DevOps Institute

[EP81] What is a “Radical Enterprise” with Matt Parker


On this episode of the Humans of DevOps, Jason Baum is joined by Matt K. Parker, author of A Radical Enterprise: Pioneering the Future of High-Performing Organizations. Matt and Jason discuss successful and truly radical business models, what leads folks to try and make change at the organizational level, and how those corporate successes create working models that positively impact and fundamentally change the day-to-day working environment for employees.

Matt is a writer, speaker, researcher, and third-generation programmer. Over the last two decades, he’s played a variety of roles in the software industry, including developer, manager, director, and global head of engineering. He has specialized in hyper-iterative software practices for the last decade and is currently researching the experience of radically collaborative software makers. He lives in a small village in Connecticut with his wife and three children. You can contact him by visiting

The Humans of DevOps Podcast was voted one of the Best 25 DevOps Podcasts by Feedspot.

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Please find a lightly edited transcript below

You’re listening to the humans of DevOps podcast, a podcast focused on advancing the Humans of DevOps through skills, knowledge, ideas and learning, or the SKIL framework.

Matt K. Parker 00:16
And one of my co-workers, so I told you, I’m gonna go try and interview there, he stopped me and said, Don’t do it. Don’t do it. Don’t you know, the Peer Program? Don’t you know you have to share a computer with somebody else, right? It’s crazy. It’s, it’s like agile on steroids. It’s nuts. Don’t do it. I was like, Well, I’m miserable. And I have nothing to lose. And I went and did it. And I loved it.

Jason Baum 00:39
Hey everyone, it’s Jason Baum, Director of Member experience at DevOps Institute. And this is the Humans of DevOps podcast. Welcome back. Thanks, as always, for joining us. The great resignation. We’ve all heard the term. We’ve discussed it on this very podcast. You’ve heard various takes on the why. Well, let me just read you the numbers. In 2021 47.8 million workers quit their jobs. Yes, you heard that right. 47.8 million. Many believe that number could be higher in 2022.

Jason Baum 01:17
According to a February Pew Research Center survey, workers who quit a job in 2021 gave the following reasons: low pay, no opportunities for advancement, and feeling disrespected at work. What are the numbers telling us now? 84% of workers are disengaged at work. Nine out of 10 employees would donate 24% of their lifetime earnings to have more meaning at work. 60% of workers mistrust their CEO. Now, let’s revisit that term, the great resignation. Other terms that are being used today to describe this revolution include the great reimagination the great reset, the great realization. These descriptions talk not of the act of departing, but more of the mindset and the culture shift behind it.

Jason Baum 02:13
how we’re re-examining the role of work in our lives. That’s something we’re exploring. Now, it’s up to the organizations to do the same. And to learn. What can we do differently? How do we reimagine? How do we reset? My guest today is Matt Parker, author of A Radical Enterprise pioneering the future of high-performing organizations. Matt is a writer, speaker, researcher, and third-generation programmer. Over the last two decades, he’s played a variety of roles in the software industry, including developer manager, director and global head of engineering. He specialized in hyper iterative software practices for the last decade and is currently researching the experience of radically collaborative software makers. He lives in a small village in Connecticut with his wife and three children. And you can contact him and Learn more by visiting Matt, welcome to the podcast.

Matt K. Parker 03:19
Yeah, thanks for having me. Jason. By the way, that introduction you just ran. I mean, you should be writing books that was like filling. I got chills listening to. Really amazing.

Jason Baum 03:30
I appreciate it. I numbers. I mean, the numbers, the numbers, really, I mean, do all the talking. Right. All I did was read them. Those numbers are, I mean, it says it all?

Matt K. Parker 03:42
Yeah, no doubt.

Jason Baum 03:44
You know, when we were first when I was first looking at the book and learning more about you, there is there’s a line on the back, I believe of the book, the fastest-growing most competitive organizations in the world, have no bureaucracies, no bosses, and no bullshit, which I love. But it like made me like, I am a visual person. So it instantly put me back in my like, I’m 17 years old, I’m in a punk rock band. I’m the one drawing the giant A’s on my notebook. And, you know, I’m pretty sure it was a no effects lyric, you know, that was me. And then you grow up and you become jaded. And you go along with you know, I mean, we did our last podcast was about generation generations. And we talked about Gen Z, and we talk and I’m always like, the boomers are the most fascinating to me because these were the hippies. And now they’re the ones basically telling you what to do. So it’s like, okay, is it just age or is it generation what is it? But I just love the concept and I wanted to say that but also say, is this real?

Matt K. Parker 04:58
Yeah, yeah, no. the tagline for the book sounds revolutionary to some extent, right? Like, oh my god, like what’s going on? Like no bosses, no bureaucracies no bullshit like, whoa. And at the same time, right it’s not like you know, the punk rock band up on the stage that’s being very loud and obvious about everything right? This is like a quiet revolution that’s been happening, right. And over the past couple of decades, right? We’ve seen the number of companies that fit this bill, which I refer to as radically collaborative. By the way, that’s not the only term in that you can find in organizational science, literature and elsewhere, they can be everything from teal to whole kradic, socio kradic, self-governing, self-managing, etc. Radically collaborative is another name for them. It’s the one I chose. And I’ll tell you more about why I chose it later. But anyways, the number of companies that fit this bill have grown from one to three to now 8 percent of companies around the world, roughly, and, and it and they have demonstrated that through that growth, what’s happening is that there’s very clear sort of outsized economic results from this type of company compared to other more traditional organizational archetypes, which explains a lot of their growth, right? It would be one thing to say like the sounds good, but actually, it turns out, it doesn’t matter economically, but the actual the two things are actually strongly correlating right, these companies which are very focused on creating environments, which supercharge intrinsic motivation, passion, engagement, meaning, purpose, fulfillment, right are also leading to some very clear economic results. And a lot of what I’m doing in the book is trying to both trace this sort of development and explain it. And I might, as you said in the introduction, right, my own background is in software engineering. And so I’m not an organizational scientist myself, I am just sort of trying to research, synthesize, and really, you know, piggyback off the work of psychologists, sociologists, organizational scientists, economists, etc. To help explain why this thing is happening, right? To point at it to say, here’s how it’s happening. But here’s some of the why behind it. And in that, I end up arriving at sort of these four primary imperatives, I call them these four things that seem both present and all these companies that are really succeeding with this way of working, and also probably very necessary to that success. And just that a nutshell, they’re called Team autonomy, managerial devolution, deficiency need gratification and candid vulnerability. So anyway, I can go into all that too. But at a high level, that’s sort of what this book is about, and what it encapsulates.

Jason Baum 07:47
Yeah, and thank you, and you know, what I should have, you know, I have a habit of going all over the place with these interviews. So just so you’re warned, what I did just there was I went right into the middle of the book. But I think sometimes when you hear things that are that sound radical, right, you kind of need to go to the middle to understand it to kind of break down your initial wall. Because I think when you say, an organization of no bureaucracy and or an organization with no bosses, instantly the wall goes up. I mean, it did it for me, and I support it. it’s just because well, that’s not what I’m used to, but then you go back to those numbers. And when I was putting the intro together, and I was thinking about it, all I keep coming back to is, well, gee, it’s not working. It’s clearly not working. So yeah, maybe a very drastic approach. And just saying, Okay, we’re going to pull the, I mean, maybe that is the way to go, But you need kind of start there, right to make any progress. You need to kind of go to the extremes. And so I appreciate your kind of just jumping into the middle with me. And now let’s back up and kind of go back to the beginning. And tell me, first of all, why did you write this book? Why did you feel like this was something that you had to write?

Matt K. Parker 09:23
Okay, so I’m a software engineer. So it was my dad. And so was my dad’s dad. So I’m a third-generation programmer and growing up, and I sort of looked up to them heard their funny stories about working in software, I heard early stories about what it was like to carry punch cards around and, you know, hand them to the operator and come back the next day and the operator did tell you, your program doesn’t work. And that’s literally, you know, the whole error statement. They say, What’s wrong, you know, anyways, I looked up to them growing up, I had this image in my mind of how awesome it was going to be once I started to get paid for programming. Right, I didn’t really start learning programming until I was in high school. But, you know, it was just such a connection for me so much passion I had for it. And then I went into industry, and very quickly realized that what I thought was going to be the case was not at all the case. Like, I thought I was going to love doing this job. And it turned out very quickly, I started to hate it, right, because everywhere I went, whether it was a large financial enterprise or a small startup, it seemed like I was, I was in an environment in which people had said, hey, how could we take all that fun out of programming all the creativity out of it? How could we put people together and make them work on something for two years, never deploy it, and then throw it away at the end? Like, what would that do to their souls? I don’t know. Let’s try it. And like, I just kept having these dystopian experiences in which I started to not even want to program anymore, right? I didn’t even want to touch a computer, the second I left work, and I really even got to the point where I thought, okay, maybe I just need to pick a new industry, maybe I need to reevaluate my life. As this was sort of coming to a head, I got an email from a recruiter that worked directly for a little company called Pivotal Labs, which had a few offices in the States at the time, this was late 2011. And she reached out to me and said, Hey, we saw some of your open source work. You want to come interview? We’re right around the corner from you. Yes, I do. I’ll come interview and all I really knew about them was their Pivotal Tracker, really, you know, product management software. And one of my co-workers who I told, I’m gonna go try and interview there, he stopped me and he said, Don’t do it. Don’t do it. Don’t you know, they pair program? Don’t you know, you have to share a computer with somebody else, right? It’s crazy. It’s, it’s like agile on steroids. It’s nuts. Don’t do it. I was like, Well, I’m miserable. And I have nothing to lose. And I went and did it. And I loved it. Because the experience of actually making software with others on a basis of partnership and of quality, the experience of having autonomy of backlog of going after a goal. But as a team having the autonomy to figure out day-to-day, what are we doing to get there, right? To put software in the hands of users to quickly validate or invalidate what we thought was true, to turn that around into something else, right to go through that learning cycle over and over again, and to see some pretty amazing results, right? To not only feel good, like, Hey, I’m having fun programming, again, with people I work with. But also, we’re doing some pretty awesome stuff. And we’re quickly getting results like that really turned my life back around. It made me it sort of made me reimagine so many things were possible in the world of software development. And that experience of radical collaboration I had for many years, I played many different roles, as you alluded to. And I began to eventually ask myself, why did this work? What made it work? What’s good about it? Why did it feel good for me? Why did it lead to good things for customers? And is it just software? Or is this experience happening in other industries, right, and through a lot of trial and error and eventual, like a lot of research and going out to companies and interviewing them and reading my eyes out and trying to synthesize all that back together, I eventually sort of stumbled into this whole world of radical collaboration, all the research around it, how it manifests in many different industries, and a lot of sort of the, you know, theories about what makes us all sort of fit together, tie together and lead to the result that it does.

Jason Baum 13:22
I’m not sure if you’re a fan, but as you are describing the early days there of your experience in the software industry. There’s one movie in particular that comes to mind. I think that Mike Judge is probably one of the smartest filmmakers and television creators of all time. And he had the movie back in the 90s Office Space. And they capture that what you’re describing, I think perfectly. You know, did you put your cover on the TPS report and like to find 10 different bosses ask you did you put the TPS cover on your TPS report? And like you’re saying like, needless, senseless bureaucracy that, like, doesn’t make it’s there to drive you insane. I think that’s its only purpose. I think that’s, that’s so great that like how you just described it. So tell me more about collaborative organizations, radically collaborative organizations. What are they and why are they growing in prevalence around the world?

Matt K. Parker 14:31
Yeah. Okay. So what are they? They are organizations that I think broadly speaking, we can say, they’ve sort of looked out and said, Wow, people can do really amazing things when they actually care about what they do, and they love what they do and they enjoy doing it and doing it with the people around them. It’s a How can we design an organization in which we are you know, supercharging this power of intrinsic motivation, right. How are we creating an organization in which we are supercharging the ability for a group of people to come together and collectively innovate in ways that no single person could have done on their own? What stands in the way of that? A lot of companies around the world have come to the conclusion that there are fundamentally two things that stand in the way that most traditional companies have. And its domination and coercion. Most companies are structured in what sociologists refer to as a dominator hierarchy. And that’s really just a statement for a system in which people are ordered by rank, right in which power privileges, resources, judgments, etc, are privileged and distributed by that rank and concentrated at the top.That static sort of privileging of that power leads to an important corollary, which is coercion, right? It gives people within that hierarchy coercive power over the people beneath them in the hierarchy. Those two things are what sociologists and psychologists refer to as a growth-inhibiting environment. They’re an environment that actively undermines security, autonomy, fairness, esteem, trust, belongingness, meaning purpose, just by design, they’re there every day, inhibiting those things. And those things are really what stand at the human level, the human sort of foundation of radical collaboration, right? environments that are rich, and trust, security, autonomy, fairness, esteem, etc, are the kinds of environments that we want to create, because those so strongly correlate with these outsize economic outcomes with innovation with collective performance, etc. And so these companies have said, Okay, what does it mean to create an organization, which is still structured? and yet, it’s not structured as a hierarchy? Well, the term for that is called a heterarchy. The difference between heterarchy and hierarchies, hierarchies are structured on a basis of linking, as opposed to a hierarchy was structured on the basis of ranking. Right. So how are the roles within the organization linked together? How are they complementary? What does success mean for any given role? And what does that role domain have authority? In other words, what does that role have autonomous decision-making rights about? There’s a lot of thought that goes into how do we create that for each role within the company? And how do we make sure these roles are complementary, not contradictory, that they’re clear that anyone who accepts a role within this organization or organization has a clear domain of authority that empowers them to make meaningful decisions because that’s what autonomy it is.  Autonomy is the process of making meaningful decisions having choice. That’s what it really boils down to, both for individuals and for teams. What you end up seeing sort of at a high level on the structural side, in these radically collaborative organizations is team autonomy and managerial devolution. Team autonomy is probably what it sounds like, to all of your listeners, right is teams that have autonomy, a backlog, right teams that are going after a goal but decide day to day how they get there, right? It’s teams in which authority has been pushed to information, the people on the frontlines getting all the information about what’s working, and what do not also have the appropriate domains of authority to make decisions based on that information, instead of running it up the hierarchy and flagpole and hoping somebody at the top makes a decision for them. And then managerial devolution really refers to a process of decentralizing those power structures, really taking the process of how do we iterate on this business, right? And the business of how we do business, right? How do we iterate on our structure, on our roles, on our relationships, on our teams, on our practices, processes, et cetera? How do we do that in a way that’s not based on domination and coercion, but based on partnership and equality? And so there are many different ways these companies have developed and experimented with decentralized forms of governance. And so at a high level, that’s sort of what you can see. And I just want to give you a couple of companies as an example.

Yeah, it’d be great. Yeah, so I was gonna say, what is the like real-world application?

So I’ll give you an example of a large company for so hire is the number one appliance manufacturer in the world and they’re increasingly the number one smart home appliance manufacturer in the world. HAIER. They’re actually the parent company of GE Appliances. That’s how big they are. They own GE Appliances. Okay, so higher over the past 40 years, went from a very command and control top-down and very ineffective bureaucratic organization to a pioneer and radical collaboration, right. And the way they structure the 80,000 people that work at HAIER now is through something that they refer to as micro-enterprises. So they took those 80,000 people and they said, actually, what we need to do is to break all of this up into small teams of entrepreneurial units, right micro-enterprises, teams that own their own p&l, right teams that own their own balance sheets, teams whose pay is derived from the value that they generate, right and that we need to create a sort of marketplace or a sort of incubator for being able to spin up these micro-enterprises. Their CEO refers to this, by the way, as a host of dragons without a leader. He says that every micro enterprise is like a dragon. And the dragon is the mightiest animal and Chinese culture. And all of these teams can sort of start their own products and services on this internal marketplace without the guidance of a leader. And he says that’s the highest level of human governance. And that’s what they all have created at higher. The process of getting there. By the way, since they didn’t start with it was all over the place, right? They tried many different varieties of organizational structures before eventually pioneering this approach. One other example that I’ll give you is a company called Morningstar. Now, Morningstar is quite different. But it’s still radically collaborative, unlike Haier, which is all these sort of autonomous micro-enterprises that can relate to each other at will, or go outside the company. And, you know, it’s sort of almost like a mini free enterprise, right? Or an internal free enterprise. Morningstar is quite the opposite. Morningstar has a very specific thing they do. They take tomato, raw tomatoes, and they turn them into tomato products, like dice tomatoes, puree, right, all the kinds of stuff that eventually winds up in like your Heinz ketchup bottle, or your can of tomato sauce, probably came from this company Morningstar, because even though they were only started 30 years ago, they’re the number one tomato processor in the world, the largest tomato processor in the world by volume. And their entire structure is radically collaborative. The founder started it with the belief that all of these companies out there doing tomato processing were overly bureaucratic, were not giving people any sort of autonomy or sense of equality in the job, not letting people make meaningful decisions. They said, Guess what? We’re all going to be equals. And we’re all going to start every year without titles. And every year, we’re going to say to ourselves, how are we going to take this year’s tomato crops and turn them into products for our customers, dyes, tomatoes, puree, etc? What are we going to do? Who’s going to do what what commitments are we making to each other? He said we can all do this in the real world. We are all adults out there. We’re all buying homes, having families doing all kinds of things, buying cars, right? We’re all collaborating, cooperating or competing with each other, right? Through autonomy. Well, why can’t we do that within our company, it turns out you can and they became the number one tomato processor in the world by doing this. They call them Colleague Letters of understanding. That’s what they write every single year. And they’ve maintained them throughout the year two is their understanding of what they need to do changes. But they’re basically encapsulating the commitments that each individual makes to some other individual or group of individuals in the company. Here’s what I’m doing for you this year. And that’s how we’re going to make this happen this year. So anyway, it’s a very different sort of structure for radical collaboration. But I think it just sort of paints a picture of the breadth that we have in this whole spectrum,

Jason Baum 22:47
and very different companies that you just gave examples of. Okay, I think this is fascinating. And I am I love this. I am a fan of this. Now let me put the host devil’s advocate hat on. Okay, so it’s a company where everyone’s kind of in the same boat, leadership-wise, they’re all the same level. They’re all working collaboratively. And there’s not necessarily a hierarchy yet. I’m assuming there’s a CEO. So there’s some type of hierarchy. This sort of sounds like communism, Matt.

Matt K. Parker 23:33
Yeah, I can see. Yeah, you know, and I sort of had these. I guess you could say, fears going into it, like, what is this office really, and, and what I came out was sort of the opposite. I think a lot of I mean, like, actually, I think what you could say is Morningstar is sort of the opposite of communism. It’s like libertarianism, right? HAIRE, as a company said, hey, you know, what’s awesome about the free market, its ability to scale. And its ability to do that without any centralized command and control, right? There’s no five-year plans, there’s no crazy budgeting that goes on to run a free market, right? It’s actually all these autonomous agents that are contracting with each other competing with each other collaborating all at will, right. And it’s leading to these amazing things that we see around the world. Can we take that? Can we take that sense of freedom, that sense of agency, ownership, accountability, that that we see in those sorts of systems, right, those sort of free enterprise systems, and can we bring them down to our company level? Right? And so I know why you would, you would say like, Hey, this sounds like communism. But I think actually when you look into it more and more, you realize it’s sort of the opposite. Here’s another example. By the way, Matt Black Systems is a small case study that they do in the book, and they are a small manufacturing company. They make instruments that go in like the cockpits of airplanes, right and they went through their own radically collaborative transformation, they were trying all kinds of stuff to turn the business around, they tried lean, they tried agile, they did all these things they brought in all of these consultants, nothing was working. And they sort of came to the same realization. Like, what if it was just very clear to everyone the value they created, the commitments they were making to each other. And what if the money they took home with them at the end of the day was related to that, right there related to their ability to all collaborate and create, ultimately value for our customers. And so they created a fractal organization that’s yet another sort of radically collaborative organizational type. And so at matte black systems, every single person is a virtual company, every single person has their own individual profit and loss statement, every single person has their own balance sheet. The second they did this, by the way, the second day, just distributed balance sheets into the company, the workers got together and said, Wow, you know, what we should do, we should sell off 50% of the manufacturing equipment on our work floor that’s just sitting there collecting dust, because as long as it sits here on our balance sheet, we have all this debt hanging over us, right, we should sell it off. And we will all be more profitable as a result, right. And so you can think about like that as sort of making it very clear, and giving a lot of sort of both decision making power, but also making it very clear with what the consequences of a decision is, to people right to a group at large.

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Jason Baum 26:53
Anyway, I think that’s fascinating, you know, when a company gives you like shares, for example, that’s their way of saying, Well, you have a stake in the company, and it’s like, okay, but it’s gonna take you four years to be vested, you might not get that there’s a percentage taken out of this. And you know, when we go public, it’s not going to be. So that’s always a nice to have, but it’s not like I don’t think anybody’s gotten a share. And it’s like, I own the company. You know, but your own balance sheet. Yeah. And all of a sudden, you’re thinking, how can I save us some money, like there’s some ownership there because there’s some true ownership there. That’s, that’s, that’s really interesting. I also love that you are giving examples of companies that are larger. sometimes I talk too much. And I’m like, sometimes the one who like says, oh, we should do this. And it’s like, some align those so told to me once is Do you know how long it takes to turn a cruise ship. And it’s I, I get it. But the fact that you are giving these really like these, in hires case, like these enormous, massive companies, and they’re doing it to me, there’s no excuse. No one can say, well, yeah, that works for maybe a small company that can be lean. But you know, for a big organization that doesn’t a big company, that can’t really work. So I, you know, gosh, there are so many places we could go here. Because I think you’re making this sound much more real to me, which is good. So how do we make people understand this? How do we get more companies to say, you know, do more people need to leave jobs. I actually said once, when we were first talking about the great break resignation, I’m worried that all these people leaving the jobs that they hate are just going to these new companies that just lost someone because they hated their job. And now we are just constantly going for back company. No one’s actually changing anything. So how do we change it?

Matt K. Parker 28:54
Yeah, well, all right. So this is a question that I tackle in the book. I mean, on the one hand, we can say, why has it grown in the first place? Right? How why have we gone from 1% to 8% of companies around the world, somehow fitting this bill? Right. And I think there’s many different things that we can point to. But I don’t want to undersell the fact that a lot of this ultimately does come back to the fact that these companies are economically successful, that they are actually having outsize sort of outcomes in the marketplace, right? That they are out-competing, much more traditional and much more slow competitors, right. So that alone, right, I think leads to an element of growth, because all right, people may be stuck in their ways. People may want things to be a certain way or don’t want to give up certain sorts of power. But at the end of the day, companies want to succeed, they want to compete, they want to make money, right? They want to grow, right? And so if you care about those things, you are naturally going to be looking at certain competitors coming at you and saying what Are they doing different? And when one of those competitors is HAIRE, right, or Morningstar, or you know, any other company, like even some smaller, like startups, right, that are doing these sorts of things, too. And suddenly having success in the marketplace in bigger companies are like, what are we doing wrong? you’re going to ask yourself those kind of questions, and you’re going to either start to emulate what they’re doing, and thereby trying to like, have the same success that they’re having, or you’re going to just continue to see your marketplace, your position in the market, erode, etc. So there’s that aspect to it that I think is just working in our favor. That being said, I don’t think it’s enough. And you asked me in the beginning, why did I write a book? It’s partly because I don’t think it’s enough, right? I think conversations like this, books like the one I’ve written, which, by the way, is just one of many in this whole genre, looking at this sort of phenomenon that’s happening now. Right, but I just want to make my own contribution to it and point it at my own peers, right. I’ve talked about manufacturing companies and stuff so far, but I also looked at many technology companies that are doing this, and trying to understand what it what makes it work in the world of technology, right? Not just the one I came out of but and others that are doing radical collaboration as well. And I want people to be able to look at those, take inspiration from it, and be able to start to begin radically collaborative experiments and transformations within their own space. Yeah, I’ll stop there.

Jason Baum 31:26
Ya know, it’s, I keep going, I hear you talk about this all day. So where I want to go next is to my question, because you said, you know, companies, it’s the money, right? It’s if the money it’s talking, though, listen, you know, obviously, we’re capitalists. At the end of the day, if you’re a capitalist communist doesn’t matter. Right? We’re all motivated by capitalism. So and in ourselves to write those numbers that I read at the beginning, why do people leave? They’re not getting enough money, There is no opportunity for advancement, and they’re feeling disrespected. Okay, feeling disrespected. I think in some ways with this, we can understand how that would change. Right? opportunities for advancement? Well, that’s certainly taken care of, what about the pay? So in these types of structures, where we’re so used to you climb the ladder? If the ladder is not there anymore? How do you climb from a PayScale? Because I’m still interested in climbing. I don’t necessarily care if I’m called a, you know, Chief, you know, creative couch potato, but how am I making money? You know, like, is that still part of it?

Matt K. Parker 32:41
Yeah. Yeah. No, it’s a great question, too. And it’s one that I devote a fair amount of words to in the book because when you look at systems of domination and coercion and traditional companies, a lot of it does revolve around the way people are paid. The way people get raises, or don’t get raises, the way compensation happens, and performance reviews around etcetera, etcetera, right. And promotions, obviously, are tied up into it. So many of us want to climb the ladder, because we need more money, we want more money for our families for a better life, etc. send our kids to a better college, all that kind of stuff, right? And so, if you eliminate coercive forms of pay, right, then how do you actually grow your own pay within a radical collaborative company, if it’s not pretty pleasing the boss and trying to win that promotion right over your peers So you get a bigger piece of the pie? What is it? Well, actually, there’s many different answers here. One of them I already sort of have pointed to, right, when we talk about backpack systems and HAIRE, they both have forms of pay, that are very tightly correlated, and they’re essentially a function of the value created either as individuals or as teams, right? Either as a fractal company, right, a virtual company of one like in the matte black systems example, or as a micro-enterprise, right, a small team who’s basically saying our pay is derived from the amount of profit that we can point to that we’re generating on our own sort of internal free market. Okay, so that’s one form of pay, but there are many others. WOGore’s another company I should mention, right, it’s, you know, 15,000 people around the globe. Now, it’s doing several billion dollars worth of revenue every year. They’re the people behind like, Coretec, waterproof fabric, glide dental floss, elixir guitar strings, right. They’re an innovation and r&d, manufacturing innovation organization. They’ve been doing this since 1958. Guess what they were started by four chemists who got together and said, We hate working for this big bureaucratic company that we work for. They’re squashing all of our innovation. Why don’t we get together and do something different? And why don’t we make a company that makes innovation and supporting that, like the goal here. They got together and they made a radical collaborative organization. And it’s really one of the longest-lived experiments in America that we can point to in this way of working. Okay, so the way they do pay is that your peers decide your pay. Whatever team you’re on, you decide your peers pay and they decide yours. That’s how they do it. It’s called peer set salary. Right? That’s their approach to doing it. Here’s another approach to self-manage pay. Grant Tree. For instance, in the UK, which I talked about in the, in the, in the book, as well as peer group, are both companies that do self-managed pay, where essentially you say, how much money you want to make you say openly to the rest of the company, you give yourself that amount of money, you give yourself a raise if you want to, but you do it transparently. Keep in mind, too, that the checks and balances within these companies are real. And many of these companies hiring and firing have been devolved into the organization as well, like nirsoft Now, called Corp is a great example of this. Anyone in the company, right? Any team can get together and decide this person’s gotta go, and they can fire you. Well, okay, so if you’re standing there and saying, I’m going to make a million dollars, now, I deserve that kind of salary, your peers could turn back to you and say, ha, you’re done. Now, that’s insane. You can’t do like being in a co-op. It is. Co-Ops are another form of radical collaborative structure that is gaining prominence now in the world. In fact, one of my friends who used to work at Pivotal Labs left created his own consulting company and has turned it into a co-op. Right? And so he and all the other consultants in the company collectively own it. Right. So anyways, there’s all these fascinating approaches. One more I’ll mention by the way that your audience might find interesting is called the Deming taste system. It’s named after W. Edwards Deming, right, the forefather of lean manufacturing, and certainly, a progenitor for systems thinking. Really fascinating thing here. Well, one of the things he thought a lot about was pay, right. And based on his approach to thinking in systems, he said, Actually, we shouldn’t pretend that our companies are a meritocracy, right, we shouldn’t pretend that we can figure out what it is that we can say this person’s contribution is due to them this amount, and therefore they should make this amount of pay. He said, actually, a bad system will be a good person every time. And so our focus has to be on improving the system. That has to be our primary focus, let’s create a pay system that reflects that primary focus. Let’s make sure that everyone knows coming in how much money this role makes day one, what, how much raise you get every single year that you’re in that role. And let’s also take profit sharing and distribute that equally. So that quarterly dividend distributed equally to every single member of that organization. Well, despite the fact that he won, like the one of the Coppa economic freedom medal from Ronald Reagan, not a lot of companies were keen on his idea around pay at the time, right. But companies now a lot of companies are doing this. They’re creating their own versions of the Deming pace system, they’re making it open and transparent, and collectively also deciding the numbers themselves. Here’s what this rule makes, here’s how much raise you get every year, we don’t pretend like we can look at you and say what your performances and give you a raise based on that we’re actually focused on the system itself. And that’s how our pay works.

Jason Baum 38:08
I love that version, what you just said it actually and the fact that you, you kind of ended on that one is, I’m so glad because I was actually going to go back to the performance review real quick. But also, before I get that pure manage pay, that’s terrible. By the way, my peers are going to tell me what to me. I don’t know, I better be very, I guess it encourages you to be nice to everybody. That’s what that will do. But the performance review, and kind of what you just said, like being told, Hey, you’re doing a good job. Well, I think if it’s kind of, you’re either going to be doing a good job or a bad job a bad enough job that you’re going to be let go. So I think if you’re still there, obviously, you’re doing a good enough job I think in a world like,  so this is DevOps, right, This is humans of DevOps. When we’re encouraging blameless culture, we’re encouraging a culture of incidents are okay, they’re going to happen. You know, like, it’s how we learn. It goes back to I always compare this to parenting, because it’s like, how would we talk to our child? It’s like, accidents are okay? Like, you’re allowed to make mistakes, how are we going to grow if we don’t make those mistakes? So when you have these reviews, and it’s like sometimes they’re just literally, can checklists that you have to go through when it’s what are you really gleaming from them? I personally don’t like doing performance reviews or having performance reviews because I don’t think they accomplish anything other than it’s just another form of bureaucracy. I think you need to have immediate check-ins you constantly are in the loop as to what’s going on. When you have these daily check-ins or weekly, bi-weekly or whatever you’re style is, but continuous feedback, right? It’s the continuous feedback. So there’s nothing no surprises, there’s no quarterly surprise coming your way. And when pay is told to you upfront, this is what this position makes. You know, there’s no $50,000 scale or something when you’re, you know, getting talking to the recruiters or whatever. And then when you’re there, yeah, this is how much is increases every year. And you can expect that it takes away so much of the pressure that we have on ourselves to know what we’re going to be dealing with every year.

Matt K. Parker 40:33
Yeah. I mean, yeah, no, I actually, you know, you said, I don’t think these performance reviews, do anything. I think they do something. And I think it’s very bad, right? I think ultimately, right? Performance reviews they’re based on a very outdated, antiquated, and debunked theory of human motivation. It’s called behavioralism, right? It’s turned back in the early 20th century when people started studying behavior in rats. And then they began to extrapolate a lot about what they learned about rats to people, right. And then from even the scientific statements made along those lines, which are no longer even considered valid science, right, we have then taken a version of that a warped version of that into pop culture right now we have pop behavioral ism. And so it systems of management in most companies and pay systems of pay and most companies are based on a belief that you have to use carrots and sticks to get performance. And this is actually been debunked by the last 75 years of research into behavioral science. Broadly speaking, we can refer to two basic theories about human motivation. One is called Theory X. The other is called Theory Y. Theory X is a pictorial mnemonic, by the way, imagine a worker holding their hands up and the next in front of them, what are they saying, screw, I’m not going to do anything unless you force me to. I’m lazy, I’m recalcitrant. So unless you’re putting a pretty big carrot in front of me, you’re not gonna get performance out of me. That’s Theory X. And if you treat your workforce as if they all conform, that theory acts as if they’re all lazy and recalcitrant. And you whip them with disincentives. And you know, carrot them with pay incentives and stuff like that. The thing is, what we’ve discovered is that although they started as human beings with intrinsic motivation, you turn them into human beings who can only be who will only perform based on extrinsic motivations, theory x is a self-fulfilling prophecy. Theory Y, another pictorial pneumonic, imagine a worker holding their hands up in a while like this, what are they saying? They’re saying, Yay, I’m glad to be here. I like working right. I like my job. I’m passionate about programming. For instance, I want to do that I started as theory y, what did I become after 10 years in our industry, Theory X. I didn’t want to do anything anymore. I was so demotivated by everything. And I’m not the only one, you said in the introduction, 84% of people around the world are disengaged at work. And by the way, a fair number of those are actively disengaged, they’re actively creating toxic situations for themselves and the people around them, they are so upset with the way things are, right. That’s the kind of thing that we create with old-school ideas about people about behavior and about motivation. And that’s what we have to change. And that’s part of this radically collaborative revolution.

Jason Baum 43:10
I think that is an excellent place to stop, I want to keep going. So I think we’re going to have to do this again. Maybe in a Twitter space, maybe another venue, the more that we could, I would love to continue this conversation with you. I think this is absolutely fascinating. And, Matt, you’re not off the hook just yet. Because we always like to close with 1 more question. I don’t like for this to be a gotcha question. But I kind of do it. It’s always a little more personal. This one’s not necessarily as personal. What’s one question you wished I’d asked you? And then how would you answer it?

Matt K. Parker 44:01
Okay, well, this, I wish that we had had the time to talk about one of the imperatives actually two of the imperatives that we haven’t really covered at all. I’ll pick one deficiency need gratification. Here’s how I would answer it. If you had said What the heck is that? Here’s my 30-second answer. Human beings are different from other animals. We don’t just need water, food, shelter, right? We need love, security, autonomy, fairness, esteem, trust, meaning, we are meaning beings. We’re not just physical beings. The companies that I profiled in the book and that I talk about a lot of their practices, a lot of what they have thought about is how do we create environments that are high in what psychologists refer to as deficiency need gratification, high in environments in which people mutually satisfy each other’s need for those human needs for security, autonomy, fairness, esteem, etc. Right? And they have little practices that they do every day. They have big practices that they do once a year and everything sort of in-between for maintaining a culture. That feels good, right? I’ll end with this, psychologists like Abraham Maslow, Carl Rogers, Romae, and many others in the sort of mid-20th century, were all saying, We believe that what is good for people will also be good for organizations. And we wish these companies believed us. And we wish they would focus on creating great environments for people because I think it’ll help them be great organizations. The truth is, they didn’t know they didn’t have the empirical data to say for sure whether or not that was true. That’s no longer a, maybe it’s true, it’s a definite truth. Now, we have lots of empirical data that says there is a strong correlation between environments that are good for humans and environments that are good for organizations and results that are good for organizations. So I’ll end with that. It’s just another aspect of this whole dimension that is really important to consider and explore.

Jason Baum 46:02
We’re gonna change up the structure of this podcast because I’m so motivated now. And inspired. So I have a follow-up to this, too, that we spent a lot of time on my, on my conversation last week, on generations, and we talked about Gen Z, and what motivates them. And this is they are, I think, in many ways, the millennials are value-driven, certainly, but not as passionate. Gen Z, is value-driven, and they’re gonna be in your face about it.Do you see them being as they get into the workforce, and they learn more about the structures, and they’re vocal, Do you think that there’s an opportunity here with Gen Z coming into the workforce for this to really take off?

Matt K. Parker 47:05
Yeah, absolutely. In fact, it’s being referred to now as the passion paradigm, in sort of behavioral science, literature and organizational literature, exploring this sort of explosion in the value placed on having a job that you’re passionate about doing work that you care about, that you find meaning in, right, it’s growing and growing and growing. And I don’t know, I personally don’t have the data in front of me to say that, truly, there is like a significant and meaningful difference between the way this was expressed in the previous generation and the current generation or anything like that. But the fact that it’s growing, is true nonetheless, right. And maybe it’s growing across the board for everyone alive today. Or maybe it’s just a small segment of it. But it is a meme at the end of the day, that is captivating, more and more people. And it’s spreading that meme, right? That that I think is part and parcel of continuing this quiet revolution in the way we work, right? I’m using meme not in the sense of, you know, pictures on the internet. I’m using it in the original sense that Richard Dawkins proposed it right. A meme is a unit of cultural propagation. It passes from person to person, it’s how we spread our culture, right? the fact that that’s spreading, and it’s finding more and more currency in the world. Absolutely Points to there’s something big on the horizon. Like this great resignation, as you mentioned in the beginning is actually about creating a world in which we have more meaning and purpose in our lives, in which we say, enough is enough. We are not going to take it anymore, we actually deserve better, and we can create better. I’ll end with this. A coworker a long time ago, he looked at me one day, and he said, We’re adulting wrong. And he sort of was, you know, he didn’t really explain it at the time. But I think that his statement, we’re adulting wrong, encapsulates what so much of us feel, but the flip side of that is, why not adult right? We can make any sort of world we want. There’s nothing about this world that and especially the human side of this world, that is necessary or final, right, we can get together and change what we do, what we experience, how we experience it together and make it what we want it to be. And I think that’s what this was all about. And, and as much as Gen Z is and it’s sort of on the forefront of expressing this potential. Absolutely. We should leverage it and run with it and follow their lead.

Jason Baum 49:32
We are adulting wrong. Matt, thank you so much. Matt Parker, And I think this was such a great conversation. I had such a good time. I hope you did too. Radical Enterprises is the book, Matt, thanks again. And thank you. And thank you for listening to this episode. The Humans of DevOps podcast, I’m going to end this episode the same way I always do encourage you to become a member and join us in the community at DevOps Institute DevOps in the wild, to get access to even more great resources just like this one. Until next time, stay safe, stay healthy, and most of all stay human. Live long as prosper.

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