Community Style Business – Leadership

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A genuine leader is not a searcher for consensus but a molder of consensus.

Martin Luther King Jr.

When looking at a CSB, it is important to grasp the concept of not only what leadership is, but why it occurs. Leadership comes in various aspects in a business. These include: product / organizational vision, practice area, cultural, team and quality. Depending on the organizational model, these leadership roles can be distributed countless ways.

Currently, organizational leadership is put on a pedestal. Leaders are those with both the information and the power, with long term success relying on a few chosen to make the right decisions. These individuals get rewarded for their efforts, which tend to be well beyond those typically performed by contributors.

The problem here, ultimately, is that people come with different talents, strengths and weaknesses. We all approach problems differently, and leverage different types of crutches to minimize our weaknesses. Given this, we create positions with fairly ridged ideas around roles and responsibilities, rather than creating a system which leverages people’s unique strengths, while not forcing them into make or break situations around their weaknesses.

The cultural change which needs to be made here is that CSB is run more like an organic ecosystem rather than a rigid structure. In essence, each skill set and partition in a CSB is responsible to self organize and adapt to their own unique environment independently. Through communication and sharing of success and failures, these independent pieces enable each other in the larger organization to improve independently, without changes being forced on the teams. This viewpoint changes what type of leadership is needed.

Leadership is a means to an end, and is not the sole objective for any one member. There is no ordained leadership position which is a given. Those who choose to lead can provide leadership across the board, or in a specific area they’re adept at. These leaders then help improve their part of the organizational ecosystem through influencing consensus, both on their team and by working with others.

An example on how this can apply is by taking a look at a hamburger restaurant, specifically the cooks team & their schedule. Staffing a restaurant cooks team includes ensuring enough members are on hand at any given point in time to fulfill the orders received in a timely manner. In this case providing leadership might be as easy as creating a draft board for hours having to be worked, and challenging working with others to make sure all the shifts are covered. Since everyone has a personal stake in the success of the business, it is everyone’s responsibility to make sure the area is staffed. It is the leaders job to help the members achieve the schedule creation.

Rewarding leadership

So what is the reward for providing leadership? Why would anyone do it? This is the question I struggled with. In the ideal world the leaders would lead because that’s what they enjoy doing. In the real world leadership can be time consuming, and offers challenges of its own. So how do we reward leaders for their efforts?

In the above example the leader might get first draft choice, where the compensation is a better schedule. Alternatively the leader could be compensated based on the schedules timely completion, and more points are rewarded for each active participant who contributes to helping create the schedule.

The best initial solution available is to reward through lead measures (or tasks which when occurred lead to effective results. This makes it possible to ensure rewards can be obtained, but still ensure that those who gain more efficiency in these tasks to be compensated accordingly, sticking with the montra, you get out only what’s perporsional to what is put in.

A new type of leadership

The team or CSB will there for tend to have more micro focused areas of leadership. Rather than having formal structures which have specific roles and responsibilities, leadership is a set of goals, which the community identifies as being valueble. The team can then either elect their leaders, or approach it via lasefair, where people can pick up what they choose. In both cases those who want to lead can pick and choose what goals best match their unique talents and skillsets. Since there’s no strict position which is gained or lost, people are allowed to find those aspects and ways they can best lead, without taking on too much, or being put in a position where loss obversion can effect decision making and direction.

With this approach determoning leadership, or baring poor leaders, has to be left up to the community members. In this way the leader is a servent of the community, only serving as such if the community approves.

This differs from hierarchical leadership where a single decision can span across various loosely related groups, and peer leadership where through organic independent adoption change is brought about.

Community Style Business – An introduction

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I first started asking the question two years ago.

How do I work in an environment where all my contributions are valued?

The problem I faced at the time was that I was working for a professional services software company and had just secured a multi-million dollar contract. After working with the customer and rebuilding ties I had my review, where I was given a small increase in pay, and no promotion, even though I was being billed as multiple titles above my current pay grade.

At first I thought it would be enough to step up in the corporate ladder. That’s when it was driven home to me about how much of “middle” management was corporate politics and posturing. That was definitely not what I enjoy.

I then tried both joining a couple of startups as well as creating a business of my own. It was surprising to me how different organizations varied, both in skill sets as well as personal philosophies. But there was an underlying trend of scarcity and in some cases wild financial bets where one wrong step would mean I would lose my house and my finances would be shot.

The one good thing during that whole duration was that I was continually studying. Business, people management and even psychology books became part of my daily routine. Eventually I started working out what I really was looking for in a workplace environment, and titled it Community Style Business.

What is CSB (Community Style Business)

The simplest definition of CSB is:

A group of individuals working together as peers to create value, with the rewards of that value distributed to the community members based on the extent of the individual’s contributions.

This style of business borrows heavily from the organizational structure of agile, in which the members executing define how work gets done, and the inception members (product owners and researchers) work to identify what customers value and how much.

I personally come from a software background, and so the following will be heavily focused on the definition as it pertains to software, but that doesn’t mean a variation can’t be applied to other domains.

Distribution of rewards

Members of this system are rewarded based off of efficiency and completion of work. These pieces of work are given point values based off of risk, complexity and effort in relation to what it would take a competent individual skilled in the craft. This value is then voted on by the community of individuals on the team, much like agile’s planning poker.

Once a unit of work is finished, it is reviewed by the team and at least one member of the inception team. If the work is approved then the points associated with the work are rewarded to the individuals who worked on it.

It is generally considered a good practice to define lead measures as part of a unit of work. Lead measures are measurable behaviors which when done tend to ensure high quality results.

As the product is purchased, and value is transformed, all non-contributor based expenses are paid first. Items such as rented servers, or the power bill and Internet, at face value. After that any community agreed finances are taken care of, such as putting together a rainy day fund. Finally the remaining is distributed based on the percentage of points an individual has as part of the whole.

Leadership

This is one of the main differences from this style of organization to others. The way leadership works in this style is through evangelizing ideas, and gaining community buy in, although depending on the size this could be as simple as convincing a team to consolidate around the idea.

Often times this will come from the inception team, but any member of the community has the ability to become part of inception, even stepping outside of their current role to do so, although it’s important to note that they shouldn’t do it in a way which will cause their current team to fail on the current iteration.

A fundamental principle here is that an idea or vision by itself is worthless, and shouldn’t be directly rewarded. The true value of the idea comes through the researching, flushing out and implementation of the idea. Usually this means many people are involved, from the high level vision all the way down to the details. To that extent those who want to lead with vision become part of an inception team, and are given the opportunity to gain support from others.

People management

Since value is created by each person which should be directly relational to that created, there isn’t a need for the typical oversight of individuals. A member who doesn’t want to work that much will be rewarded with little, and the more workers creating value leads to more value created. If there is limited value which can be obtained, more value created leads to a faster realization of that value, allowing the team to move more rapidly towards more valuable goals.

Those who do not feel they receive enough value for their lifestyle will tend to leave a group on their own. These individuals are often referred to as dead weight in other organizations. In this regard reviews, performance management and classic hiring/firing practices do not apply to the CSB. If a member is not performing enough value, others can be added without detracting from the community.

Pay scale and peer to peer pay comparisons also becomes a moot point in the CSB. Since the system rewards based purely on value contributed, individuals can achieve any pay amount they’re capable of, either through efficiency, talent or brute effort.

Individual responsibilities

In the community model the individual is given a lot of leeway as to how they want to work. The only requirement of this model is that individuals are required to self educate and take part in community obligations. It is up to the community to decide what these obligations are. Examples of items which should be discussed are: insurance, time off, office space, etc.

Individual Community Obligations

A good rule of thumb should be that obligations directly benefit all members of the community equally, if that’s not the case then it’s a good idea to ask if that’s an individual’s responsibility.

An example might be offices of different sizes. If one individual prefers a larger office to himself but others double up on office space then the office space doesn’t directly benefit whole community. In this case, it might be a good idea to allow individuals determine how much of their own distributions they’re willing to give for their working environment. This would allow those that need larger offices the ability to get them, but does not create a pecking order as there is no downside for those who it doesn’t directly benefit.

Self education

In this style of business it is up to the individual to stay informed in order to create the most value possible. This can be done through self education, team discussions, and a suggested high level cross training which gives the individual a concept of other areas of responsibilities and research which is ongoing.

This high level training of research and concepts will allow the community to better understand how to help each other out. Due to this nature there should be an increase in the volume of applicable value across the community.

Community iterations

When I was a manager one of my direct reports told me something to the effect of, “In agile you should be okay if we fail”. While this can sound bad, what he was trying to imply was that in an environment where the group is expected to self improve, harsh accountability regardless of the circumstance will drive away the willingness to try new things.

In the community model, mistakes are expected to happen, people aren’t perfect. The community should pick durations by which it can review and change the way it functions, even trying out new ideas to see if they will work. This iterative process allows for course correction as the community evolves and the business evolves or individuals in the community’s priorities change.