The companies thriving by burning the rulebook

Every morning, Kiera Lawlor comes in to Social Chain’s Manchester offices before everyone else. She ensures breakfast is out, that the water dispensers are full and, perhaps most importantly of all, that all the balls have been safely returned to the ball pit. Throughout the rest of the day, she’ll hold happiness meetings with the company’s staff and ensure that the 88 other staff members (average age: 23) have what they need to get the job done.

I don’t ask if she has a business card saying so, but Lawlor’s official title is “Head of Happiness”, and on the day I’m speaking to her has worked for Social Chain – a social media marketing agency – for exactly a year and a day. It’s National Popcorn Day, I’m told, and moments after our conversation the office will be filled with the sound of popping corn. “Everyone’s quite baffled by it,” Lawlor tells me via phone. “A lot of people don’t think it’s a real job. My parents just thought ‘oh that’s typical Kiera, getting a job like that.’”kiera_lawlor_-_headshot_

I first became aware of Social Chain at FutureFest, when I watched the company’s founder Steve Bartlett give a fascinating talk on his own unorthodox entrepreneurial journey. You can see a shorter TED Talk version of it in the video below, but the long and short of it is that by challenging conventional entrepreneurial thinking and trusting his instincts, Social Chain has grown to have offices in Manchester, New York and Berlin and attracted millions of dollars of funding.

“There is just one rule at the company, written in chalk on the wall: ‘Do not die.'”

“How do you keep a room full of mainly dropouts in a room together in a company?” Bartlett asks in the video above. “We know that people will work harder if they love their job – they’ll fight for it, they’ll value it, they’ll protect it. Families are stronger than teams, and if people love where they work, they’ll like coming to work.” To that end, Bartlett converted a warehouse into a playground, as well as a workplace.

Alongside the giant slide, ball pit and mummified tree that dominate the workspace, company perks at Social Chain’s office include unlimited holidays and a free bar. There is just one rule at the company, written in chalk on the wall: “Do not die.”social_chain_office_manchester_-_2

As yet, nobody has taken advantage of this generosity enough to upset the apple cart: “The culture here is that everyone works hard and wants to see the company succeed,” Lawlor explains. “Because of the respect and trust that Steve and Dom [co-founder Dom McGregor] show to us all to actually get on with our work and manage our own time, I think people are conscious that you don’t want to take the piss, really. You want to work hard and you want the company to succeed.”

The company is growing fast – when she joined in January 2016, there were 15 employees, and there are now 89. In that time, not a single person has left. The office is due another expansion – the last time they needed one, staff had to briefly work at the bar or in the ball pit. “People never leave,” she laughs.

That’s the kind of happiness that many HR departments would figuratively kill for, albeit seemingly forged with the kind of concessions that traditionalists would be extremely cautious about granting.social_chain_office_manchester_-_1

Setting your own salary

Down in London, 211 miles south-east of Social Chain, is Smarkets – on paper a very different kind of company (online betting is Smarkets’ market), but with something crucial in common: the HR rulebook has been torn up and rewritten from scratch. It too offers unlimited holidays, but Smarkets has gone a step further in challenging business orthodoxy: it’s staff, not managers, who set their own salary, and everyone’s wage is visible to all on a transparent company Wiki.

“It’s staff, not managers, who set their own salary, and everyone’s wage is visible to all on a transparent company Wiki.”

The system involves staff examining market rates, getting feedback from colleagues over their worth to the company and then justifying their value. “I think everyone assumes that if you open the salary process then someone’s going to come along and ask to triple their salary right away, but that’s not happened yet,” explains Tom Hardman, head of business operations at Smarkets.

“People are generally quite mindful of how much they’re worth; they benchmark themselves quite well. Generally there’s enough social pressure to stop anyone from doing anything that might seem outrageous. I think that’s partly because generally people are quite trustworthy – I don’t think anyone wants to work at a company where your colleagues think you’re not worth what you’re paid – nobody wants to be that person, so nobody puts themselves in that position.”smarkets_office

As a result of this, the company sometimes has to encourage employees to push for a higher salary out of fairness, and I’m informed that it’s not unheard of for employees to request a reduction. The company has now switched to salary windows to encourage people to go through their form of peer review at two points per year – but with flexibility if circumstances require it: if you have a child on the way, or are applying for a mortgage, all of this will be taken into account alongside your actual performance.

In the salary window just closed, 22 of the company’s 78 staff went through the process. “Circumstances change so quickly in London and the surrounding areas,” explains Michael Gales, Smarkets’ head of content. “We don’t want people to leave – the whole idea of this company is to hire people that are good at their job and make them comfortable here.”

“One applicant to Social Chain sent an owl flying into the office, which dropped a USB stick with a digital application on Steve Bartlett’s desk.”

“The first time we did the salary process, it was incredibly emotionally draining, because it turned into a massive feedback process,” explains Hardman. “Instead of being about ’I think you should be paid this,’ it became ’I think you did a good job on this, but a bad job on this’. It meant we came out of it with a bunch of people who got the salary they wanted, but felt really demoralised by it.” The new system should make things easier, and despite its growing pains, both Gales and Hardman seem to agree that it’s a system that’s working for the company. “It comes with its problems, don’t get me wrong, but it’s a much nicer process, and I think people feel more valued based on what they do,” concludes Gales.

Hardman was at Smarkets from early on, the tenth employee at the company, and has seen firsthand the culture shift that’s led to the unusual office structure. Its system comes from a number of sources, including Reinventing Organisations and an office culture adopted by Valve in the US. Some of it, Hardman concedes, sounds like “weird, hippy, holistic nonsense” but other parts worked for them at a time when the company was growing fast and at risk of losing touch with its startup ways. “There comes this point at around 20-30 people where the culture of the company begins to feel very different,” explains Hardman. “At that point you realise the small startup feel isn’t scalable until you do something pretty radical. We wanted to keep the leanness that came from being a small startup dominated by software developers.”

Free lunch and football tables

The transparency means that everyone is invested in the company’s future, and can help steer the overall direction of the company. Hardman mentions one employee who is always really keen to see the company accounts each month: “I really like that everyone in the company is really interested in the bottom line and how things are going.”

Like Social Chain, Smarkets has tried to nudge a sense of camaraderie in the office with an open-plan canteen area where everyone at the company has a free lunch everyday. Just beyond that are table-football tables, a pool table and three games consoles. Morale in both companies seems – from an outsider’s perspective – generally impressive, with the important caveat that both companies are young with relatively small headcounts.smarkets-6

But of course, it would be naive to think that the most uptight, corporate business could throw in a couple of beanbags and a snooker table and suddenly find morale skyrocketing – not least because this kind of company culture doesn’t fit everyone. Stephanie Davies is CEO of Laughology – a company built on making workplaces and workers happier. I ask her whether some businesses might regret using ping-pong tables and beanbag chairs as a sticking plaster to cover much more severe problems. “It depends how you use those ping pong tables,” Davies explains.

“We do quite a lot of work with Giffgaff who do have ping pong tables and beanbags – however, they use them in a really strategic way. They put them in places to make teams talk to each other and build positive relationships. The behaviours all match there – everyone from the senior leadership teams truly believes in empowering individuals and everyone having a voice.”

“Both companies have deliberately engineered close working relationships and personal autonomy, leaving employees’ career path in their own hands.”

“If you put ping-pong tables in there but your managers aren’t good at communicating, or there’s a real problem with trust in the senior leadership team, then it’s absolutely a sticking plaster.” Davies’ research at Laughology found that there are five things that tend to make employees happy and more productive: confidence in yourself and your organisation; positive relationships; support networks; coping skills; and personal development. It strikes me as I listen to Davies talk about her work that it may be the fact these basic needs are met that makes employees of Smarkets and Social Chain so happy to stay, rather than the attention-grabbing perks and environment. Both companies have deliberately engineered close working relationships and personal autonomy, leaving employees’ career path in their own hands.

That should be encouraging to managers reading this who want a happier workforce but don’t want to be interrupted by the constant back and forth of table-tennis balls. “There’s no one specific rule I would say that works, but being aware of human needs is important. I should imagine with someone like Social Chain, people don’t leave because they do have it right, and all those things work because they’ve created the right culture for it to work. But if you pick that culture up and put it somewhere else it might well not.”table_football_business

Hardman agrees with this analysis. “The general principals are good ones, but it’s different in every company how you implement it. Working in food manufacturing – it can’t be a free-for-all in that environment.”

I have no doubt that plenty of people reading this would find these kind of environments deeply uncomfortable – I personally doubt that I would fit in at Social Chain, and not just because I’d be the oldest by two years. What is clear, though, is that for the right people, these kind of environments see them thrive – whether it’s down to the more informal environment or just having their human needs met without the traditional cautious HR fluff. One applicant to Social Chain sent an owl flying into the office, which dropped a USB stick with a digital application on Steve Bartlett’s desk. Another applied through a social media account claiming she was a prisoner at one of the more traditional offices in the block, while yet another smuggled a USB stick inside a carrot into the kitchen.

“It might be the hiring process or the way we choose people, but they seem to fit right in,” explains Lawlor.

So she’s in for the long haul? “Fingers crossed, yeah.”

Images: Social Chain, Smarkets, Jon Mitchell. 

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