Work to create a predisposition to innovate in the social dimension

I saw this post by one of the founders of AngelList, and I thought it was illustrative of some of the challenges of the lean social approach that I have been advocating.

Babak Nivi, Ask forgiveness, not permission

AngelList “corporate policy” is that team members should ask forgiveness, not permission.

We would rather have someone do something wrong than ask permission to do it.

Or better, we would rather have someone do something right and not need permission to do it. This is the most common outcome.

We would rather have people ship to production whenever they want, than go through an internal review process. We can fix it on production. We prefer the customer’s review process. And it isn’t too hard to reveal a new feature to a small portion of our users and iterate on it as we expand it to more users.

Eliminating permission increases the speed and diversity of our decision-making. Our incubator applications are a good example of diverse decision-making: one of our team members built it even though I was telling him, “This is fine, but I don’t think it is that important. Why don’t you work on something else.” It ended up being very important to our users and mission.

There are some sensitive parts of our product that are walled off from this “ask forgiveness” policy. There are some things we want reviewed by the people who “know better”. But it’s really rare.

This policy only works if you hire insanely smart and capable people, and let go of the ones who are not. We also filter for people who are mission-oriented, care about our customer and want to learn more.

Leaving aside the ‘letting go of the ones who are not’ line, I unreservedly applaud this management dogma. The equivalent in the lean social realm is that individuals should be free to innovate in the way that their own work gets done, or a group should be able to redefine their flow of work, without some huge review process.

Certainly, the feedback of others is still relevant, and you are going to have to take responsibility for the results of your innovation — and clean up any messes that are caused — but the inclination should be toward innovation, and the attempt to improve customer satisfaction, product quality, response times, whatever. And this comes with the need to measure what you are seeking to improve. But the predisposition should be to act, to innovate as understood by the people closest to the work being done.

Now, back to the hiring ‘insanely smart and capable people, and letting go the one who are not’. We have a throwaway culture, and that manifests itself in business — in part — by a lack of real depth in hiring. Too little time is spent to find out if people fit in advance, if they have the skills and mindset needed for a job, or for a long-term role at a company. Especially in the high velocity startup landscape, the credo as laid out by Navi seems to hold. I have heard other West Coast tech CEOs advocate firing the bottom third of workers every year.

Personally, I find myself leaning more and more to the ‘no fire’ policy (see What does a ‘No Fire’ policy change? Everything.), which leads to very different approaches to hiring, and the significant burden of mentoring and stewardship for managers and leaders in a company. But even in a company that hasn’t gone that far, I think there should be a greater commitment to the staff that a cavalier, libertarian attitude of firing everyone who doesn’t match up to some unclear guidelines about being insanely great. It becomes all too easy to say that you want people to innovate, to make mistakes, and learn from them, but then to decide to fire someone because they didn’t learn fast enough, or they didn’t lean exactly the lessons they were supposed to. I think the business has to commit to a deeper investment in people than that.

What does a ‘No Fire’ policy change? Everything.

Imagine if a company had a ‘no fire’ policy. The impacts touch everything.

David Marquet interviewed Charlie Kim, the CEO of NextJump, a company focused on rewards and loyalty programs. Kim has instituted  a ‘no fire’ policy at NextJump, and he realized — after a six month consideration of the idea — that such an approach would change everything in his business:

David Marquet, How would a #NoFirePolicy affect your company?

Charlie Kim: Once you realize that you are entering into a lifelong relationship, hiring starts to look a lot more like adoption, or dating. Multiple interactions over some time are required before our team would get comfortable with a prospective hire. Every hiring manager started hiring more carefully, something I’d been advocating for but couldn’t make happen in every manager. Without further direction, they started treating hiring like adoption: once we take someone into our family, they’re here for life, when things don’t work, they’re responsible for training them, helping them.

Training also became much more comprehensive, touching subjects such as character, grit, and integrity in ways we had previously viewed as beyond the scope of company training.

I guess it goes beyond the normal requirements when you don’t have the option to simply dump someone: you look deeper into their make-up and less at their make-up. And the impacts are fairly conclusive: no turnover.

DM: Have you seen any impacts?

CK: Almost immediately turnover went from 40% to 0%. Recruiters and other CEOs have told me that NxJumpers aren’t even taking their calls. The percentage of employees who said they “love,” not like, not tolerate, but LOVE their jobs went from 20% to 90%.

I told you about the formal deliberate changes we made to our training programs. There were powerful, self-organizing impacts as well. Peer counseling groups formed in every part of the company. Groups of 3 to 4 people meeting regularly to help each other grow, talk through hardships.

Probably the biggest impact was the effectiveness of performance evaluations. Development discussions were usually wrought with skepticism from the employee standpoint — are you really trying to help me or just documenting material to potentially fire me? Since getting fired wasn’t an option, everyone became more open to talk about their real problems. Performance evaluations became what it was always intented for – development discussions, open, honest and often real and raw conversations on what people are struggling with. Since people could voice real concerns at work, they left those toxins there and didn’t take them home with them. Home life improved as well.

Changing the social contract so fundamentally — treating people like family and not discardable — is a completely radical move. I am sure that we we’ll see more of this idea as more companies begin to realize the value of standing for something more that increasing profits for the shareholders.