Inside The Ready
By: Aaron Dignan
Tags: Change Management, Organizational Culture, Self Management, Culture Change, Self Organization

In this article, I’ll show you how we work inside The Ready — an organization transformation consultancy. We’re a fully self-managing company; there are no bosses or managers, our team members set their own salaries, and we make decisions collectively. Throughout the article, we’ll share with you how we work, what we’ve failed at, what we’ve learned, and what we still struggle with.

We like to think of ourselves as a laboratory for the future of work — one that’s had the privilege of learning from dozens of companies and the broader future-of-work community. We’ve been willing to be wrong and to go to places that make us uncomfortable. We’ve redesigned the way we bring on new team members, and we’ve changed how we pay ourselves no less than five times. We’ve learned a great deal, often due to our openness to try the most radical option. If somebody has an idea to change the way we spend money, go to market, sell, or decide, we’re receptive to it.

If we suggest a client overhauls the way they decide, budget, or hire, we can genuinely say we’ve tried it ourselves.

Our history

The Ready was founded in 2015, when we had the ambitious goal of changing the way people work, namely through realizing a more adaptive, equitable, meaningful, and human way of working. We wanted to be a driving force in that sense because what we need to do as companies in the world has been clear for some time. But getting large systems to actually do it has been an uphill battle.

Our client work has taken us into IKEA headquarters, small nonprofits, the Federal Reserve bank, Boeing, and fast-growing start-ups. We’ve worked with both dwindling and thriving companies. The big takeaway has been that everybody has the same problems; from a restaurant chain in the US, to a T-shirt manufacturer in the Philippines, to a pharmaceuticals factory in the Netherlands, everybody deals with the effects of traditional top-down bureaucratic system design.

In that approximately five-year span, we fluctuated from one colleague to 25, back down to 15, and up to 25 again. We went from a single owner to a public benefit corporation with 24 shareholders; from having team members in one city to 20 cities; and from having one client to more than 80 and counting. Now we’re growing relatively fast, going from $800k in revenue in our first year to $5.9 million last year, and this year is looking even better.

Our principles

For organizations to survive in this ever-changing world, we believe they need to be both people-positive (acknowledging that people are fundamentally trustworthy, motivated, and can self-manage) and complexity-conscious (acknowledging that being able to predict or control what will happen is folly, and that plans are lies committed to paper).

These overarching beliefs act as the foundation for the following five principles which drive the decisions about how we work.

Transparency. Information symmetry among people creates a better, more human way of working within a complex system. Autonomy. People need, appreciate, and deserve freedom. We shouldn’t create environments at work that don’t reflect our beliefs everywhere else. Consent. Not consensus or autocracy, but the idea of green-lighting ideas that are safe to try, reasonable, and agreeable to the members of our organization. Decentralization. Resist the urge to functionalize or rely too heavily on centralized decision making, which could result in a central point of failure. JEDI. This stands for justice, equity, diversity, and inclusion. Although this wasn’t present in the beginning, it’s become more prominent in the impact we’re trying to have, and how we’re trying to grow our own community and prioritize what equity looks like.

How do these principles practically show up in our way of working? Below, we’ll walk you through how they’re incorporated into our approach to decision-making, staffing projects, compensation, meetings, hiring, and finances.

How we govern

Everything about the way we work is captured in an agreement, which is documented and transparent to everyone. When people have a question, tension, or an issue, they make a proposal. Everybody needs to agree to this proposal using a consent process before it may go ahead.

Currently, we have about 35 agreements, ranging from how we pay one another to how we meet to how we make decisions. Everybody’s voice has shaped these things. We’re so excited about the power of agreements that we recently spun out a software company called Murmur, designed to support this process for teams everywhere.

“Every [team member] at The Ready has the right to energize their role(s) and do their work how they want, when they want, and where they want, within the bounds of our governed agreements, and in service of our purpose. Members cannot be delegated tasks or beholden to deadlines they do not willfully accept. Members do not report to a manager or any other role. Instead, we work with each other for each other.” — from our Autonomy agreement

Something we struggle with is getting an even distribution of proposals and agreements from people who have shorter tenure, different life experiences, and different backgrounds. Even after five years, people with more tenure and informal power tend to be the ones making proposals.

How we make decisions

If you think about decisions and authority, there are two kinds of systems you can build: a permission-based system or a constraint-based system. In a permission-based system, nobody can do anything until they’ve been told they’re allowed to do it. In a constraint-based system, people are allowed to do anything until they’re told they can’t. We try to be the latter and that has its risks and rewards. On the whole, we’ve been happy with it. We’ve found that if you treat people as thoughtful and conscientious adults, they’ll behave that way.

When it comes to day-to-day decisions, decision rights are specified in roles, which can be held by one or more people. For example, those holding the “Guardian” role have the final say about our branding guidelines. In some cases, a role holder needs to seek advice from others before they can make a decision (using the advice process). People holding a “Project Steward” role, for instance, have the decision right to choose the structure, approach, and delivery of their project, but need to seek advice from the project team first.

How we staff projects

In the majority of consultancies we’ve observed or been a part of, there is either a staffing manager, leader, or a team that’s figuring out who goes with whom, on which project, and when.

At The Ready, we don’t staff projects like this. Rather, we have a two-way marketplace where everybody has a right to say yes or no to a role opportunity on a project, and every project team has a right to say yes or no to a member of that team.

If a team is unhappy with one of its members, it can ask them to step away. If a person is unhappy with the team they’re on, they can step away. This also applies to what projects we take on. Many people in consultancies are faced with the question: What are your ethics about working with this kind of company? As opposed to having one general thesis about our moral stance, we’ve found it more effective to let staff decide for themselves. When a project is presented to us, we ask ourselves if we can assemble a team of willing participants to work on it. If we can’t, it’s a no, regardless of whether it’s because people are busy, because they don’t believe in the purpose of that business, or any other reason. This means we’ve turned away Fortune 100 clients and signed up to controversial projects because one of our teams believed they could make a difference. This has brought us flexibility and integrity.

How we pay ourselves

When we started the company, people were paid a salary that was negotiated, as most companies do. Unlike most companies, however, our salaries have always been transparent to each other. Now, our approach to remuneration has evolved into a self-directed compensation stack that starts with a guaranteed base salary. This base salary is the same for everyone and can be built upon (see diagram). We’ll cover consultant rates and key role pay here. We’ll look at initiative funds further down.

Consultant rates

Team members that take on client work set their own rate, after seeking advice from the people around them. Whether it’s high, low, or just right, we look for bias and how it maps to their experience and/or level of expertise.

If one team member wants to charge $4k a month and somebody else feels comfortable charging $20k a month, we’re open to that — as long as we don’t sense possible JEDI issues influencing under- or over-payment. People who pay themselves too much are in less demand and have to either find and sell their own projects that can yield that rate or change their rate to access more work.

As questions arise about values, bias, history, and value inside The Ready versus value in the outside market, some people struggle to set their rate. We’ve learned how to talk about how to set rates so that everyone feels recognized and that they’re getting a fair deal.

Key role pay

If you’re holding one or more of our 20 internal (“key”) roles that we find especially valuable, you’re compensated for that work. As one example, we pay a monthly fee to people who enable our hiring and training processes. We learned through trial and error that although people will do this work without remuneration, the ones who do so tend to give too much of themselves, burn out, and feel under-appreciated. The things that need to be done aren’t addressed with the same high energy if they’re uncompensated. To resolve this, we started paying key roles certain fees.

Over the years, we’ve discovered how it feels to coexist in a system where money is fluid and public, everybody knows what everybody makes, and everybody can ask about it. Generally, we’re happy with our approach. It has eliminated the need to manage raises, bonuses, annual assessments, performance management, rank, and more.

How we handle money

Generally, people are allowed to spend company money. Every team member is offered a credit card without a limit.

“Every [team member] may spend up to $3,000 per trimester freely in service of The Ready’s purpose. Members may spend $3,000-$20,000 on an initiative or bet in service of The Ready, with advice from the full team (decisions above this amount trigger collective decision rights).” — from our Member role agreement

The only controlling factor in the financial system is a margin target at the project level. Each team essentially runs their project as a micro-enterprise with its own P&L.

At the end of every month, trimester, and year, we look at the numbers together to see if we’re steering the business in the right direction. The company has been profitable eleven months of every year, and every year on the whole since inception.

We pay our bills and make sure we have enough in the bank for a few months if things slow down. After that, we fund initiatives, share profits with members, and pay dividends to our shareholders (all current or former team members). What’s left over is subject to the guidance of the whole system. We make those decisions collectively.

How we hire and onboard

Over the past year, we’ve come to face the fact that a lot of bias exists in hiring. As a result, we’ve radically reinvented our hiring process. Up until a year and a half ago, The Ready was a predominantly white workplace. This wasn’t because we didn’t care about diversity. Rather, it was because we hadn’t changed our operating system to reflect that value. People tended to read over a resume, look at a face and a name, and subsequently select the people who looked like they did and seemed similar to them. We no longer find this acceptable.

Several members of our team set about reducing bias by creating an anonymized process where applicants are evaluated in new and different ways, and where we don’t know who someone is until we’re excited about the way they think about our space and what they’re capable of. This has been really rewarding and completely changed who we’re attracting, who makes it through the process, and who we’re hiring.

One thing we’ve learned through onboarding is that it’s hard to find out if someone is a good fit for The Ready using an interview process. To address this, we created a six-month period of “prologue membership.” During this time, new hires are paid the same way and can participate in all the same activities as other team members (with the exception that they cannot consent/object in our participatory governance process).

After six months, we both decide if working together makes sense. If the full members of The Ready don’t feel what we call a “hell yes” with regard to the candidate, we ask them to step away, and try to make that as financially painless as possible. Similarly, if the candidate felt like the experience wasn’t for them, they’re welcome to step away. If both sides feel mutually connected, we move forward with full membership.

What we’re still figuring out is how we part with colleagues after they’ve become full members in a way that feels fully aligned with our principles. We also haven’t mastered how to be in conflict with one another in a way that’s open, real and authentic. We’ve left this unspecified during our early days and it has boomeranged back to us at times.

How we meet and retreat

We talk a great deal about eliminating meetings and maximizing the amount of time spent doing deep work. Ironically, we’re buried in Zoom meetings because we’re invited to every meeting for every company we work with! We’ve found it difficult to have an effective meeting rhythm for the company that doesn’t add too much to our stress.

Our operating rhythm is one of the things that has moved and shifted the most in our history. We’re never quite happy with it, but we’ve surrendered to that and are always open to change. In fact, we may never get it right and that’s okay.

Our current status quo is our Friday ritual. Each Friday, we have a 90-minute meeting slot that we rotate among four themes that allow us to get things done:

Governance : for making collective agreements about roles, policies, and processes;

: for making collective agreements about roles, policies, and processes; Operations : for steering our business, growth, and hiring activity;

: for steering our business, growth, and hiring activity; OS Coffee : for diving deeper into topics proposed by participants (run as a lean coffee);

: for diving deeper into topics proposed by participants (run as a lean coffee); JEDI: for talking about how justice, equity, diversity, and inclusion show up in our work, our culture, and the issues and tensions we’re struggling with.

Since the company’s founding, we’ve gone on a retreat (our “Ready Week”) every four months, during which we pause from client work and reflect. We gather for four to six hours a day and enjoy a mix of scheduled sessions and open space conversations. During the COVID pandemic, we’ve been continuing our tradition via virtual reality! (Check out this podcast episode to find out what challenges and hilarities we faced with our VR headsets.)

How we innovate

In a company like ours where there’s no one person setting a central strategy or centrally controlling funds, we’ve had to figure out how we innovate, move forward, and create change.

During our retreat, we dig into our purpose and essential intent, where we’ve been, where we’re going, where the market is, and so on. What follows is an open discussion about what we might want to do, try, and invest our money in.

Whether you want to start a podcast, a magazine, spin out a software company, hire a trainer, serve a new client in a different way… you can propose an initiative. If the group consents to that initiative, it’s funded. The funding is yours to do with as you please as long as you’re transparent about what you did and what you learned. The people who steward those projects have the ability to pay themselves, other team members, and outside vendors to bring them to life.

Our training program for new hires was born out of such an initiative. Our colleague Ali proposed and led the initiative, built a curriculum together with other team members, and paid herself and those members. Afterward, we asked ourselves if these roles should become permanent and if we need to hire new people for them. It gives us a way to iterate and learn rather than plowing ahead with, “Let’s hire five training people and build a training department.”

During an average trimester (3x per year), we invest about ~$110k in initiatives. Whatever the amount, it’s what’s needed at that moment. Overall, this works out to be approximately two to three percent of the money we spend.