How Medium Is Building a New Kind of Company with No Managers
After Ev Williams first started working on Twitter, he reached out to Jason Stirman in Texas. “You have to come out here,” Williams said. “Twitter is happening and we want you to join us.” But Stirman wasn’t easily convinced. “I told him, ‘You want me to move for 140 characters and a button? I don’t think so,’” Stirman says. “And I’ll never forget this. Ev looked me right in the eye and said, ‘If we do this right, it’ll totally change the way the world communicates.’ I thought to myself, ‘I like you, but you’re crazy.’” He regretted his decision almost immediately, and 18 months later, when Twitter hit 50 or so employees, he made the jump.
The next time Stirman had the chance to follow Williams, he didn’t hesitate. After working at Twitter for several years, he realized the founding team was gone, retreating to their lair at Obvious Corporation to plot their next big breakthrough. He wanted in. “I quit my job, went to them and said, ‘Ok guys, what are we doing?’ Ev looked at me and said, ‘I don’t know. Want to rebuild the Internet?’” Stirman didn’t know what he meant at the time, but it sounded big. It sounded right. The result was Medium, a content platform promising to change the way people communicate — again.
But Medium isn’t just taking a revolutionary approach to digital publishing — it’s changing the way companies operate too. As one of the fiercest and most faithful adopters of Holacracy – a radical new theory of corporate structure — Medium is experimenting with a completely management-free environment that’s laser focused on getting things done. Stirman couldn’t be more thrilled with the results: the freedom, the momentum, the productivity are all unparalleled, he says. But companies don’t have to go all-in on Holacracy to reap the benefits. If his transition from Twitter to Medium taught him anything, there are always more tactics to try to make things work better. Below, he shares his lessons from taking the leap.
Traditional management just didn’t agree with me.
For two years, Stirman managed a team at Twitter and never felt quite right about it. There was always the tension between being their boss and being their peer. He read all the ‘right’ books on management and took the advice to heart: don’t get too chummy, shield your team from anything they don’t need to know, ask them to identify roadblocks to progress, reward them all equally. He hated it.
“Management perspective looks at reports as resources — like how can you get the maximum value out of this person,” Stirman says. “But when I think resources, I think like natural gas or coal mines. Thinking about a person’s life that way just seemed really dehumanizing.”
Frustrated with poor results, he decided to go off script. He started spending one-on-one meetings talking to his reports about their lives, instead of their tasks, and productivity shot through the roof. “When you sit across a table from someone, ask them ‘What’s going on in your life?’ That will always remove more hurdles than asking them ‘What’s blocking you at work?’” he said.
Whenever problems popped up, I’d totally ignore them and pay attention to the people who had them. Suddenly all these issues were just dissolving. I swear it was like a Jedi mind trick.
He started taking his reports out to lunch, to drinks, to coffee to see what was up. How was their wife settling into her new job? Did escrow close on their new house? This is the stuff that people bring into work with them but never talk about, Stirman says. As soon as you ask, the pressure starts to dissipate.
This more human approach starting paying off in other, less expected ways too. “I’d hear that someone on my team had a problem with someone on another team that brought everything to a standstill – just because they didn’t like each other. I thought, what if I just got them in a room together and we all talked about everything except the problem at hand? When we did, we got some casual conversation going, they discovered some similarities, and by the end of the hour they were talking about how to solve their issues. This was a conflict that literally kept me up at night, and as soon as there was space for them to connect as people, it was fixed. I thought, holy crap, this is a super power.”
Stirman hit another wall trying to shield his team from external drama and politics. “Classic management advice, and all my mentors told me that insulating your team from things so they won’t worry will make them more productive and happier,” he says. “But they just got angry, and confused, and disconnected. I was constantly censoring all this information and they were way happier when they knew everything.”
With these discoveries under his belt, Stirman wanted to test other theories of management. “No one ever challenged that there was a better way to do things, everything is so tied to who reports to whom,” he says. “But I’m too much of an engineer at heart. I started looking at management like a big A/B test, with a goal of making more data and results-driven decisions.” In his pursuit of new experiments to run, he stumbled on the book “Your Brain at Work,” which espouses what’s come to be known as the SCARF approach.
SCARF stands for status, certainty, autonomy, relatedness, and fairness. “Basically, when a person is honest with themselves, they’re most motivated by one of those qualities,” Stirman explains. “As a manager, you can figure out which one motivates which employee, and reward them accordingly. A lot of managers will look at their team and think, ‘We should do a round of compensation increases because everyone’s been working so hard,’ but this isn’t the best incentive for everyone.” Here’s how it looks:
- Status-oriented employees can be motivated by a possible title change, or having their name attached to more important projects.
- Certainty-oriented employees are motivated simply by the reassurance that their job is important and they are excelling.
- Autonomy-oriented employees may need the ability to work from home, or simply slip on their head phones to tune everyone else out.
- Relatedness-oriented employees are energized by opportunities to socialize with their coworkers — happy hours, softball games, etc.
- Fairness-oriented employees want to know the playing field is even, and they aren’t being exploited or cheated. They need to hear it consistently.
“It turns out that some people really care about one and don’t really care about the others,” says Stirman. “Once I had my team stack rank their priorities, I knew exactly how to reach them. All the little problems and personality clashes started to fade."
This willingness to break ranks with corporate wisdom set the stage for Stirman’s arrival at Medium, where clear communication, incentives, and accountability are the invisible wires keeping the organization sailing along.
Holacracy from Scratch
Medium adopted the Holacracy model about a year ago. Calling it “hands down, by far the best way I know or have ever seen to structure and run a company,” Stirman says. He’s especially drawn to the strategy’s crystal clear minimalism and logic. “It’s basically an operating system for your organization, so the engineer in me loves it. In fact the Holacracy organization just released 4.0 of its constitution, so our company is upgrading — just like you would update to a new iOS.”
Here are some of the key tenets that Medium embraces:
- No people managers. Maximum autonomy.
- Organic expansion. When a job gets too big, hire another person.
- Tension resolution. Identify issues people are facing, write them down, and resolve them systematically.
- Make everything explicit — from vacation policies to decision makers in each area.
- Distribute decision-making power and discourage consensus seeking.
- Eliminate all the extraneous factors that worry people so they can focus on work.
“The structure is totally built around the work the company needs to achieve its purpose,” Stirman explains. “We don’t have a hierarchy of people, we have a hierarchy of circles.” For examples, the Reading and Discovery (or RAD) circle, containing roles dedicated to the site’s reading experience, is nested inside the Product Development circle, as is the Creation and Feedback circle, which is all about the content creation process. In this instance, the Product Development circle can review the results coming out of the nested circles to steer the product in a particular direction. Every member of a circle has a purpose that connects to the broader circle’s purpose, which connects to the company’s purpose, so everyone is always pulling toward the same promised land.
“At Twitter, the purpose changed a few times, from building a cool product to making it popular to making it a sustainable business, and changing the world somewhere in there too,” Stirman says. “I ended up feeling like my job was very disconnected from the higher-level purpose, and I know others on my team felt the same way — it was hard to connect the dots."
To help with this, instead of a focus on employees, there’s a focus on roles. Each circle has a ‘Lead Link’ who determines what roles the circle needs and how they get assigned. In fact, one person can hold multiple roles if their bandwidth and expertise allows. Stirman is both the People Operations lead and Word Master (which comes with final say on punctuation and capitalization, among other word-based dilemmas). This way, people can build versatile roles for themselves that speak to their whole skill sets — not just a single ability.
This role-centric organization also optimizes for number of ideas and strategies tried, while also keeping a tight grip on what gets shipped live. For example, there’s a single role titled 'Product Strategy', currently filled by Ev Williams himself, which decides which features go public. But, teams like RAD get to decide which ideas actually get prototyped and built.
Once there’s too much work for a particular role, it can evolve into a circle with multiple members to shoulder the load. “In a traditional company, the structure doesn’t change based on the work,” Stirman says. “You see a lot of companies trying to force the work they have into their existing structure, and that can get messy.”
This emphasis on organic growth has a side benefit of distributing authority. In Holacratic systems, individuals operate without managers because many of them have decision-making power in a particular area. And since everything is made as explicitly as possible, everyone in the organization knows who has authority over what. “It’s much better to have power distributed as widely as possible so more people can make more decisions to move forward,” Stirman explains. “This structure leads more toward moving fast, trying new things, and adjusting as needed. You don’t have to wait for everyone up a ladder to sign off. This can take weeks or months, when Holacracy says, ‘You know what, we’re going to hire the best people we know and trust them to make decisions for us.’ All day people make decisions, own parts of the company, and act on them. The momentum this creates far outweighs someone making a bad decision. You also have the momentum to change course quickly.”
Decision-making is further aided and hastened by airing ‘tensions’ in meetings. Stirman defines this use of tension broadly, calling it “any difference between what is and what could be.” In this sense, tensions can be negative (e.g. I don’t have time for that project, my chair isn’t ergonomic, etc.) or positive (e.g. I have a vision for a feature we should create). Tensions are resolved in tactical meetings where every attendee either shares a tension or passes. This way, everyone is encouraged to speak up if they have a problem or see an opportunity.
“The difference between Holacracy and traditional management is that when you have people at the bottom and people at the top, it’s always the people at the top trying to figure out their tensions, then they have the people at the bottom resolve them,” Stirman says. “No one takes into account the tensions, ideas, issues felt by the people at the bottom. They spend their days resolving tensions they don’t have and may not even understand.”
In tactical meetings, a trained facilitator builds a list of tensions that people throw out to the group, and the remaining time is used to resolve them as much as possible. This doesn’t mean solving major problems. It’s about identifying the next right step to a solution. “If I’m a guy who says a button should be green instead of red, in a typical meeting, that conversation could go on for hours, days, weeks without clear action,” Stirman says. “A small workable solution would be for me to schedule a meeting with our visual designer.”
For Stirman, even before he heard of Holacracy, tensions were always easy to identify, but not easy to solve. “Once you identify what a tension is, you can feel it in your shoulders, in your ears. You know you’re worried about something. Now, when I identify a tension, I jot it down. If I can’t resolve it by myself, I bring it to my circle’s next tactical meeting. With these meetings, you’re always making things a little bit better.”
How to Think Holacratic
There’s a lot to like about Holacracy when you compare it to classic management frameworks, Stirman argues. He has firsthand experience. “When I think about my role at Twitter as a manager, I had tensions all the time. And my team didn’t even have that many problems,” he says. “Still, between all the teams he oversaw, my manager was constantly putting out fires. No one had the time or interest to resolve my tensions. Now, the way we use Holacracy, people are genuinely happier, they feel listened to, and connected with the organization.”
For companies looking to reap these benefits by injecting the spirit of Holacracy into their existing format, Stirman has a few key suggestions:
His focus on hearing people out about their personal lives and problems at Twitter is a prime example. It closely resembles a safe space to air tensions. In fact, he wishes he would have formalized his more personal, human approach so that people would have known they could share freely instead of carrying their issues around.
Holacracy encourages people to work out their tensions and issues one-on-one or outside of meetings if possible. Given the rampant explosion of meetings in corporate environments (so much so that there are meetings about having too many meetings), this is an increasingly important tip. Tension meetings are defined as opportunities to air issues that couldn’t be resolved elsewhere. People should only address the group with topics that actually need others to weigh in or help find a path forward.
Establishing mutual accountability can make a highly tiered workplace feel flatter, and more engaging. In addition to informing his reports about what was going on throughout the company, Stirman wishes he would have shared his own list of tasks and concerns with the people on his team. That way he would have been accountable to them too and made them feel less managed. “At Twitter, there was this common power dynamic where my reports felt accountable to me to get their work done and I felt accountable to the guy above me. It would have been good to be more forthcoming."
Most of the time, you know your manager’s responsible for firing you and how much you get paid. I wish I would have sat down with my reports and said, “You know what, here’s what being a manager at Twitter actually means, and here’s a list of the decisions I have the authority to make. I wish I would have broken that power dynamic, and been a better leader as a result."
Hand in hand with this, it’s a great idea to run some of your own problems by your reports to see if they can weigh in. “At Twitter, I was constantly burdened by my team’s problems, and I think most managers are,” Stirman says. “I wish I had empowered my team to solve their own problems, and mine. I wish I would’ve asked them more questions, been more creative about surfacing problems for them to solve to make our work better. I found myself scared to tell my reports ‘I don’t know’ whenever they asked me something, and in hindsight, I had this awesome team of smart, capable people who were energized by solving problems. Turns out individual contributors love to be asked for help. A lot of them want to take that buzzer beating shot. They want to be the last guy up at the plate. It gives them a chance to be a hero and to flex their muscles. And in the end, it builds more trust in me as a leader because I’m not filtering out questions I can’t answer.”
Hiring in Holacracy
Given the decision-making power of the average employee in Holacracy, you’d think the interview process would be fairly unique, or at least intense. But Stirman says it doesn’t have to be that much different than average — making it possible for more typical companies to hire in Holacratic fashion.
“When you interview someone, it’s pretty easy to tease out if they take the initiative to solve problems or take on projects — or if they’re simply better at being told what to do. Both are great kinds of people, but I’ve found most fall into one category or the other,” says Stirman. “I generally ask, ‘Tell me about a project you’re really excited about.’ The self-starters will talk about a problem they found and how they solved it. The people who aren’t will say, ‘My manager came to me and said can you build…?’ Right away you can tell. And for our kind of organization, having to be told what to do just isn’t a great fit.”
Don’t underestimate culture fit in hiring. This is something Stirman can’t emphasize enough, especially if you’re looking to adopt a more Holacratic mindset. “You want to make sure you hire only people you wouldn’t mind getting stuck in an airport with,” he says. “So many people fall into this trap of hiring highly skilled people who are bad culture fits. And I’d argue that’s the worst kind of hire — even worse than a poorly skilled person. If they’re as skilled as you think they are, they’ll gain power, influence and get more deeply enrooted in your technology, process and product. Then, when the honeymoon of your justifications is over and reality sets in, you’re seriously stuck with this person.”
The Missing Piece?
“In theory, Holacratic systems should scale much better than traditional organizations because circles can expand and divide infinitely based solely on the work that needs to get done,” Stirman says, acknowledging that this is indeed, just a theory, as Medium is only at 40 people right now.
In fact, the Medium team has already discovered something missing from the system: praise and feedback. “Managers are usually responsible for giving people feedback, directing them, telling them good jobs, and all of these things are super important to a healthy environment. You need someone to call you out or validate you when you’ve worked hard,” Stirman says.
Even so, the founding team at Medium decided to take a Holacratic approach to the problem. “We created a few roles responsible for giving people regular feedback,” he explained. “This is where we’re starting to skirt the lines of having people managers, because it certainly sounds managerial, but these roles aren’t responsible for people’s work. It’s more of a mentor relationship than a managerial relationship.”
These roles are called ‘Domain Leads’ and are filled by experienced members of various circles like design and engineering. In addition to mentoring, they’re also largely responsible for hiring and firing. They work closely with the ‘Lead Links’ who define and fill roles in their circles to assess performance. “Domain leads are responsible for the people, not the work,” Stirman says. “It’s something we’re trying out.”
To supplement this tactic on the positive end, the company also introduced a ‘High Five Machine’ — a dashboard where anyone can write in and praise a co-worker, streaming throughout the office. It’s an invention borne out of Holacracy, spun out of the unique needs this kind of system creates.
“We’ve already learned a lot, and I’m so glad we’re experimenting,” Stirman says. “No one knows the future, but now when I hear about the way things should be done, or someone saying ‘here’s how it’s always been done,’ or any Management 101, I’m like ‘screw that.’ We may be doing things differently just to be different sometimes, but it’s also allowed us to embrace so many new things.”
(Photography by Helena Price)
Read These Next
How to Win as a First-Time Founder, a Drew Houston Manifesto
In 2007, Drew Houston flew to San Francisco determined to find a co-founder for Dropbox. At the time, it was just him. No backers. No team. On a friend’s advice, he walked into Y Combinator’s offices unsolicited to talk to Paul Graham about finding the right person. It didn’t go well. “It wasn't a great experience, coming in unannounced,” Houston recently told students in an exclusive Dorm Room Fund interview at MIT. “Getting into Y Combinator is like getting into a great school. So imagine having your two minutes with the dean of admissions and them coming away thinking you’re an asshole. That plane ride back was the worst. No co-founder. Lower chance of getting into YC. I was panicked.” The good news is, early founders can turn things around. Soon after he thought it was all over, Houston teamed with fellow-MIT alum Arash Ferdowsi and made it into YC. Today, he’s led Dropbox to nearly 200 million users — and the company’s growing faster than ever before. This hasn’t been a piece of cake, but Houston’s rocky start did teach him to forge ahead and throw out assumptions that discourage many would-be founders. Looking back, he recommends six strategies that helped him cut through the fear, drown out the noise, and make it happen.
The Right Way to Grant Equity to Your Employees
Andy Rachleff is President and CEO of Wealthfront, a software-based financial advisor. Prior to Wealthfront, Rachleff co-founded and was general partner of Benchmark Capital. He also teaches courses on technology entrepreneurship at Stanford Graduate School of Business. Follow him on Twitter @arachleff. “The defining difference between Silicon Valley companies and almost every other industry in the U.S. is the virtually universal practice among tech companies of distributing meaningful equity (usually in the form of stock options) to ordinary employees. Before companies like Fairchild and Hewlett-Packard began the practice fifty years ago, distributing stock options to anyone other than top management was virtually unheard of. But the engineering tradition that spawned Silicon Valley was much more egalitarian than traditional corporate culture.” — Steven Johnson, The Peer Society
Fight Like You're Right, Listen Like You're Wrong and Other Keys to Great Management
A psychology study at UC Berkeley broke students into groups of three, with one person chosen to be the leader of a project. At some point, the researchers would bring in a plate of four cookies. "We all know the social norm is not to take the last cookie," says Robert Sutton, management expert at Stanford's School of Engineering. "But the research showed consistently that the person in power would take that fourth cookie. They even tended to eat with their mouths open and leave more crumbs. And this is just in the laboratory. Imagine that you're a CEO and everywhere you go you're empowered, and everyone is kissing your ass. You can start to see why it's so hard to be good." Made famous by his 2005 book The No Asshole Rule, Sutton has spent hours studying the moves made by technology's top leaders, including Steve Jobs, Andy Grove, and others. More recently, though, he's turned his attention from negative qualities to what the best bosses in the world do and understand. A lot of it has to do with an innate sense of human emotions, but the good news is management can be learned. In this Stanford Entrepreneurship Corner Talk, he breaks down what it takes to become a great boss — which, as it turns out, makes a much bigger difference than you might think.