hardest Thing to Do...

On page 9 of Liquid Leadership I point out the Credo of a Liquid Leader. Most importantly, my 2nd law stands out the most for leadership to be affective.

"...Leadership should cultivate an Environment Where It Is Free and Safe to Tell the Truth.

Ever work for a company that micromanages everything to death? In these environments a paper trail becomes more important than getting the work done. Our current enthusiasm for technology has created even more potential for micromanagement, via massive amounts of emails and documentation and endless meetings to sort through it all. Yet when this temptation is given in to, the result isn’t better communication or higher productivity, but the opposite. Management becomes the last to know what is actually happening.

Conversely, in companies that have moved to flatten their hierarchies and create environments where it is safer to point out the truth, you begin to notice that each person takes their role seriously. When responsibility is shifted to the individual—when people are given the freedom and power to manage their time and solve problems—the result is that no one wants to let down even a single member of their team.

An organization like this runs more smoothly and with more trust. The best and the brightest naturally gravitate toward the chance to work with one another. They know courage will be rewarded, not penalized, and innovation will see the light of day. Such environments operate like entrepreneurial start-ups, with each individual engaged in the success of the company. People are encouraged to challenge one another. They operate with confidence and a sense of personal ambition because they have skin in the game.

This approach may fly in the face of every business manual you have ever read, but those manuals are out of date. We are not in easy times. Consider that betting on one direction or a single type of technology can send a company into bankruptcy overnight. All the more reason to put aside your ego, to listen, and to encourage the sharing of knowledge in every area of an organization’s operations. Environments such as these do not centralize creativity; they make it a systemic part of what drives their entire organization.

It is your job as a leader to support the development and creation of big ideas, integrating them into your company’s mix of products..."

The truth has become fuzzy these days as people are more interested in the almighty dollar instead of doing great things. We know fluoride is not safe to put in our water and drink on a daily basis. We know our food supply is filled with carcinogenic chemicals. We know our politicians are...well you get my drift.

But when drug company whistle-blower Cheryl Eckard tried to fix problems at a GlaxoSmithKline pharmaceutical factory in Puerto Rico she was fired.

The 60 Minutes story is here:

Bad Medicine: The Glaxo Case 
January 2, 2011 7:00 PM

Yet when Cheryl brought well documented problems to her boss, she was dismissed, told that it would be taken care of and eventually, when she pressed harder, fired. Admitting the truth can destroy entire companies and bring about unwanted changes. Yet the truth is where progress begins.

It is hard to tell the truth when doing so could bring
a wave of lawsuits

Just look at the dental industry. IF they admit that Fluoride and mercury cause certain diseases, the entire industry could be brought to their knees. But, with that said, how hard is it to act like a human being?

Some believe that Cheryl Eckard did what she did for the money - (she was awarded $96 million from a $750 million suit against GSK)...really? Did she know she would be a multimillionaire when she discovered drug mix-ups and unsanitary conditions at Glaxo's plant? It was her job to oversee quality control and if she had not followed through she would have been fired. But what is unforgivable is the reaction of the executives; they simply tried to make it seem as if conditions weren't that bad.

Shame does not seem to exist in some boardrooms

Want to make changes in your organization? How about your life or your community? Start by facing the truth...not your opinion. Like maybe my wife is right – I don't look good in that sweat suit anymore, (not that that has ever happened to me. LOL).

What is important to you? Paper trails, micromanagement, telling people what to do? Truth telling is not pretty...but it is transformational.

And thank you for stopping by,

Brad Szollose
Bridging Generational Chaos: Multigenerational management expert, award-winning author, business consultant and keynote speaker


“The Beekeeper and The Watchmaker” story can be found in Navigating The Growth Curve by James Fischer. Want to learn how to manage like a beekeeper? Check out James Fischer’s Growth Curve Institute.

Brad Szollose is a much sought-after generational expert, management consultant and keynote speaker who helps smart companies understand just how much technology has transformed corporate culture and behavior… and how that impacts management interaction, expectations and sales in The Digital Age.



But this is not based on management theory: With a 30 year career as an entrepreneur he knows firsthand what it’s like to grow a company from a simple idea in a coffee shop to an internationally recognized brand.


Brad is a former C-Level Internet Executive who went from entrepreneur to IPO in 3 yrs—co-founding K2 Design, the very first Dot Com Agency to go public on NASDAQ. His company experienced 425% hyper-growth for 5 straight years, expanded from 2 business partners to 4 with 60+ employees and offices worldwide. At its height, K2 was valuated at over $26 million. 

His results only management model (ROWE) was applied to the first wave of young Generation Y workers producing great results—winning K2 the Arthur Andersen NY Enterprise Award for Best Practices in Fostering Innovation.

Brad Szollose is also the *award-winning author of Liquid Leadership: From Woodstock to Wikipedia which explores the subject of new leadership styles – mainly how to get the tech-savvy Generation Y and analogue driven Baby Boomers working together. ISBN-13: 978-1608320554

Known for his humorous and thought-provoking presentations, Szollose received the highest testimonial of his career from a C-Level audience member: "I just had my mind blown." Brad’s keynotes and workshops are highly interactive, heart-warming, humorous, and filled with high-content information that challenge assumptions and help leaders and managers create a better work environment for innovation to thrive.


Liquid Leadership has been called "THE guidebook for the 21st Century" and has won the 2011 Axiom Business Book Award silver medal for leadership, The Indie Business Book runner up silver medal as well as becoming a #1 Best-Selling Business Book on Amazon for Organizational Learning. Published in the United States by Greenleaf Book Group, in India by Prolibris and in South Korea by UI Books/Iljinsa Publishing.

Mr. Szollose also writes a monthly column on business and marketing techniques that reach Generation Y for A Captured Mind newsletter and is part of The Mind Capture Group faculty.

Today, Brad helps businesses close the Digital Divide by understanding it as a Cultural Divide – created by the new tech-savvy worker...and customer. 



* 2011 Axiom Business Book silver medal winner in the leadership

* #1 Amazon Best-Selling Author

"I just had my mind blown..." - A.S., Vistage, New York

Liquid Leadership by Brad Szollose is available at all major bookstores and for Kindle, Nook, iPad and Sony ereaders. Internationally published in India and S. Korea.

Are You a Beekeeper or a Watchmaker? Revisited

During the summer of 1981, with the smell of chocolate in the air, I became the assistant manager in the games division of Hersheypark in Pennsylvania. My specialty within the chocolate themed amusement park was running the water balloon race. You know the game—squirt water into a plastic clown’s mouth to blow up a balloon. The first one to pop their balloon won a bright yellow plush stuffed banana. I wanted to trade all that in for a management position. 


Looking back on it now is quite amusing. I was an 18-year-old kid attempting to manage other 18-year olds. Picture Doogie Howser trying to act managerial and you get the picture. 


Fast-forward 18 years later. I would find myself leading the Dot Com boom as the cofounder of the very first Internet Agency to go public with an IPO on NASDAQ—K2 Design, Inc.


Now please understand, I am not telling you this to brag, I am telling you this to impress upon you how much I HAD to change over those 2 decades. I was raised in a very small town and taught to just get a job, work long hours and hopefully work your way up the ladder. But during those Silicon Alley days on Wall St., in order to meet the demands of a new tech-savvy workforce, I had to adapt. If I resisted, my best and brightest would quit, taking their ideas to our competition.


Fast-forward another 18 years. Today’s younger workforce is not motivated by money, power or the corner office, but instead, motivated by rich experiences and incredibly dynamic work environments that continuously challenge their abilities. And I just want to clarify, when I say younger workforce I mean 37 years of age and younger— a.k.a. Generation Y, Millennials, Gamers and/or Digital Natives. But that doesn’t mean I am excluding my fellow Baby Boomers. This benefits all of us as I am about to point out. So first, let’s ask ourselves a question: Are you a Beekeeper or a Watchmaker?

A watchmaker works in an environment of precision.

In order to create a beautiful timepiece every single day, each phase of the watchmakers operation must be micromanaged. One micron off could lead to disastrous results. Innovation only comes from the top of such a company. Ideas and thoughts from the assembly line get in the way of output. Head down. Do your job. Meet your quota. Listen and obey. Sound familiar?


But, conversely, the beekeeper operates in a world of constant chaos and shifting conditions.

His or her job consists of overseeing 150,000 bees, living and working out of over 4-dozen, 3-foot-high “wooden hives.” Instead of micromanaging like our previously mentioned watchmaker, the beekeeper must foster a nurturing environment that supports the production of honey. Micromanaging would get in the way of the hive. So a beekeepers job is to give the bees the best environment possible for seamless production. In other words, get out of the way and let them manage themselves.


To the untrained eye, the hive can look like nothing but chaos. What is really going on is each bee acts as an independent agent whose soul mission is in alignment with the hives overall mission: produce honey. The beekeeper CANNOT guarantee an exact outcome, but he trusts that each will do what they do best.


This management model when applied to the real world, relies on a simple premise: People are free to do whatever they want, whenever they want, as long as the work gets done.

In today’s parlance this “beekeeper” style of management is called a Results Only Work Environment or ROWE for short.


You cannot create incredible products in an environment that micromanages creativity and punishes innovation. Your job as a leader in the 21st Century is not to be a commander shouting orders from on high but be the beekeeper who strives to bring out the very best in people. 


Thanks for stopping by...

Brad Szollose
Bridging Generational Chaos: Multigenerational management expert, award-winning author, business consultant and keynote speaker


“The Beekeeper and The Watchmaker” story can be found in Navigating The Growth Curve by James Fischer. Want to learn how to manage like a beekeeper? Check out James Fischer’s Growth Curve Institute.

Brad Szollose is a much sought-after generational expert, management consultant and keynote speaker who helps smart companies understand just how much technology has transformed corporate culture and behavior… and how that impacts management interaction, expectations and sales in The Digital Age.



But this is not based on management theory: With a 30 year career as an entrepreneur he knows firsthand what it’s like to grow a company from a simple idea in a coffee shop to an internationally recognized brand.


Brad is a former C-Level Internet Executive who went from entrepreneur to IPO in 3 yrs—co-founding K2 Design, the very first Dot Com Agency to go public on NASDAQ. His company experienced 425% hyper-growth for 5 straight years, expanded from 2 business partners to 4 with 60+ employees and offices worldwide. At its height, K2 was valuated at over $26 million. 

His results only management model (ROWE) was applied to the first wave of young Generation Y workers producing great results—winning K2 the Arthur Andersen NY Enterprise Award for Best Practices in Fostering Innovation.

Brad Szollose is also the *award-winning author of Liquid Leadership: From Woodstock to Wikipedia which explores the subject of new leadership styles – mainly how to get the tech-savvy Generation Y and analogue driven Baby Boomers working together. ISBN-13: 978-1608320554

Known for his humorous and thought-provoking presentations, Szollose received the highest testimonial of his career from a C-Level audience member: "I just had my mind blown." Brad’s keynotes and workshops are highly interactive, heart-warming, humorous, and filled with high-content information that challenge assumptions and help leaders and managers create a better work environment for innovation to thrive.


Liquid Leadership has been called "THE guidebook for the 21st Century" and has won the 2011 Axiom Business Book Award silver medal for leadership, The Indie Business Book runner up silver medal as well as becoming a #1 Best-Selling Business Book on Amazon for Organizational Learning. Published in the United States by Greenleaf Book Group, in India by Prolibris and in South Korea by UI Books/Iljinsa Publishing.

Mr. Szollose also writes a monthly column on business and marketing techniques that reach Generation Y for A Captured Mind newsletter and is part of The Mind Capture Group faculty.

Today, Brad helps businesses close the Digital Divide by understanding it as a Cultural Divide – created by the new tech-savvy worker...and customer. 



* 2011 Axiom Business Book silver medal winner in the leadership

* #1 Amazon Best-Selling Author

"I just had my mind blown..." - A.S., Vistage, New York

Liquid Leadership by Brad Szollose is available at all major bookstores and for Kindle, Nook, iPad and Sony ereaders. Internationally published in India and S. Korea.

Are You a Beekeeper or a Watchmaker?

During the summer of 1981, with the smell of chocolate in the air, I became the assistant manager in the games division of Hersheypark in Pennsylvania. My specialty within the chocolate themed amusement park was running the water balloon race. You know the game—squirt water into a plastic clown’s mouth to blow up a balloon. The first one to pop their balloon won a bright yellow plush stuffed banana. I wanted to trade all that in for a management position. 


Looking back on it now is quite amusing. I was an 18-year-old kid attempting to manage other 18-year olds. Picture Doogie Howser trying to act managerial and you get the picture. 


Fast-forward 18 years later. I would find myself leading the Dot Com boom as the cofounder of the very first Internet Agency to go public with an IPO on NASDAQ—K2 Design, Inc.


Now please understand, I am not telling you this to brag, I am telling you this to impress upon you how much I HAD to change over those 2 decades. I was raised in a very small town and taught to just get a job, work long hours and hopefully work your way up the ladder. But during those Silicon Alley days on Wall St., in order to meet the demands of a new tech-savvy workforce, I had to adapt. If I resisted, my best and brightest would quit, taking their ideas to our competition.


Fast-forward another 18 years. Today’s younger workforce is not motivated by money, power or the corner office, but instead, motivated by rich experiences and incredibly dynamic work environments that continuously challenge their abilities. And I just want to clarify, when I say younger workforce I mean 37 years of age and younger— a.k.a. Generation Y, Millennials, Gamers and/or Digital Natives. But that doesn’t mean I am excluding my fellow Baby Boomers. This benefits all of us as I am about to point out. So first, let’s ask ourselves a question: Are you a Beekeeper or a Watchmaker?

A watchmaker works in an environment of precision.

In order to create a beautiful timepiece every single day, each phase of the watchmakers operation must be micromanaged. One micron off could lead to disastrous results. Innovation only comes from the top of such a company. Ideas and thoughts from the assembly line get in the way of output. Head down. Do your job. Meet your quota. Listen and obey. Sound familiar?


But, conversely, the beekeeper operates in a world of constant chaos and shifting conditions.

His or her job consists of overseeing 150,000 bees, living and working out of over 4-dozen, 3-foot-high “wooden hives.” Instead of micromanaging like our previously mentioned watchmaker, the beekeeper must foster a nurturing environment that supports the production of honey. Micromanaging would get in the way of the hive. So a beekeepers job is to give the bees the best environment possible for seamless production. In other words, get out of the way and let them manage themselves.


To the untrained eye, the hive can look like nothing but chaos. What is really going on is each bee acts as an independent agent whose soul mission is in alignment with the hives overall mission: produce honey. The beekeeper CANNOT guarantee an exact outcome, but he trusts that each will do what they do best.


This management model when applied to the real world, relies on a simple premise: People are free to do whatever they want, whenever they want, as long as the work gets done.

In today’s parlance this “beekeeper” style of management is called a Results Only Work Environment or ROWE for short.


You cannot create incredible products in an environment that micromanages creativity and punishes innovation. Your job as a leader in the 21st Century is not to be a commander shouting orders from on high but be the beekeeper who strives to bring out the very best in people. 


I look forward to seeing you there...

Brad Szollose

“The Beekeeper and The Watchmaker” story can be found in Navigating The Growth Curve by James Fischer. Want to learn how to manage like a beekeeper? Check out James Fischer’s Growth Curve Institute.


Brad is the award winning, international bestselling author of Liquid Leadership: From Woodstock to Wikipedia: Multigenerational Management Ideas That Are Changing The Way We Run Things ISBN-13: 978-1608320554

As a Baby Boomer, Brad grew up watching the original Star Trek series, secretly wishing he would be commanding a Constitution Class Starship in the not too distant future. Since that would take a while, Brad became a technology driven, creative director who co-founded one of the very first Internet Development Agencies during the Dot Com Boom—K2 Design. As a Web Pioneer, Brad was forced to invent a new management model that engaged the first wave of Digital Workers. Today,Brad helps Fortune 500 Companies close the Digital Divide by understanding it as a cultural divide—created by a new tech-savvy worker...and customer.

Mr. Szollose also writes a monthly column on business and marketing techniques that reach Generation Y for A Captured Mind Newsletter and is part of The Mind Capture Group faculty.

"I just had my mind blown..." - A.S., Vistage, New York