Speaker 1: Today's episode is another my favorite Tip episode where I
Speaker 1: go back to interviews from the past and I dig
Speaker 1: out the thing that was my favorite tip, like the
Speaker 1: thing that I got out of the interview that really
Speaker 1: impacted or resonated with me. Today's extract is from my
Speaker 1: chat with Michelle la Poidevin. And for those that are
Speaker 1: not familiar with Michelle or Mish as I call her,
Speaker 1: she is the CEO of Inventium, the behavioral science and
Speaker 1: innovation consultancy that I founded many years ago. So she's
Speaker 1: been CEO of Inventium since May twenty nineteen and Mish
Speaker 1: is super passionate about creating the environment and structures for
Speaker 1: people to do their best work. So she has led
Speaker 1: and learned from men of Inventium's pioneering people practices such
Speaker 1: as our move to a holocracy structure where we have
Speaker 1: no managers, unlimited annual leave and most recently the four
Speaker 1: day work week, and also the compilation of the Australian
Speaker 1: Financial Reviews Best Places to Work list. She's also led
Speaker 1: the strategic transformation of Inventium and the development of new
Speaker 1: digital business models. She has an MBA specializing in Innovation
Speaker 1: and Technology from UNSW and She's also been successfully working
Speaker 1: remotely full time since twenty eighteen, long before many of
Speaker 1: us were forced into doing that. So in this extract
Speaker 1: we hear from Mish about Inventium's holocracy and why we
Speaker 1: decided to fire all our managers. So let's head on
Speaker 1: over to Mish. That might be a good note to
Speaker 1: talk a little bit more about sort of a few
Speaker 1: of the things that we do do in Inventium that
Speaker 1: do make us unied in terms of how we run,
Speaker 1: because probably about four years ago now we moved to
Speaker 1: a holocrisy and a holocrisy, well, I might let you
Speaker 1: describe it, Mish. Can you sort of talk about like
Speaker 1: what a holocrasy is and how that actually works at Inventium.
Speaker 2: Yeah, So, really, simply, a holocracy basically means no bosses.
Speaker 2: It's very much a flat structure that is directed by
Speaker 2: self managed teams. If you want to research more about it,
Speaker 2: Gary Hamill is one of the people that have written
Speaker 2: about it the most. But essentially one of the main
Speaker 2: reasons why we did it is that we recognize that
Speaker 2: most senior people were spending a lot of time managing
Speaker 2: people as opposed to making things or doing more creative
Speaker 2: or strategic work for the business, and we also recognize
Speaker 2: that culturally, the kinds of people that we were hiring
Speaker 2: were all of these really self driven, autonomous people that
Speaker 2: really didn't want a manager. They wanted a co which
Speaker 2: they wanted someone that could, you know, steer them in
Speaker 2: the right direction, but they wanted to have the scope
Speaker 2: to be able to forge their own path. So, both
Speaker 2: from a I guess a structural and a productivity sense,
Speaker 2: but also from a cultural sense, removing bosses essentially four
Speaker 2: years ago was one of the best things that we've done.
Speaker 1: I remember when we were sitting down and going through
Speaker 1: all the holocrasy research and trying to make sense of
Speaker 1: it and finding these kind of gaps and questions that
Speaker 1: hadn't really been answered. And for you, four years on now,
Speaker 1: what have been the biggest lessons for you in terms
Speaker 1: of running a holocrasy.
Speaker 2: So I think certainly it is about reinforcing the key
Speaker 2: aspects into the culture. So one of the things we
Speaker 2: talk about often is that we want to build this
Speaker 2: mindset of thinking like the founder, so that means that
Speaker 2: people are empowered to make decisions as if it was
Speaker 2: their own business. We don't have really strict policies and
Speaker 2: procedures around every little thing. We're just say, well, if
Speaker 2: it was your own business, what decision would you make here?
Speaker 2: And that's very much kind of ingrained in our culture,
Speaker 2: and I think that a lot of people really enjoy
Speaker 2: being able to think like that some of the other things.
Speaker 2: So certainly, because we're focusing on coaching rather than managing,
Speaker 2: we have had to upskill people in being able to
Speaker 2: be an effective coach, and that's something that we're still
Speaker 2: absolutely working on that. The system relies heavily on feedback,
Speaker 2: so again, being able to really give and receive effective
Speaker 2: feedback at any time, not just waiting for review season,
Speaker 2: for instance, is a skill that we've had to absolutely grow.
Speaker 2: The most difficult bit that I would say is it
Speaker 2: is a hard system to create a clear aggression pathway
Speaker 2: for people. There is still this really heavy association between
Speaker 2: your titles equaling progress and promotions to a better title
Speaker 2: meaning that you're good at your job. And the system
Speaker 2: really relies on progression via learning and mastery and pay
Speaker 2: as opposed to ticking a box to move up a
Speaker 2: level in a level of hierarchy. So certainly that doesn't
Speaker 2: suit everyone. Some people definitely prefer that hierarchical approach that
Speaker 2: certainly the mastery and learning focus I think is a
Speaker 2: much more fulfilling process to take in the long term.
Speaker 1: Definitely, and we think a lot about that during recruitment
Speaker 1: as well. So there's a very specific type of person
Speaker 1: that fits really really well at Inventium. It does tend
Speaker 1: to be I find a bit of a dichotomy where
Speaker 1: it's like you thrive at Inventium or it just doesn't work.
Speaker 1: There's not much middle ground, I think is probably what
Speaker 1: we've learned now. I want to talk about OKRs, which
Speaker 1: stands for Objectives and Key Results, which is how the
Speaker 1: method we've used for setting goals and for individuals within
Speaker 1: the company setting their own goals. I think we've used
Speaker 1: OKRs for probably about the same time as we've been
Speaker 1: a holocracy, I think. And so OKAYRS we're championed by
Speaker 1: Intel and then Google by John Dor And there's a
Speaker 1: great book Measure What Matters that John dor wrote about OKRs.
Speaker 1: Can you talk a bit about how we use OKRs?
Speaker 1: And I think, particularly in the context of holocracy, where
Speaker 1: you don't have managers, it can be quite hard to
Speaker 1: determine pay rises. Something as simple as pay rises that
Speaker 1: companies generally have systems where the manager decides on your
Speaker 1: pay rise. Can you talk a bit about how that
Speaker 1: works at inventing, because I think that's again like sort
Speaker 1: of something that we've iterated a lot, and I think
Speaker 1: we're sort of finally got it to something that works
Speaker 1: very well and very fairly.
Speaker 2: There is lots written about why you've should not link
Speaker 2: okeras to pay, So that's the.
Speaker 1: First thing to call and I should, And we call
Speaker 1: them okras because we have an A for activities, So
Speaker 1: okay a's, but well os or okays the same thing
Speaker 1: when we're talking about it.
Speaker 2: Yeah, So I guess there's a lot of reasons why
Speaker 2: people say not to most common ones you'll read are
Speaker 2: that if it's linked to pay, people won't set challenging
Speaker 2: enough goals. The other thing that they'll say is that
Speaker 2: people will overinflate their results, or another common one is
Speaker 2: that people don't collaborate as much because essentially they're so
Speaker 2: focused on their own goals and getting a pay rise
Speaker 2: that they don't want to help anyone else. Now, when
Speaker 2: we were looking at this, we we really wanted an
Speaker 2: objective pay rise measure. We really didn't want it coming
Speaker 2: down to a subjective opinion. There are all sorts of
Speaker 2: issues with that and biases and recency effects and stuff
Speaker 2: that goes on there. We also didn't want to set
Speaker 2: up some kind of separate goals for pay because everything
Speaker 2: that people were doing were so centered around their okayr
Speaker 2: is that, you know, what was the point of having
Speaker 2: a separate goal sheet in addition to that that designates pay.
Speaker 2: So we went about basically challenging all those assumptions that
Speaker 2: were presented out there of why you shouldn't link them
Speaker 2: to pay and working out how to essentially reverse that
Speaker 2: and make it work. So some of the things that
Speaker 2: we did, I'd say one of the biggest ones is
Speaker 2: that we obsess over ensuring that the key results that
Speaker 2: people set are value based, not activity based. And by
Speaker 2: value based, I mean the goal that your activities ladder
Speaker 2: up to that connect with kind of the bigger company goals. So,
Speaker 2: for example, a lot of people used to fall into
Speaker 2: the trap of setting a goal such as do ten
Speaker 2: business development calls every week. Now, the value of doing
Speaker 2: those calls is to essentially generate x amount of revenue
Speaker 2: for the business, because if you go and do ten
Speaker 2: business development calls a week and don't make a sale,
Speaker 2: then that's not actually a great result, is it. So
Speaker 2: we obsess over making sure that the goals are absolutely
Speaker 2: value based and then that therefore reduces the ability for
Speaker 2: people to overinflate their results because they're very set value
Speaker 2: metrics and people know that by achieving them it's a
Speaker 2: good thing because essentially they are connecting in with the
Speaker 2: bigger company.
Speaker 1: Goals and just to point out there, So with objectives
Speaker 1: and key results, if you've never come across this concept,
Speaker 1: how it works is that the objective is the broader
Speaker 1: objective in the case of business development, to drive sales
Speaker 1: for the business, and then the key results are where
Speaker 1: it's quantitative, so it's very objective so to deliverlex number
Speaker 1: of dollars in sales over this time period. So that's
Speaker 1: how that works if you've never come across our cars before.
Speaker 2: The other thing that we did was we set up
Speaker 2: a scoring system which is very unique to invent him
Speaker 2: and it is finally tuned and probably difficult to explain
Speaker 2: quickly on a podcast, but essentially we enable people to
Speaker 2: self score their operas based on a criteria and then
Speaker 2: essentially their pay rise at the end of the period
Speaker 2: links to their score, so very very objective, and we
Speaker 2: do have a midway check in as well, and what
Speaker 2: the purpose of the midway check in is to make
Speaker 2: sure that people's goals are right and that when it
Speaker 2: comes to the pay review at the end of the
Speaker 2: six month period, which is how long our operas run,
Speaker 2: that they feel like it will be a fair assessment. So,
Speaker 2: for instance, at the midway check in, if someone's already
Speaker 2: smashed a goal, it suggests probably that they set it
Speaker 2: too easy, so we need to kind of change it
Speaker 2: at that point. Likewise, if someone's priorities have changed or
Speaker 2: something's just completely unrealistic for whatever reason, we can change
Speaker 2: it at that midway check in so that that end
Speaker 2: of end of review score they feel like is an
Speaker 2: accurate representation and then therefore equates to their pay rise.
Speaker 1: It's taken so much work over the years. I think
Speaker 1: having a system where pay feels fair given promotions not
Speaker 1: really a thing an inventium because we're so flat. So
Speaker 1: it's almost like you know, as you talked about before,
Speaker 1: it's like pay is that extrinsic way that people recognize
Speaker 1: for top performance, for lack of getting a better title,
Speaker 1: which is what would happen if you, I don't know,
Speaker 1: worked in a bank or something like that. That, yes,
Speaker 1: it feels like it's at a good place. That is
Speaker 1: it for today's show. If you want to listen to
Speaker 1: the full episode, I linked to that in the show notes,
Speaker 1: so you might want to check that out. And if
Speaker 1: you are enjoying how I work, I would be so
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Speaker 1: and it also brings a huge smile to my face.
Speaker 1: So thank you to the hundreds of people that have
Speaker 1: left reviews. It is so deeply appreciated. So that is
Speaker 1: it for today's show and I will see you next time.