Do you have an interesting story to share about the pursuit of happiness among workers?

On the new Happy Melly blog we have started publishing stories of happier workers. The next story could be yours!

Did you introduce a practice in your organization which helped your colleagues to enjoy their jobs better?

Did your manager do something for you which helped you be happier in your job?

Did one of your co-workers somehow contribute to the happiness of everyone in the company?

Let us know!

You don’t have to write the story yourself. My good friend Vasco is collecting and prioritizing the suggestions. My dear cousin Erik is a writer and he can spin your idea into a nice story. One of them can contact you by email or Skype to ask you for some details.

We started with a story about a Happiness Wall in Rotterdam, a new Sprint Planning III practice in Berlin, and opera performers as an inspiring metaphor.

The next story could be yours.

If you have something nice to share, just send me a quick note, and we will do the rest. When the story is published, you can forward it to the whole world.

Help us share it, and inspire others!

I was asked to read a few articles for a dialog seminar with my friends at KnowIt in Göteborg.

The first one described the nine team roles of Belbin. It says some people behave like Shapers, or Resource Investigators, or Implementors, or Specialists, etc… I recognized myself in all of them, depending on the context. I sometimes have been a Monitor Evaluator and a Complete Finisher, but I can also be a Teamworker or a Co-ordinator. And on the terrible train ride to Göteborg yesterday I felt more like a Plant. Are these categories of behaviors supposed to mean anything for me? I can’t decide.

The next document described the five dysfunctions of a team. It depicts a hierarchical model of organizational behaviors. At the bottom it all starts with Trust, followed by Conflict. On the way to the top we find Commitment and Accountability, ultimately culminating in Results. But I could agree to any order of these. Why does trust come before results? I trust people more after they deliver results. And why does accountability depend on commitment? I feel more committed when others have shown accountability. Am I living in an upside-down world? I don’t know.

There were several other documents with boxes and arrows, definitions and categories, quadrants and matrices, circles and pyramids, and they didn’t mean much to me.

I’m a bit tired of such models, I noticed.

I’ve probably seen too many.

But then I read Valve’s Handbook for New Employees. I liked this document much better! It had stories, illustrations, and metaphors. And humor! For me it made much more sense than any amount of boxes and arrows. The handbook perfectly illustrates what kinds of behaviors the people at Valve need from their employees, without putting them in boxes. It explains how trust and results go hand in hand. And no pyramids anywhere!

And the handbook was created by the people themselves.

I could see that it means a lot to them.

I am glad to announce that Happy Melly One was officially registered this week in Rotterdam, The Netherlands. This legal entity will be the first one to adopt the Constitution of Happy Melly. As the only owner in the network at this point I have agreed with co-founders Maarten and Vasco that (for the time being) I will act as the CEO of Happy Melly. And my first job is... inviting more people.

We need multiple Happy Melly entities in different parts of the world, and I am looking for people to start, own, and run those businesses.

What do we expect from legal entities?

It is the entities who will sign agreements with customers and suppliers, facilitators and content creators, send and receive payments, acquire properties such as domains and trademarks, pay local taxes, and (hopefully) make a profit. In short, the Happy Melly business will be owned collectively by the legal entities. You will be interested to know that last year the Management 3.0 licensing program had almost EUR 100.000 of revenue. I will hand over this program to Happy Melly and we will start several more programs and brands that all have to be owned, managed, and leveraged.

Do you want to be part of this and start your own Happy Melly entity? Are you interested in legal and financial stuff? Please let me know via email.

I also need people who can play the roles of CFO, COO, CIO, CTO, CMO, etc.

What do I expect from the CxO’s?

As soon as there are multiple legal entities, they elect a CEO to coordinate everything globally. (For now that’s me.) The CEO selects board members to help him. This is some of the work I expect we will need to do:

• Coordinating the finances of entities, calculating contributions to the network, balancing the accounts, etc... (CFO)
• Coordinating gatherings and huddles with legal entities and stakeholders, documenting decisions, doing legal stuff, etc... (COO)
• Coordinating social network accounts, websites, mailings, event sponsoring, branding across materials, etc... (CMO)
• Coordinating content repositories, directories of stakeholders, data gathering and analysis across events and properties, etc... (CIO)
• Coordinating technologies, technical platforms, development of tools, websites and applications, etc... (CTO)

(Note: I expect people understand me better when I refer to the traditional roles, but we will probably choose more interesting names. I look forward to be working with a Chief Coffee Officer.)

It is important that board members serve the network of entities and stakeholders, which is why they have to have leadership qualities. They will get some kind of compensation for their services from the business.

If you find any of this interesting, please contact me via email.

The problem with practices is that bad practices are easy.

When you create a standard business, it is deceptively easy to create one legal entity with shareholders, appoint a top manager, form a management team, and a hire a truck load of employees to be bossed around and do all the work.

Et voilà! You now have a command-and-control hierarchy.

Such easy solutions are often the wrong ones, although they are applied by many. Only few people appreciate that good practices are hard.

When you aim for an agile business, it is quite an interesting challenge to create multiple independent legal entities, agree on a joint Constitution, elect the top manager democratically, and collaborate with self-employed workers who co-manage the business as stakeholders.

Surprise! You now have a lead-by-example network.

Which is better?

Well, I firmly believe that business networks are more agile, innovative, and engaging than business hierarchies. But the proof of the pudding is in eating your own dog food, and putting money in your mouth. Or something like that.

And so we did.

Happy Melly has officially launched this week.

Last month my blog was exactly 5 years old. I celebrated this moment by asking readers which blog post had been the most important for them. And I sent some free goodies (games and a booklet) to everyone who replied. Here are some more comments that poured in…

(Oh and sorry, the deadline is closed now!)

“A recent one that stuck with me, and is actually causing me to stop every now and then and think about it, is Why Not Delight the Supplier? It's actually not as much the idea of delighting the supplier, but the idea that there are multiple stakeholders around every organization and every one of them ought to be looked after.”
- Flavius

“My favorite post is the T-Shirt Test. Although I doubt I would proudly wear a t-shirt with the photo of my pet on it, I got your point. It's a great source of reflection about the pride you or your team has of working in the organization, which is at the end key to have successful implication from the team in the projects.”
- Pierre

“One of the posts that I liked was 360 Degrees Dinner. We are currently doing 360 degrees evaluation by email. I liked your post because it made me think of another view of an important process I do not like.”
- Boris

“I did some browsing back the history of your blog until I found the very first post that led me to your site. "Top 15 Systems Thinking Books" was the title of it - and it was almost two years ago.”
- Oliver

“One of the most important for me was the post Top 100 Agile Books (Edition 2012). It was probably one of easiest posts for you :). Also I would like to mention the funniest part in your blog posts: Nonviolent Communication (Stop It!) and the Video from Bob Newhart (stop It). Stop It method could also help to avoid long, aimless, tough discussions. In big projects you always have such. ;)”
- Maxim

“For me it was: Is Your Work an Expression of Your Life? The funny thing is that this blog post was written at exactly the moment when I needed it :) Since that time I believe in "changing work into life" and I'm quite comfortable to work anytime I feel like. It brought me lots of great ideas and makes me very happy.”
- Tomasz

“The most important post for me was The Big List of Agile Practices and for two things: At first it helps me to go deeper into the amazing world of Agile. It helped me for my thesis about Agile practices. In second, with it, I discovered the rest of your blog and then Management 3.0.
- Geoffrey

“I would choose "Why I Won't Take Your Call", because you are talking a little bit out of my own soul since I see it the same as you. Reachability has always been the virtue of the slaves and that's why I have an answering machine acting as a firewall to protect my free time. I even do not have a mobile phone! The other thing I like in your posts is your honest way of writing. This is refreshing in this day and age and it leaves me with a smile.”
- Heiko

“To me the most important blog post was Top 100 Blogs for Developers (Q1 2009). I know it's not a masterpiece in the sense of creativity (being just a collection of data), but to me it was exactly what I needed.”
- Gabriel

And that’s it.

Thanks everyone who participated. It’s great to know some of my work matters to you. Your feedback helps me to look forward to the next 5 years. :-)

When you have determined what your values and purpose are as a team or organization, you have to put your money where your mouth is. Turn your values and purpose into action! Create your own story!

Are you aiming for honesty, excellence, and service? Get the team in a car, drive to a client where something went wrong with your product, and sing a song about how sorry you are while handing over a big bouquet of flowers. Should your work be focused on creativity, discipline, and orderliness? Get your team to make a perfectly executed work of art out of sticky notes, carefully measured out and modeled on the computer. They key is not only to promise to keep these values in mind, but also to do something to prove that these values matter.

At the end of the day, you just ask yourself, ‘How did our vision and values influence decisions I made today?’ If they did not, then they are pretty much BS.

- Peter Senge, The Fifth Discipline

I am preparing the launch of a business called Happy Melly, together with Maarten Volders and Vasco Duarte. As our core values we have defined freedom, transparency, and holism (originally described as system thinking). And our purpose is the pursuit of happiness in work. Do I have a story to express those values? I certainly do!

One month ago I wrote the post Why I Won’t Take Your Call. In that post I explained in an honest and transparent way that I prefer emails over phone calls because I don’t aim for local optimization (of conversations). Instead I take a more holistic long-term view of the job of being a writer, and daily phone calls simply don’t fit the picture. I claim the freedom to place such constraints on my communication with people, not because I’m an autist (though maybe I am), but because I claim a right to happiness as a worker.

I didn’t realize it at the time of writing, but this story perfectly illustrates the values and purpose of our Happy Melly business, at least from my point of view. (And I’m sure Vasco and Maarten can produce similar examples, without the autism bit.)

What are your values?

What’s your story?

Subscribe to my mailing list and be the first to receive future articles!

When you see an organization as a social value network (as I do) then you inevitably come to the conclusion that all stakeholders participate in this network in order to derive value from it. Customers, shareholders, employees, suppliers, banks, communities, business partners, governments, and everyone who is economically involved, try to get some value out of the organization. Or else they would not contribute to that collaborative project that we call a business.

But new value can only be created when that which is already valuable remains intact. When you delight customers while screwing suppliers, you’re not creating value, you’re just moving it from one stakeholder to the other. When you increase productivity while cutting corners in quality, you’re also not creating value, you’re just stealing it from the future. And when you think you create shareholder value by depleting natural resources, you’re again not creating value. You’re just transforming part of an ecosystem into an economy.

True value creation happens when you respect the things that are already valuable to some stakeholders. This means taking into account the values of people, at all levels of the hierarchy, and in all corners of the network.

Rather than viewing organizational processes as ways of extracting more economic value, great companies create frameworks that use societal value and human values as decision-making criteria.

- Rosabeth Moss Kanter,
“How Great Companies Think Differently”

“But”, I hear you think, “What is valuable to stakeholders? Which values should we respect and uphold? Because I want to be a true value creator!” Well, it seems you’re showing signs of curiosity, enthusiasm, and determination. Great! That means you’re already on your way to know the answer.

Subscribe to my mailing list and be the first to receive future articles!

My spouse has a personal trainer who makes him perform all kinds of healthy practices. One week it’s the lateral lift, another week it’s the biceps curl. Yesterday the focus was on the bench press, but tomorrow it could be the knuckle buckle. What’s important here is that it’s never the same thing. In order to become healthy a human body should not get too comfortable performing the same routine. The real value is in continuous adaptation to unanticipated stress.

Nassim Taleb called it antifragile, and described it like this:

Now the crux of complex systems, those with interacting parts, is that they convey information to these component parts through stressors, or thanks to these stressors: your body gets information about the environment not through your logical apparatus, your intelligence and ability to reason, compute, and calculate, but through stress. […] Thanks to variability, small variations make them [complex systems] adapt and change continuously by learning from the environment and being, sort of, continuously under pressure to be fit.

- Nassim Nicholas Taleb, Antifragile

Different words, same idea.

A complex system benefits from not following the same practices over and over again. By adding a little bit of stress, and continuous variability in the environment, the system learns to become fit and healthy.

Here’s another example.

I’ve always said that every child deserves a good dose of bacteria and viruses. This significantly boosts the child’s immune system. Instead, we raise generations of offspring with more sicknesses and allergies, because we’re protecting our children from healthy infections. Again, it’s the same thing. Short-term stress leads to long-term resilience. If you protect their bodies from a little bit of harm, you raise your kids to be quite a bit fragile. Do them a favor, and feed them some dirt. Because you love them.

It’s no different for organizations.

You should grow your teams to be antifragile.

I am in favor of unexpected changes, which is why I am against rigid and defined frameworks. Like Taiichi Ohno, the father of Lean thinking, I am against codification of methods. When you prescribe safe practices you introduce stagnation. It’s a short-term benefit, leading to a long-term danger. A short term protection from harm, culminating in long-term fragility.

Of course, people cannot learn values and principles without practices. We all have to start at the Shu level. But when you present a collection of good practices as a method or framework, you forget about the nature of complex systems. We learn from uncertainty, variability, and surprise. What strengthens your health is not that weekly relaxed lounge in the sauna. It’s the unexpected and dreadful plunge in an ice-cold bath afterwards.

Every regular practice works, until it doesn’t. Are the daily standups losing value? Try daily water cooler talks. Are people getting too comfortable sitting together? Move them around. Are the retrospectives not working? Buy them some drinks at Starbucks. Is a team too dependent on its task board? Hide it in the kitchen. Force people to do Scrum not by the book, and change things unexpectedly without notice. As I wrote before, ScrumButs are the best part of Scrum.

A complex system that gets too comfortable with certain behaviors runs the risk of becoming complacent, stagnant, and fragile.

Let people get used to surprise.

For management practices it is no different. I recently asked participants in a webinar if they thought organizations need a management method or framework. Roughly 67% said “yes”.

I understand people’s need for more concrete management practices, but I am against the definition of a management method. The inevitable result would be a certification program that validates whether people understand and apply the method correctly. And learning would come to a standstill. This would be at odds with complexity science, and incompatible with systems thinking.

I prefer the workout metaphor.

Everyone understands 20 push-ups a day are healthy, but not required. It’s perfectly fine to replace this practice with something else. In fact, as your personal trainer knows, you should! Likewise, you could implement a work expo, until you are tired of it. You can play moving motivators, until people know too well how it works. You should try kudo cards, until they lose their value. And you can’t go wrong organizing exploration days, until you don’t need them anymore.

Do you want your organization to be fit and healthy?

Next week introduce a change that your well-performing team did not expect. Add a new stressor. Feed them some dirt, mixed with a bit of love.

In Management 3.0 classes I let participants play an exercise called Moving Motivators, which uses the CHAMPFROGS model for intrinsic motivation. This model is loosely based on the book The 16 Basic Desires by Steven Reiss.

I simplified Reiss’ model by removing some very basic desires, such as family, romance, and vengeance, which I considered somewhat less desirable within the context of a team. (Though this simplification makes the model less applicable to the crew of Battlestar Galactica, and other teams on TV.)

By renaming a few of the key terms I came up with this list of 10 intrinsic desires…

Curiosity: I have plenty of things to investigate and to think about.

Honor: I feel proud that my personal values are reflected in how I work.

Acceptance: The people around me approve of what I do and who I am.

Mastery: My work challenges my competence but it is still within my abilities.

Power: There’s enough room for me to influence what happens around me.

Freedom: I am independent of others with my work and my responsibilities.

Relatedness: I have good social contacts with the people in my work.

Order: There are enough rules and policies for a stable environment.

Goal: My purpose in life is reflected in the work that I do.

Status: My position is good, and recognized by the people who work with me.

I told many people that I have no idea what champfrogs means. But it’s a nice mnemonic that enables me to remember the 10 intrinsic motivators for team members.

Sometimes people point out to me that there are other models for intrinsic motivation available:

Psychologist Abraham Maslow came up with his famous theory in 1943:

Self-actualization: similar to Curiosity, Mastery, Freedom

Esteem: similar to Honor, Power, Goal, Status

Love/belonging: similar to Relatedness, Acceptance

Safety: similar to Order

Physiological: similar to a few that I deleted.

I simply made a best guess of the correlation with Maslow’s model and Champfrogs, so please don’t interpret my mapping as a law. Also note that scientists have dismissed the hierarchical nature of Maslow’s model as unscientific. Personally, I find the 10 motivators easier to discuss than Maslow’s hierarchy, which is why I prefer the Champfrogs model.

Dr. David Rock, the founder of the NeuroLeadership Institute, came up with this model:

Status: same as in Champfrogs

Certainty: equivalent to Order

Autonomy: equivalent to Freedom

Relatedness: same as in Champfrogs

Fairness: similar to Honor (not sure about this one)

It seems to me that SCARF is simply half of CHAMPFROGS. The motivators that are missing are Curiosity, Acceptance, Mastery, Power, and Goal. Personally I find those too important to ignore, which is why I prefer Champfrogs over Scarf when discussing motivation in a team.

Professor in psychology Edward L. Deci, together with Richard M. Ryan, proposed the following model:

Competence: equivalent to Mastery

Relatedness: same as in Champfrogs

Autonomy: equivalent to Freedom

This model lists even fewer intrinsic motivators for people. I’m sure it is a fine model, but I find it too limited for practical exploration in teams.

Note that Daniel Pink, in his book Drive, popularized Self-Determination Theory and actually changed it to Autonomy, Mastery and Purpose. I am not the only one to point out that Daniel Pink replaced Relatedness with Purpose, but they’re all in the Champfrogs model anyway, so who cares?

Regardless of all the small differences I mentioned above, there's one that is obviously the most important...

CHAMPFROGS has pictures on cards! :-)

If you’re interested in playing with the CHAMPFROGS model, you may want to download the free PDF or order the “official” cards. Your team would not be the first to have a bit of fun with them.

It is clear that the annual bonus system doesn't work. A tremendous amount of research says that it demotivates people, destroys collaboration, and causes dysfunctional behavior among managers and employees.

What also doesn't work is the flat system, where everyone simply gets the same compensation or bonus. This also demotivates most people. And it makes organizations inflexible in times when agility is needed.

What we need is a merits system...

In an agile organization, working in an uncertain environment, I believe workers should have a steady salary that is predictable and slightly conservative. On the other hand, they should also get extras depending on the unpredictable part of the environment. Both salaries and extras should be brutally fair and based on merits, not equality. This has led me to suggest the following practical constraints, for better compensation systems, based on the five problems listed in an earlier post:

1. Salaries should be expected, but bonuses should not.
   Always keep it a surprise. When bonuses become frequent and anticipated, they ought to be converted to regular salaries.
2. Earnings should be based on collaboration, not competition.
   When determining how much people should earn, the main criteria should be their contributions to a common goal, or shared purpose.
3. Peer feedback is the main performance measurement.
   Contributions to a shared purpose are best detected and evaluated by peers, not by managers. Only the whole system knows all details.
4. Use creative thinking to grow the compensation system.
   Expect that people can (and will) game any system, and tap into that creativity by inviting and supporting it, instead of driving it out.
5. Use compensation to nurture their intrinsic motivation.
   Make money a reflection, not a competitor, of people’s curiosity, honor, acceptance, mastery, and all other intrinsic motivators.

Of course, implementing these suggestions for a compensation system is not a trivial thing. But I discovered different ideas that seem to work pretty well for various creative organizations, and which turned out to be quite compatible with each other, and with the science of behavioral economics [Ariely, Predictably Irrational].

The elevator-pitch-version goes like this…

1. You start by setting up a virtual currency, such as credits, points, or hugs. And every month every employee gets an equal share of the virtual currency.
2. Employees are then required to give all their credits to co-workers. They can use any criteria they want, as long as they don't keep any credits themselves.
3. Employees accumulate earned credits (received from co-workers). At random moments they can exchange credits for real money, using an exchange rate.

This is a payment system based on merits. It satisfies all criteria for fair compensation:

• Big bonuses cannot be anticipated.
• Peer feedback is the main performance measurement.
• Earnings are based on collaboration, not individual performance.
• Creative thinking is used to game and tweak the system.
• The earnings reflect purpose, mastery, status, etc…

Money and emotions are tricky things and therefore any system that involves both will have to be set up in a way that is safe to fail. With small increments (such as weekly or monthly experiments instead of quarterly or annual outcomes) the feedback cycle is shorter and people will learn faster how to improve the system. The use of valueless virtual currency instead of real money will allow people to experiment more comfortably, and it will be easier for them to decide that a chosen path is not working, and change direction, or start from scratch. We must also realize that creative people will game the system. But this creativity can be exploited to grow a more resilient system. The short iterations and valueless currency should help people to adapt to each other’s strategies, and management can tweak the constraints, all in favor of collaboration and working towards a common purpose.

If you are interested, I have a 20-page article about Merit Money available for download.

Subscribe to my mailing list and be the first to receive future articles!

Some people argue that organizations should get rid of their bonus systems. They say most of an organization’s performance is in the system, not in the people, and therefore it’s best not to differentiate between employees. Everyone should get the same bonus. However, by the same reasoning it then also follows that everyone should be getting the same monthly salary. After all, how can you measure that the CEO works any harder than the receptionist?

I believe a flat compensation system doesn’t address the challenge of paying employees what they really earned. First of all, there is the problem that roughly 80% of all people think they perform better than average [Haidt, The Happiness Hypothesis p.67], and thus, when everyone gets the same as everyone else, 80% of the workers will feel underpaid. (It won’t be true, but you can’t argue with feelings without real data.)

Second, while bad fortune in business is usually absorbed with conservative salaries and incidental layoffs, good fortune should likewise be enjoyed with extra payouts and by hiring new people. When you don’t pay any extras to workers, the workers share the burden of setbacks, while only the business owners reap the benefits of success. This is probably not motivating to most people. (It has certainly never motivated me.)

Last but not least, organizations should try to benefit from unpredictable events in their business environments. They should be antifragile [Taleb, Antifragile l.1672], which means they must get used to dealing with fluctuating revenue streams. And employees should be managed to deal with flexible income. Those who insist that income must be constant automatically guarantee that their organizations will be fragile. (And they will earn a constant income of zero after failure.)

In other words, the flat system is a bad alternative to the bonus system. Can we do better?

Subscribe to my mailing list and be the first to receive future articles!

A practice that has infiltrated the western business world like a pestilence in a shanty town is the annual bonus system. The idea of this practice is that managers give workers targets, and calculate annual bonuses which usually depend on people’s performance ratings, job position, salary, overtime, age, shoe size, and a host of other variables. The common rationale behind the bonus system is to incentivize performance. But actually, it stinks.

Decades of research has confirmed, again and again, that bonus systems rarely have a positive effect on people’s performance when they are involved in creative knowledge work [Pink, Drive] [Kohn, Punished By Rewards]. On the contrary, the effect is just as likely to be negative [Fleming, “The Bonus Myth”] [Spolsky, “Incentive Pay Considered Harmful”]. There is so much wrong with traditional incentive programs, it is impossible to list all their problems. But I feel incentivized to give you the most important ones here:

1. People get addicted to regular rewards, and if they don’t get their anticipated reward, they will feel disappointed or punished. This ultimately destroys motivation and thus performance. [Kohn] [Pink]
2. Individual rewards disrupt collaboration, which is crucial in creative knowledge work. It stimulates competition and cheating, which destroys relationships between workers, and also between workers and their managers. [Kohn] [Fleming] [Pink]
3. Traditional bonus systems rely on objective measures, but reality is far too complex to capture in numbers. The metrics ignore the soft side of great performance, including teamwork and collaboration. [Kohn] [Spolsky].
4. Research shows that rewards distract people from complex work, disrupt creative thinking, and increase people’s stress levels. This causes them to play safe and prefer easy tasks, while innovation requires the opposite: taking risks and doing complex tasks. [Kohn] [Fleming] [Pink].
5. The research also shows that bonuses undermine intrinsic motivation and altruism. As soon as rewards are handed out people start to think, “They pay me extra for this work thus it cannot be fun, interesting, or good.” [Kohn] [Fleming] [Pink]

It should also be noted that bonus systems are usually based on company profits. But most workers cannot directly relate their work to their company’s profits, because most of what influences profits is beyond their own control [Bomann, “Bonus Schemes Should Be Handled with Care”].

Subscribe to my mailing list and be the first to receive future articles!