Teal Organization: Creating a Company Operating System

How We're Creating a Company Operating System at Circles

Usually when I think of an operating system, it’s in the context of my Macbook telling me I need to install the newest update, and me ignoring that reminder, once again. 

So when Dan, founder of Circles, and I were talking about the need to create a company operating system for the organization - to transition to a Teal Organization, it took me a little while to wrap my head around what that might mean. 

If the operating system of a computer is the backbone that makes it run smoothly, what is the operating system of a company? It matters, because the operating system is the set of norms, values, processes, and behaviors the company agrees to run on together. A strong one leads to cohesion and moving quickly. A weak one leads to finger pointing, confusion, and slowed growth.

Article Contents

How We're Creating a Company Operating System at Circles

Article Contents

What is a Teal Organization

Applying the Teal Organization Principles

Examples of Teal principles:

Teal principles we adopted:

Getting Feedback from the Circles Team

“Learn & Grow”: finding ways to work across continents, efficiently

To summarize, here’s the process we’re following:

Resources and Citations

What is a Teal Organization?

We started out by reviewing the work of other companies and thinkers we admire. We were inspired by the work of Frederic Laloux and the guide to self-management he lays out in Reinventing Organizations, a primer on the principles and approaches of how to run a company without the traditional hierarchy of top-down authority many of us are used toin the Reinventing Organizations shorthand, this is called a “teal organization”.

NB: If you’ve not read the book, watch this video on Laloux delivering a talk on the research that went into the book [1hr 42mins] and/or download the PDF summary here

Companies around the world leverage facets of teal, from giants like Zappos and Patagonia to a home nursing company in the Netherlands and a French metal foundry.

Applying the Teal Organization Principles

We decided to embrace some of the teal organization principles, many of which center around the guiding value of allowing the organization to evolve, and the people within it to make decisions for themselves without waiting for someone above to dictate the path or the answers. So, we knew we wanted the operating system to be made for the organization by the people within it—not handed down from above.

Examples of Teal principles:

A) Evolutionary Purpose: The organization has its own independent purpose / reason for existing that is beyond the needs/wants of the individuals involved.

B) Self-management: Instead of hierarchical boss-employee relationships, individuals are expected to make and keep commitments to the team(s) they are a part of.

C) The Advice Process: When a team member needs to make a decision, she solicits input from the impacted parties and topical experts, then makes the decision taking the advice into consideration.

D) Flexible Work Hours: Team members are trusted to get their work done and are not expected to adhere to a strict schedule.

E) Clearly Defined Values: The organization has a value system that is reflected and honored by all team members.

Teal principles we adopted:

1) Flexible Work Hours: For the purpose of coordinating meetings, team members keep 10am-1pm open as “office hours,” but are not expected to be glued to their desks at any other times, or during those times if no meetings are scheduled.

2) Organization Values: After a ton of amazing discussion, we have arrived at two values: Learn and Grow.

3) Self-Management: Circles doesn’t have formal manager-direct report relationships. That doesn’t mean there are no leaders, but there are not “bosses.”

4) The Advice Process: We have experimented with this and used it at times, but we would like to continue to expand its use and call it out clearly when we are using it.

Getting Feedback from the Circles Team

To achieve this our goal of creating an operating system that serves everyone working at Circles, Dan had the idea of running a series of company debates, another idea that I hadn’t seen before in my previous orange (more Reinventing Organizations language!), authority-based settings.

“Orange organizations represent the advance of the scientific and industrial revolutions. The world is seen as a complex machine whose inner workings and natural laws can be investigated and understood.”

- Frederic Laloux

The idea was that if we could truly hear the perspectives of the individuals in the organization, a solution that reflected the true needs of the organization would reveal itself. As a group of about 10 team members at a company that had just formally incorporated, it felt like the right moment and a manageable group size to try the exercise.

We started with the debates, taking on topics like goal setting and remote work norms. I facilitated, and while interesting, at first our discussions trended more towards me presenting a way of thinking, based on my experiences as a coach and a startup executive as well as outside content and expertise, and the team reacting. This isn't bad, per se, but it doesn't quite embody the spirit of what we were looking for--a truly co-created operating system that draws not only from our pattern recognition and learned information but from our shared experiences as well.

So, we changed tactics and, elegantly, we were able to use a framework built right into the organization itself: our Circles meeting format. At Circles, we bring people together for deep conversations in bi-weekly online meetings. The format for the meat of a standard meeting is consistent:

  • Each participant presents a challenge

  • A facilitator (a role that rotates for each meeting) selects one of the challenges to explore in more depth

  • The learner whose challenge is selected provides more context

  • The other learners have defined time windows for questions and storytelling

  • Anyone can ask a question to get to the heart of the challenge

  • Then each other learner tells a story that relates--and specifically does not give advice

We leveraged this approach to co-create the O/S, with some twists. In the context of creating the company O/S, we also allowed direct reactions, because there is more of a focus on getting to clarity than in our normal circles, in which we’re not attempting to arrive at a decision, but rather to invite deep conversation.

After I solicited time boxed feedback during a meeting, I also allowed time for commenting in a shared document or on Slack, and then came back with a recommendation to the group. If at that point there was a lot of dissent, we would repeat the process, but often, the direction was relatively clear.

After using this approach for several weeks, we found that we had made progress, but we felt like we could do better. First, the process felt too open-ended. Rather than establishing a new set of practices, we often had a bunch of good suggestions, but not a clear path forward. Second, it felt rushed. Thirty minutes once a week wasn’t enough. And finally, it felt driven off of facilitator suggestions rather than team collaboration.

So, with these areas of improvement in mind, we decided to move to the Holacracy Governance Meeting approach, a process that focuses on integrating multiple perspectives, and extend the meetings to 60 minutes. This approach allows anyone to bring forth a tension, and then the facilitator leads the team in a formal process to get to a way forward that may not address all the open issues but addresses any true objections. So far, we’re finding that this practice has promise for helping us get to actionable O/S decisions quickly, and it allows us to revisit them any time there are tensions.

“Learn & Grow”: finding ways to work across continents, efficiently

So far, we have used this approach for topics as core as our values--which we’ve defined as simply as “learn and grow”--to things as procedural as how to organize our meetings.

As a distributed company, figuring out ways to work together across geographies was a key component, so we started there. This was a great example of the power of leaning on examples from books like Jason Fried’s Remote and companies like Wordpress, which has thrived on its model of 100% employee distribution..  

Other topics we’re tackling are largely drawn from a comprehensive list of O/S needs that is on this immensely helpful Wiki for self-managed companies. We’ve also tackled progress and performance management looking at the Art of the OKR, meeting norms (How many? How often? What happens during them?), and evolutionary purpose, as defined in Reinventing Organizations.

“We don’t own or run the organization; instead we are stewards, listening to where it needs to go and helping it to do its work in the world..”

- Frederic Laloux

To summarize, here’s the process we’re following:

  1. Identify areas of O/S that need to be defined

  2. Collect examples of how to approach each area through interviews, books, articles, and personal experience

  3. Present proposals to the team for feedback

  4. Synthesize team feedback and finalize approach with feedback taken into account

  5. Bring final proposal to team for any remaining red flags

  6. Put into action and monitor

Along the spectrum from philosophical to seemingly banal, we’ve seen interesting things come out when people simply have something to react to, and the space to react. We’re just getting started with the “how” of this process. It’s exciting and fun, but will take lots of time, and in a way, it will never be truly done: as with  a computer, if you don’t install updates frequently, things start to run less smoothly. For now, though, we are getting going, and enjoying the ride.

Circles Distributed Work Norms

Another key factor in the company’s operating system is how we work together from different parts of the globe. In a regular Circles team meeting, it’s typical to have attendees join from different locations. Each person joins from his or her own office, often at home, in locations that range from Barcelona to Brooklyn, Miami to Manhattan, Amsterdam to Albany (yes, these are all real examples). Our team members, like our learners, are all over the world, working within different time zones and cultural frameworks themselves.

When we were first building the company, having a distributed team meant we could tap into people with shared values and incredible talents, and widen the pool worldwide, not just based on proximity. But this setup isn’t without its challenges. And to make it work properly, we needed to define ways to interact with each other and our stakeholders that are both sustainable and clear—the framework that would end up becoming our Distributed Work Norms.

To establish these, we followed our Operating System creation process and researched what others have established, and here’s where we’ve landed so far.

  • Connect meaningfully: Meet in our Circles video room for meetings of 9 or fewer.

Context: The Circles video room is a platform we’ve built out to host our meetings. It has functionality that lets you assign random order to all the participants, play music, chat in a chat area, display and edit a meeting agenda, put one person in the center, and set a timer. But, you can’t have more than 9 people in the room effectively.

Why it matters to us: Seeing each other face to face is important, and even though we aren’t in the same location, meeting in the Circles room allows for genuine connection, hearing each other’s laughs and reading each other’s tones. When an organization is moving as quickly as this one is, there’s lots of room for misinterpretation. Speaking face to face, on a platform we all know and love, controls for this as much as possible. When we can’t use the Circles room (for instance, when on mobile devices), phone is the next best thing. But perhaps most importantly, this approach lets us continually test and use our own platform and experience firsthand what features we want to add in the future.

  • Choose communication channels with intention: We use Slack vs. email for day to day communications. Text for time sensitive issues, call for urgent ones; talk on the phone when you can rather than texting.

Context: Circles does very little over email; there are no team announcements over email, and we rarely ask for input on issues over email unless external stakeholders are involved. We do have phone call meetings for non-urgent issues, but generally it will be prefaced with a “hey, can I give you a call?”

Why it matters to us: Slack allows us to keep track of discussions and threads, to categorize our chats, to pin important items. Plus, it lets us see who is available when, which comes in handy given that we’re in different time zones. We’ve all had the feeling of being buried under a mountain of email. At Circles, so far, we’ve avoided this. And it doesn’t get replaced by a mountain of Slack messages, somehow. It works!

  • Be Flexible: The ONLY required office hours are 10-1 EST, three days a week. During these hours, team members are expected to be available for meetings, but not necessarily tied to their laptops.

Context: During these hours, we schedule our meetings, but if there’s nothing scheduled, it’s okay to be doing something else. This is particularly important for our team members in Europe, for example, where they may not be online at 7:30 pm unless needed explicitly.

Why it matters to us: Circles team members work really hard at being amazing at our jobs, as well as at being amazing at all the things we do outside of our jobs. Flexibility in scheduling helps us show up fully for everything we do, whether it’s watching our kids play sports, taking our dogs to the vet, or traveling to the airport for our next trip. “I love that my work day and family day can blend to my wishes,” said one team member. Another put an even finer point on it: “I love being able to do drop off and pick up at school.”

  • Come together!: We meet 6 times a year in varying locations, from Barcelona to New York. When we meet, we make time for real connection, feedback, and genuine fun.

Context: We saw that other organizations we respected with distributed workforces, e.g. Automattic, focused on the value of in-person meetups, so we wanted to build them in. And in fact, this is a pretty consistent theme across remote companies everywhere. So far, we have had an incredible meetup in Barcelona, where two of our team members live. The next one is coming soon!

Why it matters to us: Although we love connecting in our Circles room, there’s nothing like the authenticity and trust you get when meeting face to face. Plus, we get to know each other as people in a different way through just having time to hang out. And finally, face to face is the best format to discuss our hardest problems; the things that are most complicated and nuanced as well as the things that are the most sensitive and incendiary.

Meeting 6 times a year means we have an opportunity every two months to tackle these.

  • The missing piece: It feels like one piece is still missing, and this came up when we were talking about sharing this philosophy more broadly.

We still don’t have a great way of mimicking the organic whiteboarding, brainstorming, and collaboration that take place in a co-located office setting. One team member summed it up: “What is hard is not to be able to have the water cooler conversations, the small talk, the beer after work, where a lot of valuable ideas find their seeds. To not be able to pull up a whiteboard and start drawing ideas togethers is really frustrating. So much harder, for now, to map out ideas and get structure while being on a screen.” We’re looking for ideas on how to address this, and hopefully in the future, we’ll have a norm that makes distributed brainstorming a real possibility.

While this is a work in progress, it’s been a fun and gratifying to experiment with what it’s like to eat our own dog food and find ways to connect truly over a remote platform. One of our team members put it best: “A distributed team is a vote of confidence in me as  professional, and evidence that we're invited to bring our whole selves to work, without our masks.”

If you’re considering creating a company operating system and would like to chat more, feel free to email me at anna@circl.es.

Resources and Citations

Reinventing Organizations Wiki http://www.reinventingorganizationswiki.com/Main_Page

Jason Fried’s Remote https://37signals.com/remote

#teal #organizations #purpose

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