I’ve written previously about how we’re embracing self-management as we build Outseta. Frederic Laloux’s book Reinventing Organizations has had a significant influence on how we want to build and operate our company, as evidenced by our open sourced operating agreement which details how we make financial and functional decisions at Outseta.
But to most of the world of SaaS self-management remains an abstract concept, most often known only as an organizational structure that Zappos has adopted with mixed results if not dismissed altogether. Even to me, self-management has always felt a bit ahead of its time.
On a personal level, I’ve been struggling as of late to find that “next thing” to write about that hasn’t already been beaten to death in the world of SaaS start-ups. As SaaS has matured, the industry’s playbook has become well understood and I’ve found myself relentlessly bombarded by the same messages:
This isn’t a dig at any of these topics—all good things—but it’s been a long time since I’ve heard many truly new, fresh perspectives in the world of tech.
I recently read Better Work Together, a collection of stories published by the Enspiral Foundation, and it presented self-management in an entirely new light for me. The book presents self-management as a method of organizational design that we’re rapidly hurtling towards, driven by a series of trends that we all agree are already making up the so-called future of work:
Taken collectively, where are these trends leading us? That’s what this post is all about and I think I may have stumbled upon the “next big thing” that I was looking for—even if the tech world isn’t quite ready for it.
Chances are you haven’t heard of Enspiral—despite the fact that I’m building a self-managed company I hadn’t until recently. In short, they’re an interesting organization because they’ve already traveled to the furthest reaches of the future of work—Better Work Together is their report back on what the future holds.
For the past decade Enspiral has been “a community of entrepreneurs experimenting at the edges of ownership, governance, decision making, resource sharing, and educational design.”
More tactically, Enspiral started as a loose collaboration of freelancers supporting one another and sharing resources in New Zealand back in 2008. The group was brought together largely by social entrepreneurship—their mantra is “More people working on stuff that matters. If your primary mission is to make the world a better place, your personal success is the reason Enspiral exists.”
In the early days Enspiral members kept 80% of their earnings, choosing to contribute 20% to Enspiral, a shared governing body for the collective. In the decade since this has evolved into an ecosystem of people and companies connected through a co-owned hub, now called Enspiral Foundation.
Enspiral itself is a self-managed organization without any hierarchy, but the lack of hierarchy itself is not what’s interesting to me about self-management. What I think is powerful and compelling about this book (and self-management in general) is the idea that entrepreneurs can take greater, bolder risks and be more successful when they choose to work on their own projects and companies but with the backing of a community rather than operating purely independently.
“What I think is powerful and compelling about self-management is the idea that entrepreneurs can take greater, bolder risks and be more successful when they choose to work on their own projects and companies but with the backing of a community rather than operating purely independently.”
“That’s just the way the game works,” says Susan Basterfield, an Enspiral member. “Bosses have ‘their people’ and human resources decides who is worth how much. Most of us willingly go along with this. It’s a game that we know the rules of. I played along for another few years. Then I stopped. Being supported and challenged as an entrepreneur inside a community was a breakthrough for me.”
As the prevalence of remote work has grown, I’ve witnessed first hand many entrepreneurs choosing to turn to communities to fulfill their needs for comradeship, belonging, and support throughout their entrepreneurial journeys. We all need a tribe and we’re already actively seeking out and building our own. This is not a new concept, but I think you’ll see this trend evolve rapidly in the coming years.
What I see in Enspiral is a bunch of corporate astronauts, collectively 10 years ahead on a journey that many of us are just—often unknowingly—starting now.
What struck me as I read Better Work Together was how reasonable the authors were in presenting their case for self-management—it was as far from “Bosses are bad! Let’s be counterculture!” as you could possibly imagine.
Kate Beecroft provides the definition of self-management that resonates most with me.
“Self-management is an approach to work that prioritizes autonomy and self-development alongside alignment with others.”
That sounds great to me—that’s a future of work that I want to help build. But while self-management emphasizes autonomy, community-based support systems play an important enabling role in the organizational design needed to make self-management work.
“Enspiral itself is not producing deliberate external outcomes,” says Chelsea Robinson, an Enspiral member. “The most direct units of impact are the projects that people organize themselves around. However, the community is a very important primordial soup for increasing everybody’s capacity for impact. This is the essence of becoming a platform for impact: combine passionate people, a trickle of money, high risk tolerance, and good intentions.”
Communities then are two main things—cultural echo chambers and accelerators. Here are some of the lessons that Enspiral has learned along the way with regards to how to leverage and build these communities, supported here by short excerpts from the book.
“I believe that the right organizational structure is unique to its context, people, objectives, and history.” -Richard D. Bartlett, Co-founder of Loomio
All of which is to say self-management is not a fit for every organization, although most would benefit from the additional space for creativity and agility that self-management provides. SaaS companies—where work largely occurs in front of a laptop and often independently—are a particularly good fit for self-management. But even amongst self-managed organizations, the actual structures and processes used to operate a business may vary widely.
“We need management, not managers. Even though the role of the manager may be redundant, the function of management—of tasks, work, and people—is still needed. This function can take the form of coaching, guiding, and supporting, rather than coercion or direct power from a job title. It comes down to how people can be supported to manage themselves and develop the skills they need, rather than relying on someone to tell them what to do.” -Enspiral member
“Equality is a compass point to navigate towards, not a destination I’ve ever arrived at. Imbalance can be bad, e.g. inherited privilege, coercion, manipulation, the ‘old boys club.’ Some imbalance can be good: earned trust, reputation, eldership. Transparency reduces toxicity.” -Richard D. Bartlett, Co-founder of Loomio
“We want to exercise power with others, not over others. No one should lead all the time and everyone should lead some of the time.” -Enspiral member
“I don’t believe you can (or would want to) have a flat community where everyone is equal in every way. Instead aim for a conscious community where asymmetries are spoken about and consciously managed.” — Joshua Vial, Co-founder, Ensipral Dev Academy
“We’ve learned to distinguish between the coercive power that someone holds over another person, and the social power that someone has earned from their contributions to a group over time. In a ‘Do-ocracy’ power and responsibility accrues to those who execute.” -Francesca Pick, Co-founder of Greatherthan
Ultimately these ideas all boil down to power structures and how they can be applied more effectively to benefit a business. The key idea coming out of Enspiral is that decision making power and ownership should be shared among those doing the work.
These new power dynamics are not ideals that should be quickly discarded, easily cast off as belonging to some group of corporate radicals who are probably sewing hemp shoes in a far off forest in New Zealand. In fact, these same ideas are being discussed in business publications as well known and respected as Harvard Business Review.
“Hierarchy is the distance between people making decisions and the people affected by those decisions. We’re talking about reducing that distance. Ideally, there would be no distance at all.”
— Enspiral Member
Now let’s turn our attention to the ways in which many of us in SaaS are already starting to work this way, oftentimes without consciously realizing it.
As I was reading about Enspiral’s journey, it struck me that this whole “self-management thing” should be a lot less controversial than how it’s often perceived. In fact, as I thought about the world of start-up SaaS companies that I work in I realized that the ideals that Enspiral is advocating for are ones that most of us are starting to reach for already. A few examples:
IndieHackers is a community owned by Stripe, but at its core it’s a community of 45,000+ entrepreneurs supporting one another, sharing ideas, and celebrating milestones together.
Don’t get me wrong, Tinyseed is dressed up as an alternative form of start-up financing and there’s a financial end goal for all involved, but at its core this is a supportive community more than anything else. Founder Rob Walling also founded MicroConf, a conference for self-funded software entrepreneurs. He made friends within this community, was looking for a better way to support those entrepreneurs, and realized that collectively they were more powerful than they’d be individually.
Tinyseed also recruited a long list of big name mentors for the program to further this idea—collectively 1+1 = 5. While Tinyseed does prodive a small amount of funding to its portfolio companies, I would argue that the community will ultimately make a much larger impact on these companies than the actual financing that Tinyseed provides.
Justin Jackson’s MegaMaker club is a pay-to-play Slack community of entrepreneurs sharing ideas and supporting one another. Like Tinyseed, it’s also a built in amplification channel for its members—anytime Justin publishes a new blog post or podcast, he has a built in community that helps him get the word out. In my conversation with other group members several have expressed that they chose to join the group because they needed a sense of community and a support system that they didn’t have as remote entrepreneurs working independently.
Simply put, as the prevalence of remote work and entrepreneurship has grown more people have realized the need for a tribe—the communities mentioned above are all an example of those tribes being formed. While groups like these aren’t all sharing an organizational structure, ownership, and profits it’s undeniable that they’re communities of individuals with shared values who have recognized that by supporting one another they’re much more powerful than they’d be on their own. They can continue to work on their own projects and interests and leverage the community to increase their chances of success. That’s the very same concept that drove the formation of Enspiral.
When I first read Reinventing Organizations, there were three aspects of the book that really spoke to me. Three years into building Outseta, here are my personal reflections on the importance of each.
As I said, I have no problem with hierarchy but I have seen it cause unhealthy power dynamics and I simply believe that there’s the potential to do better. Anthony Cabraal writes in Better Work Together, “In a company built through transactional relationships people move on when the money stops coming in or a better offer comes along. Any why shouldn’t they? In an industrial economic model we are just rational units of labour, framed by job descriptions, making self interested decisions.”
While that’s a bit harsh for my tastes, it’s at least worthy of contemplation. Personally, I see in self-management an organizational structure that I think will result in more engaged employees more than anything else.
Another of the essays states, “Organizations that best engage and grow talented, caring people will do the best over time.” I agree wholeheartedly and see self-management as a means towards this end.
Popularly discussed as “vulnerability,” this is the idea that most of us only bring only a small portion of our true selves to work—most often the part of us that’s very masculine, confident, and rational. We check our vulnerabilities, emotions, and uncertainties at the door because we’re afraid that they’ll hurt us in the workplace.
Laloux’s book proposes that this is actually doing yourself and your company a disservice—a fact supported by the report What Makes A Team At Google Effective? In the report, researchers found that the single most important dynamic of successful teams at Google is psychological safety.
“Can I express my opinions and be heard? Can I share the challenges I am facing, both personally and professionally, and be supported? Is there space for vulnerability? Can we take risks in this team without feeling insecure of embarrassed?
To me this boils down largely to the benefits of transparency and telling the “full truth.” If you’re constantly putting up a facade that hides your vulnerabilities or concerns, you’re robbing others of the opportunity to help you address them. By doing so you’re simply not giving your organization the best chance to be successful.
Evolutionary purpose is the idea that the purpose and work that an organization does can evolve over time. You should follow the current to where the collective energy of the group wants to go, and members of self-managed companies will be brought together by shared purpose, values, and ideals.
Reading Better Work Together was a great opportunity for me to reflect on our purpose and why I’ve decided to spend the last three years building Outseta. Dave, Dimitris, and I were certainly brought together by purpose. We want to show that self-management is a viable method of building a business that has benefits in spades over the predominant means of building companies. Silvia Zuur, Director of PwC New Zealand, writes in Better Work Together, “We need to look forward and define the leadership of the future, instead of perpetrating patterns from the past.” I agree.
Additionally, our founding team wants to build software that helps other entrepreneurs succeed with their own start-ups. Both of these purposes still ring true and very much drive the work that we do today.
It’s worth noting that while a shared purpose and philosophical alignment brought our team together, as individuals we all have different purposes, needs, and motivations driving our work too—and that’s perfectly OK! When I think of individual purpose and what we’re each trying to get out of our work at Outseta I can’t help but think of Maslow’s Hierarchy of Needs. Only once you’ve fulfilled your lower level needs and purpose can you move on to the latter stages, and I think that’s true with our team. Said another way, evolutionary purpose occurs at the individual level too.
For example, Dimitris has had more financial success than me—he Co-founded Buildium and because of the company’s financial success his family is taken care of financially. This has allowed him to move up the hierarchy of purpose pyramid, and think more about how Outseta can be used as a vehicle to make the world a better place. He’s also more passionate about building great software than I am—he cares deeply about providing other entrepreneurs with fantastic software tools.
I care about both of these things too, but they don’t drive my individual purpose at this stage of my life to the extent that they do Dimitris’. Financially, I’ve yet to achieve the financial security that he has so it’s more important to me that Outseta helps provide financial security for my family. And building great software is not as powerful of a driver for me—but building a company that provides fantastic job opportunities to others is. My career and life have already benefited tremendously from working in forward thinking organizations, and I’m deeply motivated by the opportunity to provide similar opportunities to others.
“What if your company was designed from the ground up to challenge and support you to be the best possible version or yourself?” writes Anthony Cabraal. I want Outseta to be an enabler that allows other individuals and their families to live fantastic lives on their own terms—that’s a big part of my individual purpose.
My objective with this article was not to push any “woo-woo” organizational structure on you or sell you on the need to build a self-managed business. But Enspiral has been challenging the status quo for over a decade, and I think it’s undeniable that there are trends like remote work, the sharing economy, and social entrepreneurship that are driving us towards a place where we should be rethinking our organizational structures.
We’re already seeing entrepreneurs proactively seek out their own tribes—groups that share a common purpose and values where the community itself can be a major catalyst of both personal and professional growth. At the very least I hope that I’ve spurred your own thinking about the structure of your team or start-up, and that you’re open to the idea that self-management could represent a way of Better Work Together.
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