by Pete Oliver-Krueger
(This was originally written as an open response to Holacracy.org, to fill in some gaps I've experienced.)
#1: There are 3 types of value: (Quality of) Life, Liberty (in Choice), and the Pursuit of Happiness
#2: Create more overall value than the monetary value you receive
#3: Maximize value for all stakeholders according to Maslow's Hierarchy of Needs aiming to satisfying each level for all employees of the organization
(As with Conscious Capitalism, stakeholders include stock holders, plus employees, families, customers, suppliers, and the community.)
Revolutionary Metrics share the same core categories with Pirate Metrics, namely Awareness, Activation, Retention, Referral, and Revenue (e.g. AARRR!). Pirate Metrics, however, have a flaw in that they are based off of the sales funnel, and only most-accurately measure a drive towards revenue.
Revolutionary Metrics aspire to the higher ideals of Life, Liberty, and the Pursuit of Happiness. They recognize that revenue is one pillar holding up Maslow's Hierarchy of Needs rather than the destination. Revolutionary Metrics ask, "How does our project impact our stakeholder's quality of life, their freedom (liberty) of choice, or their pursuit of happiness?"
Revolutionary Metrics also employ the measurement of degrees of separation. For example, increasing revenues or decreasing costs is good, if an only if it benefits stakeholders. An increase in revenue that goes straight to the pockets of the sales staff only, or into the golden parachute of a top executive, with no impact of the quality of life, freedom, or happiness of the rest of the company, would in reality drive Revolutionary Performance numbers down.
At best, all Pirate Metrics are one degree of separation away from Revolutionary Performance. More likely, increased revenue is usually 2 or 3 degrees of separation away from a true positive impact, and how far away a metric is from overall company health is what's important. Revenue wasted is of little value, nor are wasted awareness, activations, referrals, and retention.
The true goal, for example, is revenue that goes towards the implementation of a day care program that helps several vital engineers remain a part of the workforce after they have a child, thereby ensuring increased product quality. In this example, the increased revenue has a 2nd degree impact on the Life and Happiness of employee stakeholders, and a 4th degree impact on the quality of the product, leading to customer happiness, an easier sales cycle, and even more revenues.
~Roles, not Jobs~Employees are often underutilized having been hired for for a single job, irrespective of their other skills. Opportunities for advancement and practice can be created by seeing people as their whole resume. On one project they may be a developer, a project manager for another, and apprenticing as a junior account manager for a third. Once we see each other for our entire resumes instead of current job, the untapped potential can now be revolutionary.
~People Advocates, the Corporate Psychologists~Instead of giving personnel authority to managers who are promoted based on job task performance, in Revolutionary Performance the tasks of managing people - promotions, job performance, and culture - are done by those with proven Psychology experience. They act as people advocates, guide career growth, and resolve disputes. To do their job most-effectively, all (non-impromptu) meetings should include a trained People Advocate where feasible.
NOTE: People Advocate is also a role (not a job description). A manager or lower-level employee can act as a trained People Advocate if they have the necessary psychology training. However, People Advocates should not preside over meetings if they also have a project role.
~Distributed Authority~The creation of People Advocates, however, should not diminish the importance of experience. The roles of Lead and Manager are still vital to operations and should be assigned to the appropriate people. Managers in the context of RP, though, are subject matter experts and responsible for subject matter decisions only.
For example, a Manager may be responsible for go/no-go decisions for a product line, or for choosing technology. The People Advocate, by contrast, determines who deserves a promotion (with Manager input) or a raise, and who deserves to be fired (or transitioned to a different team or department).
In cases of conflict, where an employee feels marginalized or the subject of jealousy by a Manager. It is up to the People Advocate to use their psychology training to resolve the dispute in everyone's best interests. In a traditional organization the power is imbalanced, allowing the Manager to fire a vital employee by controlling the narrative around that employee's performance. In the RP organization, the People Advocate evaluates and knows the value to the organization of each side of the conflict and can make a decision that is the most equitable for all stakeholders.
~Catalog of Experiments & Results~As we have learned from Lean Startup, every new initiative is a hypothesis in the beginning. Its value is determined by its effects on one or more of the Pirate Metrics for the company. A hypothesis can become standard practice if positive results can be repeated multiple times in multiple contexts.
To that end, each project should begin with a targeted effect on one or more company metrics. The steps involved should also be documented, along with the actual changes in the numbers over the span of the project. This allows other teams to try to in/validate successes in their own departments, and make modifications as necessary. Lastly, the Experiment Catalog also allows managers to see when a standard practice has suffered a dip in its positive outcomes.
~Pirate Performance Reviews~Employee career progress, salaries, and compensation should also be based on concrete numbers. In a traditional organization, an employee might choose to learn a new technology or work on a project in order to meet a goal outlined in their annual performance review. Too often, however, these activities have no impact on the daily business and tend to get ignored, or operate in a vacuum.
Revoutionary Performance Reviews set out to determine which growth tasks for an employee will have a beneficial impact on the organization as a whole. Similar to project metrics, they measure 5 categories of impact on Life, Liberty, and Happiness: Awareness, Activation, Retention, Referral, and Revenue. The employee and their People Advocate seek out areas in the company that can be helped by the employee's unique strengths and design a program for changing one or more metrics, including an estimate of how much the metric might change.
Employees are then allocated a certain amount of time each week to work on their goals, e.g. 5%, 10%, or 20% of their time each week, for a finite period. At the end of that period, their overall impact on company metrics is compared against the estimated impact on company metrics. In this way employees learn concrete ways to practice helping their fellow employees and the company as a whole.
At the end of each review process you should also Identify the degrees of separation of each activity from affecting the profit totals. Bonuses are then calculated based on the profits generated by the employee's efforts, divided by the degree of separation. (Take the movement in the bottom line, divided by the degree of separation, and calculated for each person's goal. Add them all together. The total will be greater than the movement of the bottom line. Calculate each goal's impact percentage, and use this percentage to determine the amount of the bonus.)
The Pixar Brain Trust & PQP
Pixar, creator of the hugely successful animated movies like Toy Story and Finding Nemo, has a tradition called the Brain Trust. In order to ensure that their most-experienced minds have the time and ability to influence as many up-and-coming artists as possible, they hold regular Brain Trust sessions to which the entire company is invited. A few projects are chosen to present at each Brain Trust before the panel of industry giants like John Lasseter, Pete Doctor, and Ed Catmull. Reports are that the sessions can be brutal, but at the same time no one feels personally attacked. They understand, as Ed Catmull describes it, that all projects as "ugly babies" when they get started, and you must protect the "ugly baby" while also making sure that it, and its creators, live up to the Pixar standards of excellence.
This kind of cross-team collaboration is vital to maintaining revolutionary performance. Whenever you bring groups of people together with completely different opinions, however, you have to now how to protect the "ugly babies". This is where the PQP process comes into play. PQP is a feedback mechanism that consists of three parts that must happen in a given order: Praise, clarifying Questions, and then points of Polish. PQP and Micro-PQP should be taught to all company members.
Praise is vital to proper functioning of any community, as demonstrated in the research of psychologists Marcial Losada and Barbara Fredrickson. They discovered the "Losada Ratio", that the highest-functioning teams produced a minimum of 3 positive interactions to every 1 negative interaction, with a maximum of 11 positive interactions to every 1 negative interaction.
Praise must be first, however, since praise delivered with the conjunction "but" ends up having little or no positive effect. Therefore the first step is to go around the room and list all of the positive elements of the project/product being discussed. This is really great practice for employees since our brains are hardwired by evolution to ignore what is expected and highlight the unexpected. Another great way to introduce this segment is, "Tell us which aspects of the project, if they were to be taken out, would be a noticeable loss."
Following a round of praise, clarifying questions should come before any feedback to ensure that feedback is truly relevant. One must avoid feedback in the form of a question, such as, "Don't you think it would have been better to...?" This section is about understanding the topic and coaxing out those elements which the presenter(s) forgot to include that are vital to a proper evaluation.
Finally, after the first two rounds, the presenter(s), who now will most likely feel heard and understood, will be ready to receive feedback in the form of positive growth. It's important that the feedback build on something in the presentation, and not jump into a non-sequitur personal agenda. But beyond that there are few rules regarding feedback since the first two rounds have created the good-will necessary for even the toughest criticisms. Pixar recommends "candor" which is a particular form of honesty that separates the person from the product. They also tend to focus on identifying the problems and the sources of the problems, leaving the solutions up to the project team members. Whatever principles you follow, just remember that it is possible to be ruthless to a project that needs major editing without attacking the people on the project at the same time.
(Micro-PQP is a technique for everyday conversations, rather than presentations/meetings. It teaches that every interaction should begin first with acknowledgement or praise of the other person, followed by any clarifying questions to determine if you truly understood the other person, followed only then by any rebuttal or counter arguments.)
To truly have Revolutionary Performance, you must recognize that there are both similarities and differences between people (and that they are not based on race, role, creed, or any other external definition). One of the best systems for categorizing both the similarities and the contrasts between individuals is the Enneagram. It is a system of 9 personality types, with each type consisting of 9 levels, and 3 similar personality types with whom the individual most associates. The Enneagram teaches us that not every personality will execute the same business system the same way, and leveraging each individual's strengths while minimizing the impacts of their weaknesses is the most-efficient path to success.
For more details on the Enneagram see: Pirate Performance Reviews and Pixar is a Lean Enterprise?
The following process is designed to efficiently manage a project kickoff or sprint planning meeting, or maybe even a stand up, but only if you split discussion into separate micro-meetings. (Don't make the whole team sit around discussing requirements that they could care less about.)
1) Everyone simultaneously and silently writes requirements they value on sticky notes
2) Sticky notes are grouped by duplicates
3) Each requirement is polled for simple agreement or disagreement
4) If unanimous agreement, no more discussion! If disagreement, set aside. Continue this simple sorting until you've gone through all the requirements.
5) Break each contested requirement down into sub-requirememts (e.g. "5 Whys") and seek agreement on the sub-requirements. (Usually people don't disagree on the actual requirement, but on the assumed sub-requirements that go into it.) (Release anybody from the discussion that doesn't doesn't care about the requirement. No hostages! Let them get back to work! Call them back when you start discussion on a requirement they do care about. This may require scheduling micro-meetings every 10-15 minutes to coordinate schedules.)
6) Rank all requirements by priority with the Product Owner, if applicable.
7) Call everybody back for the schedule ranking exercise. Based on the Product Owner needs, the scheduling requirements, and the proclivities of the implementation teams, everyone votes on the order of implementation and delivery and sets the project schedule for the next 3 months (max).