We’ve been hearing about organizational Culture since the late nineties. Very powerful tech companies have adopted this philosophy such as Twitter, Google, Facebook, Netflix and others.
Culture is not only about perks, but it’s a strategic business model that any organization can implement to increase their revenue and grow. Still, the biggest challenges company leaders face, is fear. Fear of the unknown, fear of the different.
In this episode of the People & Business Podcast, you will hear from Traci Fenton, Founder and CEO of WorldBlu. WorldBlu is the largest global network of companies committed to freedom and democracy in the workplace.
In this podcast Traci discusses what it takes to build your own company culture and how it can lead to a successful business.
References Shared in this episode
- 10 Principles of organizational democracy
- The most democratic companies of 2016 WorldBlu list
- How to practice Open book management
- Human Centered Design Workshops at Nearsoft
- The Power Question challenge
Ask Us Anything
Founder and CEO of WorldBlu.
WorldBlu is the largest global network of companies committed to freedom and democracy in the workplace, with clients in over 80 countries globally. Traci developed the groundbreaking Freedom at WorkTM model and frequently coaches leaders of companies worldwide working to embrace a more freedom-centered model.
[1:35] What does it take for a company to build a democratic culture?
Well we found that in general culture is the outgrowth of the systems and processes that you have in place and the core values that guide the behavior within those systems and processes.
“The way you get things done combined with the behavior is what it makes a culture”
We use the word democracy. We define what we call organizational democracy as based on ten principles. And those principles are things like accountability, transparency, choice, dialogue and listening. Those ten principles that really define what democracy is grew out of a decade of research.
When we talk about a democratic culture, what we do with companies worldwide is we work with them to take those principles and operationalize them in a way that makes sense for the company size, for its trajectory and for the goals that it wants to achieve. We look at the principle of accountability. Or we look at the principle of transparency and we say, how can this work in your company in a constructive and freedom centered versus control and fear oriented way?
By doing that consciously and intentionally, you can design a very high performing world class democratic culture.
[3:40] Best practices of companies with democratic culture
One of my favorite best practices is by a company called Nixon McInnes in the UK. And they implement the principle of reflection and evaluation which is one of the democratic principles by doing something they call the happy buckets.
And what they do at their workplace, they are a small company of about 20 people and when people walk out the door every day, there are three buckets. There is a bucket full of tennis balls. There is a bucket with a smiley face at the bottom. And there is a bucket with a frowning face at the bottom.
You pick up the tennis ball and you drop your ball in which bucket that corresponds with how you feel that day. Do you feel happy or not so happy?
It’s a great way to sort of capture a quick temperature on how people are feeling at the company. They track those results over time and they notice how it corresponds with productivity, with sales growth, with morale, with culture etc.
So there are so many fun and great practices out there that’s so simple. I know companies that have taken that idea and modified it if they are larger and find other ways to implement practices like that.
[5:11] Differences between perks and culture best practices
When we talk about practices, it’s not about [inaudible] do you have foosball tables, can you bring your dog to work, and can you wear jeans on Fridays? Or do employees get free lunches?
Those are perks. Those are what we call fake freedom. They aren’t actually giving power to the people.
A lot of our companies.. A company called Dream House, they vote for their CEO. So it is things like voting for your CEO. It is things like Happy Buckets. It’s open and transparent town hall meetings that happen on a regular basis. It’s employees getting a real say in the decisions that impact them. It’s being open and transparent with the financial information, that’s called open book management.
The whole goal here is it might feel scary some of these things, is to address the fear, open it up because freedom and democracy creates the optimal conditions for success.
[6:07] How do we know that freedom and democracy in the workplace actually works?
What we did was a ten year study and what we found was during that timeframe, SP500 companies had 15% revenue growth. WorldBlu certified freedom centered companies that are actively implementing a framework of organizational democracy had 103% revenue growth.
So almost 7x the revenue growth of the traditional model companies in the SP500.
So these ideas of not just culture but a very intentional and strategic plan for how to implement a democratic culture in your workplace really truly produces bottom line results.
[7:00] What are the challenges most companies face when building a democratic culture?
“The two biggest challenges companies face is leaders’ fear and self worth”
Number one is fear. Because when we think about being open and authentic and giving power to other people, there is all kinds of fear that comes up.
Now of course we are going to be wise. If we are opening up the books, we are going to educate our employees on how to read the books so that they can make smart and informed decisions based on that. It’s not about the reckless freedom, throw everything to the wind, anarchy, laissez faire. Freedom requires a tremendous amount of discipline. But fear is going to come up, so we have to know how to address it.
The other challenge that comes up and it took me a long time, it took my team and I a long time to figure this out, is an issue related to leadership. And the issue is self worth. And self worth is loving ourselves and being comfortable with ourselves. And it’s different than arrogance or it’s different than over confidence.
What we have found is that leaders of companies that have high self worth, they are comfortable with who they are, they are usually humble, they usually have a natural sense of joy. When they are comfortable with their own self worth, they are much more receptive to the idea of freedom and democracy because they want to see everyone accel.
Individuals who are insecure with themselves and are in leadership positions and do not have high self worth, feel very threatened by democracy.
So leaders who maybe don’t feel secure with who they are, if they want to work on it, that’s great and they are going to be able to build these kinds of thriving cultures. But if not, I’m sorry to break it to you, it’s not going to go forward.
So being able to actively address fear and being comfortable with yourself or being willing to at least work on becoming more comfortable with who you are, those two things are either going to make or break the path towards freedom and democracy in the workplace.
[9:35] Freedom at Work model evolution
Originally I started off with really understanding what democracy was and worked with that and worked with that with the companies. And then about five years ago when I sat down to work on my book, I thought I’m going to write about these ten principles, tell the stories, no problem.
And as I got into it, I realized wait a second, there is another level here. And that other level has evolved into what we now teach called the Freedom at Work model. And this is in comparison to the Fear at Work model that most companies and individuals unfortunately have to work in every day.
So this has evolved from just being about the ten principles into what we’ve developed called the Freedom at Work model — mindset, design and readership.
[10:55] How did you defined you own company culture?
When I first started WorldBlu it was just me. But we grew over time, we are a small company, there is about ten of us and we are located all over the world. We all actively work. We sat down together and we wrote out our core values. We wrote out our purpose and vision statements which we use actively. Our purpose is to elevate the human spirit through Freedom at Work.
Our vision is to see one billion people living, leading and working in freedom worldwide. We wrote those together, we wrote our core values.
[11:47] How to hire for a freedom centered culture
We’ve really learned over time how to hire for freedom center culture at WorldBlu. And we look for people who know their purpose and vision. We look for people who align with our values. We look for people who have high self worth and we ask in our interview process on a scale of 1 to 10 with 10 being the highest, where is your self worth? Are you comfortable being open? Are you comfortable taking authentic feedback and being authentic yourself?
When you hire mature, talented, high self worth people, let me tell you it’s so fun to practice democracy in the workplace together.
[12:26] Defining company core values with a remote team
We are so used to working remotely it’s just how we are. And it’s fun, we don’t really have challenges.
But what our process was, we asked everyone, we said write out what you think our core values are. Everyone emailed those in and then we looked for themes and we got everyone on Skype together. And we just said what are the themes that we see?
And then we grouped those themes and we had really good rigorous conversation around what those core values would be and it wasn’t Traci’s opinion, it was everyone. And it was really important to us that we did use consensus based decision making on this. So we wanted everyone to feel thumbs up. We’d go around and we are like, ‘Are you thumbs up, middle or down?’
And if anyone was middle or down, we’d hear their point of view. And sometimes it was like, ‘That’s a good point. We should bring that value in instead.’
It was a really awesome team building process. And we have ten core values that guide our behavior within our democratic culture at WorldBlu.
I think in our mind we just used the framework of democracy. But I think you are right, when you are doing human centered work, that is democratic.
I feel that sometimes we come up with a lot of different words for what’s really democracy. And we all want to live in freedom and democracy and yet sometimes we get scared when we hear the word democracy applied to business.
“You can’t achieve your fullest purpose and potential in an environment of control and fear”
So at some point more and more companies are going to have to realize that this is inevitable, particularly with the technology that’s driving us into a more and more democratic age.
[17:00] What advice would you give to companies trying to build or redefine their culture in a more democratic way?
The first step really is about mindset and it’s about becoming very conscious of what’s driving our decisions in the workplace. Fear or freedom?
So what I encourage leaders to do, employees to do, is become aware, pick out a challenge. What I do, we have a practice called 30 days of the power question. We do it at WorldBlu all the time. I do it almost every single day as a daily practice. I’d pick a challenge that I’m facing, small to large, and I apply the power question.
What would I do if I weren’t afraid?
When we do that and we become very intentional, that helps us notice when other people are functioning in fear and we are able to help coach them and use the power question to lift them out of it.
And then what happens and the research proves this, is that we are able to make better decisions. Because when we are in fear, the peripheries of our brain shut down and we become myopic and we aren’t able to make as good of decisions.
So just starting with cultivating a more freedom centered mindset is a great place to start. And from that, naturally over time the behaviors are going to drive different design decisions and different ways of leading.
[18:51] Benefits of a democratic workplace
We hear companies complaining about loyalty and turnaround and all the millennials don’t want to stay. Autonomy is a big buzzword right now.. People want autonomy but they also want community and connection and that’s what democracy does.
“When you give empowerment to your people and when they really feel a sense of freedom, there is a tremendous loyalty that happens to a company”
When you do that, you are able to attract the best and brightest talent and retain it at your workplace.