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