Recognize the difference between complicated (predictable, cause-and-effect) and complex (unpredictable, dispositional) systems, and avoid applying complicated solutions (checklists, Gantt charts) to complex problems (culture, teams).
Explicitly choose and define whether your organization will operate as a ‘permission culture’ (ask before doing) or a ‘constraint culture’ (do anything unless forbidden), as this forms the bedrock of decision-making.
Implement a ‘constraint culture’ where individuals are free to do anything unless explicitly forbidden, with the organization’s role being to clarify the boundaries and edges of acceptable action through agreements and policies.
Ensure continuous feedback at all levels (person-to-person, system-to-system, marketplace-to-marketplace) as it is the ’lifeblood’ for dynamic steering and staying connected to reality.
Minimize the distance and time between actions and feedback to stay connected to reality, enabling effective steering and problem-solving.
Ensure feedback comes directly from customers and the market, not solely from internal sources like bosses, to avoid serving the ‘wrong master’ and getting stuck in inauthentic feedback loops.
Cultivate the judgment to know when to deviate from procedures to do what is ‘right,’ even if it’s harder to defend, rather than always choosing the easily defendable but potentially wrong path.
Cultivate an environment of psychological safety where individuals feel secure to take interpersonal risks and express ideas without fear of undue criticism or job loss, as this leads to higher team performance.
Shift the perception of failure from a negative outcome to a ’noble failure’ that is understood and appreciated as a necessary ingredient for learning and growth within the organization.
Redefine leadership to focus on ensuring continually growing capability within the team or organization, rather than solely on achieving perfect execution of tasks.
Build systems that prioritize continuous learning, even if it means making trade-offs in short-term performance, to ensure long-term capability and growth.
Prioritize long-term bets (e.g., seven years or more) in business strategy, as most competitors operate on short-term (quarterly) horizons, giving you a competitive advantage.
Shift focus to longer time horizons for commitments, beyond quarterly or short-term returns, to foster sustainable community and societal well-being.
Define and operate by clear organizational principles (beliefs about how the world works and how to operate), rather than just abstract values, to provide foundational infrastructure and guidance.
Operate with a principle of defaulting to transparency, making information public unless there is a clear, rational reason for it to remain private.
Establish a principle of individual autonomy, granting people control over their work life and tasks unless a specific agreement dictates otherwise.
Integrate transparency into daily operations by making default tools and processes (e.g., public Slack channels) openly accessible, shifting private communications to public by default.
Actively question the instinct to keep information private by asking if there’s a rational, viable reason for it, which can significantly reduce unnecessary secrecy.
Leaders should be willing to openly share difficult situations or challenges with their team, even without a pre-existing solution, as this can inspire people to rise to the occasion and collaborate.
Employ consent-based decision-making, especially in early business stages, focusing on whether a proposal is ‘safe enough to try’ rather than requiring full consensus.
For collaborative decisions, set the bar at ‘safe enough to try,’ meaning all involved tolerate the proposal and believe it’s intriguing enough to potentially learn from, rather than requiring it to be everyone’s preference.
Create roles as explicit agreements that clearly outline the purpose, responsibilities, and, importantly, the decision rights associated with that role, concentrating authority where needed.
In a constraint-based culture, define roles to ‘concentrate authority,’ meaning only that specific role can make certain decisions, rather than granting new permissions.
When confusion or debate arises within an organization (e.g., about priorities or standards), create new agreements to clarify the situation and establish clear constraints.
Adopt a ‘default’ approach (e.g., ‘if you don’t know better, try this’) rather than strict ‘standards’ or policies, especially for tasks where innovation and adaptation are valued.
Follow the Shuhari model for skill development: first, learn and follow the rules (‘Shu’), then occasionally break and improvise (‘Ha’), and finally, innovate and create new rules (‘Re’).
When deviating from a default, clearly announce the change and the rationale, and commit to reporting back on the outcomes to foster learning and adaptation within the team.
Adopt a ‘barbell strategy’ by making safe, default bets for most operations, while allocating a smaller percentage (e.g., 10-20%) for experimental deviations, then incorporate successful learnings back into the defaults.
Start every major meeting with a ‘check-in round’ where everyone answers a simple question in turn, ensuring equal participation from the outset and disrupting traditional meeting patterns.
Implement ‘rounds’ during meetings for questions, suggestions, or objections to ensure equal talk time and participation from all members, preventing any single person from dominating the conversation.
Strive for equal talk time among team members during discussions, as this increases the quality of decisions and participation, and is a strong predictor of team success.
Actively seek and integrate multiple perspectives on a problem to gain a more accurate understanding of reality, especially in complex situations where a single viewpoint is insufficient.
Take the opportunity to gather advice and understand the broader context before making a decision, especially when a bigger picture perspective is beneficial.
Recognize and utilize your inherent freedom to make decisions and take action, rather than constantly seeking permission or blaming the system, and be prepared to deal with the consequences.
Learn to differentiate between ‘one-way door’ (irreversible) and ’two-way door’ (reversible) decisions, understanding that most decisions are not final and can be rolled back.
Embrace an iterative mindset for decision-making, recognizing that most choices are not final and can be adjusted or reversed.
Develop proposals for decisions with a clear structure, including context/tension, recommendation, risks, assumptions, alternatives, and methods for evaluating success, rather than making impulsive choices.
Regularly look back and analyze the outcomes of significant decisions (e.g., M&A activity) to learn what worked and what didn’t, rather than moving on without reflection.
Adopt a product-oriented approach to decision-making and culture design: listen to stakeholders, make bets, implement, instrument for data, study outcomes, and iterate.
Regularly conduct retrospectives as they offer ‘free learning’ opportunities, even if initial resistance exists, as participants consistently find them valuable for improvement.
Cultivate a culture of authentic and continuous communication to ensure a free flow of information, preventing tension and clenching during formal retrospectives.
Conduct ‘hot washes’ or micro-retrospectives after every engagement or major milestone to quickly capture observations, standout points, and immediate improvements for next time.
Design retrospectives with challenging and provocative questions to stimulate profound conversations and deeper insights, rather than relying on stale or boring prompts.
Focus retrospectives on the collaborative conversation, grouping, theming, and collective sense-making of observations, as this process is more important than individual inputs alone.
Facilitate retrospectives to encourage ‘burstiness’ in conversation, where people are excited to share and even talk over each other, indicating genuine engagement and sense-making.
Ensure that insights from retrospectives are operationalized and lead to concrete changes in processes or agreements, rather than being left to ‘die on the cutting room floor.’
Channel insights from retrospectives into the governance space by proposing new agreements or modifying existing ones, thereby changing the fundamental ‘fabric’ of the company or team.
Actively and ruthlessly work to eliminate bureaucracy within an organization, as it happens unless intentionally removed and few have an incentive to do so.
For simple, predictable problems with clear optimal solutions (e.g., moving items quickly), use command-and-control or hierarchical methods to optimize for speed and efficiency, rather than brainstorming.
In immediate emergencies or chaotic situations, establish clear command and control to enable quick, unified action, as there is no time for consensus-building.
Be cautious of rigidly defining every process and rule too early, as this can eliminate space for human judgment and creativity, leading to static organizations.
Do not overreact to isolated incidents by immediately creating new policies or procedures; instead, wait for patterns to emerge before systematizing to avoid unnecessary bureaucracy.
Understand that when a metric becomes the sole goal, it ceases to be a useful measure, as people will optimize for the proxy rather than the underlying reality it was meant to represent.
Be cautious of organizations that constantly publicize their values, as this can be a sign that something is unhealthy or that the stated values are not genuinely practiced.
Promote positive cultural change through consistent behavioral modeling and storytelling, allowing patterns to emerge fluidly, rather than relying on static declarations like posters or pillars.
Understand that strict adherence to procedures can circumvent individual judgment, leading to situations where wrong outcomes are produced without accountability, as individuals can claim they ‘followed the procedure.’
Implement spending constraints that require seeking advice only above a certain monetary threshold (e.g., $10,000), trusting individuals to use their judgment for amounts below that, as if spending their own money.
Consider electing individuals into roles rather than simply appointing them, fostering a more radical and collaborative approach to staffing.
If a role holder underperforms or fails, propose changes to the role’s agreement, its powers, focus, or even elect a new holder, leveraging available levers for adaptation.
Recognize that even in permission-based cultures, individuals often underestimate their actual power and ability to make decisions or influence change.
As a team, identify and list all decisions that can be made autonomously without external permission, as this often reveals a larger scope of control than initially perceived.
Start operating differently within your team, and allow the positive results to organically attract curiosity from other teams, creating opportunities to share experiments and inspire broader change.
As an individual contributor, assess whether leadership is open to new ideas; if not, and if privileged, consider making career choices to find an environment more aligned with desired practices.
When seeking new roles, shift interview focus to understanding if a company operates as a ‘permission’ or ‘constraint’ culture, aligning with your preferred way of working.
As an individual, share examples of companies successfully using alternative organizational models to spark curiosity and help others recognize patterns for change.
Share ideas and look for leaders, within or outside your direct reporting line, who are also interested in alternative ways of working, as this ‘spark’ can initiate significant change.
Understand that a surprisingly small percentage of an organization (as low as 5%) can be enough to initiate significant cultural and operational shifts.
Focus on materially changing how your immediate group (e.g., 150-250 people) works, as this can start patterns within the business and spread new ideas as individuals move to other roles or companies.
Recognize that ‘big companies’ are effectively collections of smaller groups (around 150-250 people, Dunbar’s number); focus your efforts on changing the culture and environment within your immediate working group.
Recognize that organizational evolution doesn’t have to follow a path from chaos directly to bureaucracy; challenge this false choice to avoid losing your way.
When acquiring innovative companies, avoid conforming them to your existing operating system, as this squashes their creativity and judgment, perpetuating a ‘doom loop.’