The WorldBlu Blog

Just over a week ago we had our second WorldBlu Council meeting, a mastermind group for the CEOs of organizations on the WorldBlu List of Most Democratic Workplaces. Our first Council was in November at Continuum and this Council was held at the democratic company Linden Lab (makers of Second Life.) The day and a half Council was fantastic and full of lessons and best practices that I want to share with you here.

The Council format has two main components. First is the opportunity for the CEOs to share some of their “best practices” in organizational democracy.

The second major component is a peer assist in which the CEOs have he opportunity to talk through any challenges they made be having. The Council participants work through the challenge together sharing democratic best practices they’ve developed in their own organizations. What makes it really interesting is that it’s a diversity of industries but everyone shares the same commitment to running their organizations democratically, which makes for a very unique experience.

It was so fulfilling for me to see each one of the CEOs have a major ah-ha! moment as we helped them work through any challenges and move to the next level of democratic performance.

Although the Council meeting is largely confidential, it is possible for me to share some of the major points that came out of our time together as well as some of their best practices, which hopefully you can apply to your organization.

First off, some lessons learned, courtesy of CEOs of some of the most democratic workplaces in the world:

1. The more complex the product or service your company is developing the more democratic the process should be.

2. Accountability — where everyone knows what he or she is responsible for and what everyone else is responsible for as well — is the best antidote to the entitlement mentality that plagues many companies.

3. Freedom takes discipline. It expects the best of each one of us.

4. Being democratic isn’t always easy. We’re all still learning and sometimes it can be really, really hard.

5. Sometimes even democratic leaders throw a fit. But just know that if they do, they feel really bad about it. ☺

6. Being a democratic leader is all about tough love. Command and control or authoritarian leadership is easy. Democratic leadership – which requires heart and backbone — isn’t for the weak.

7. Running a company democratically is about changing people’s lives – as well as the world – for the better.

8. Try to take personality out of the equation. Develop robust democratic systems and processes based on principles, not personality.

9. The role of a CEO in a democratic company is to see the big picture, rally people around that vision, and make sure they have the tools they need to get it done. A democratic CEO must be an evangelist.

10. It’s all about positive peer pressure rather than creating a police state. Transparency creates the positive peer pressure on everyone.

11. Every company should have a VP of Transparency.

12. Democracy isn’t just great internally; it’s a great way to engage your customers and build brand loyalty too.

13. As long as people feel like there’s open communication, they don’t feel like they have have a ton of meetings.

14. When hiring for a democratic company, you have to look for people who can recover quickly. When the spotlight of transparency is always on — no matter your ups and downs – you have to be able to recover quickly and with grace. Not everyone can handle that, so chose your team wisely.

15. There are trade-offs to running a company democratically. You’re going to get noise, passion and confusion at times. The result, however, is more innovation, less turnover, a high quality product, etc. It’s worth the trade-offs.

In addition to the words of wisdom and lesson learned above, I thought it might be helpful to share some of the best practices in organizational democracy shared at the meeting as well.

Since our meeting was at Linden Lab, which has around 250 employees, I thought I’d share some of their best practices with you first:

The Love Machine
Linden Lab has a very cool tool called the Love Machine which is an internal website where anyone can send an 80-character “love note” to anyone else in the company when they see them doing a great job at something. All love notes are transparently shared on an internal site, also making it a great performance review tool and a great way to get a quick take on how things are going company-wide. At the end of each quarter everyone gets a pink envelope with $1 for every love note they got.

Open Reviews Shared on a Wiki
Picture a Wikipedia-like website which has each person’s performance reviews posted transparently for everyone else to see. Yup, that’s what they do at Linden Lab.

The Tao of Linden
These are Linden Lab’s seven guiding principles they call “The Tao of Linden.” My favorites are “No Politics” and “Choose Your Work.” At Linden Lab you can be fired for advancing your own agenda at the determent of others. How’s that for taking the ego out of the workplace?! I was told they have let people go for this reason.

The Choose Your Own work principles allows Linden Lab to function more like an open marketplace where people can think of themselves like independent contractors picking the jobs they want to do. It’s a highly very effective system which Tom Malone also talks about in his book, The Future of Work.

CEO Review
Each quarter, Linden Lab’s visionary CEO, Philip Rosedale, sends out a review on himself for everyone to answer. He asks just two questions:

1. In a forced choice, do you want to keep me or throw me out?
2. Am I getting better or worse at my job and why?

Also, he asked everyone to develop a metric where if his overall performance score dips below that point he’s out as CEO. All the feedback (except for the “why” part of the question in order to allow people to speak candidly) is transparent and shared in his performance-page wiki. Who says you can’t vote for your CEO?!

Other Best Practices of Democratic Companies as shared at the WorldBlu Council Meeting:

Open-Book Management
Data empowers people to make smart decisions as long as they know how to make sense of it all. All democratic companies share this common best practice called open-book management.

The 10-Word Rule
This is a simple best practice started at Great Harvest Bread Company about three years ago. It works like this: Everyone knows that in business you sometimes have to have tough conversations. So at GHB, if you’re in a conversation with someone and they’re about 10 words away form totally pissing you off, you call, “10-Word Rule!” The idea is that we all have our hot points and if you have a tool to say when your approaching yours it keeps people from shutting down completely or getting irrevocable mad. Since they started this practice, their CEO, Mike Ferretti, says that everyone has become much more tolerate and understating of each other.

Have an “Equal Onus” Culture
The idea here is that there’s an equal onus on everyone – not just top leaders, to make the company thrive and perform.

“Rumor Talk”
This is where people can post on a board the rumors they hear about the company and then on a regular basis people get together to talk about the rumors to clear up any misconceptions. Since rumors are one of the biggest time and energy wasters in a company, I really like this practice. The key is to keep the conversation light while still addressing the issues.

What Questions Should the CEO Answer?
One of the CEOs in the council meeting said that one of his policies is that he ONLY answers questions that his team can’t answer for themselves. In other words, he wants to empower people to come up with solutions themselves and he wants to know that they’ve thoroughly thought through the issues before thy come to him.

Key Questions to Ask in a Daily Huddle
Many of the CEOs had daily “huddles” of some sort with their organizations. One CEO shared that there are two questions he asks in the huddle:

1. Is everything under control – Yes or No?
2. If not, what do you plan to do about it and what are your roadblocks?

(Thanks to Mark Dowds, CEO of BrainPark and WorldBlu Advisory Group member for the last four abovementioned best practices. ☺)

So that’s a bit of the inside scoop from the WorldBlu Council meeting in SF. Get your company on the WorldBlu List and you too can hang with us. We’d love to have you!