Venture Hacks

From The Human Equation:

“Seven dimensions that seem to characterize most if not all of the systems that produce profits through people.

1. Employment security.
2. Selective hiring of new personnel [especially screening for attributes that cannot be taught such as attitude and cultural fit.]
3. Self-managed teams and decentralization of decision making as the basic principles of organizational design.
4. Comparatively high compensation contingent on organizational performance.
5. Extensive training.
6. Reduced status distinctions and barriers, including dress, language, office arrangements, and wage differences across levels.
7. Extensive sharing of financial and performance information throughout the organization.”

The author is Jeffrey Pfeffer, a professor at Stanford. He also co-wrote Hidden Value, which we covered in We don’t pay you to work here.

Implementing the whole system

Extreme Programming works well when you implement all of its practices. Most of the practices by themselves have too many flaws to be very effective. Each practice by itself may even have more disadvantages than advantages.

But all of the practices together work well. Why? For each practice, there are other practices that obviate its flaws. Wheels by themselves just roll a bit and fall over. But when you connect them to a car, the entire system can get you from Boston to San Francisco.

The practices in The Human Equation also work well when you implement them all. You can’t offer extensive training if you plan to lay people off when times are tough. That’s just a good way to waste money on training. You can’t offer employment security if you don’t hire new employees very selectively and if you don’t terminate the ones that aren’t effective.

If you’re searching for a magic incentive system to get high performance from your team, there isn’t one. If you’re willing to do the hard work of implementing a set of simple organizational practices, The Human Equation and Hidden Value have some suggestions.