Lane Becker and Thor Muller have a new book out about the importance of harnessing serendipity — making your own luck. Becker explains why startups are better positioned to do so than established businesses in an interview with the New York Times’ Nick Bilton:
It’s a problem for start-ups as they grow and become a traditional business, because most businesses succeed through repetition, process and routine. But all of those things are designed for rote predictability. So we engineer our businesses to squash the role of serendipity inside their organizations. Even start-ups, when they get big, and they stop listening to your users, fall into a process of repetition.
I was struck by this explanation because today I also read Michael Abrash’s blog post on what it’s like to work at the game company Valve. It sounds like Valve is structured to cultivate serendipity in exactly the way Becker describes:
If most of the value is now in the initial creative act, there’s little benefit to traditional hierarchical organization that’s designed to deliver the same thing over and over, making only incremental changes over time. What matters is being first and bootstrapping your product into a positive feedback spiral with a constant stream of creative innovation. Hierarchical management doesn’t help with that, because it bottlenecks innovation through the people at the top of the hierarchy, and there’s no reason to expect that those people would be particularly creative about coming up with new products that are dramatically different from existing ones – quite the opposite, in fact. So Valve was designed as a company that would attract the sort of people capable of taking the initial creative step, leave them free to do creative work, and make them want to stay. Consequently, Valve has no formal management or hierarchy at all.
It’s brilliant when it works. I think that Becker is wrong, though, when he says that repetition, process, and routine are the enemies of serendipity. Building the wrong kinds of structures and processes have been responsible for crushing serendipity in many organizations, but the right kinds of processes (or if you prefer, habits) are necessary parts of maintaining the possibility for serendipity as a company grows.
For example, from an engineering standpoint, Etsy’s core practice is continuous deployment. Regardless of whatever else is going on, developers are always testing code, checking it in, and pushing it to production, many, many times a day. It’s that process that enables the company to continue to rapidly iterate even though the engineering team is growing. The process for pushing code is rigid and everyone follows it every single time they need to deploy something. It’s that process, though, that liberates people to be creative as individuals.
I’d be willing to bet that Valve has any number of processes or ingrained habits that serve the same purpose. People there obviously understand how to form teams without being told what to do. They have a common understanding of how Valve writes software that enables them to contribute to any project that the company is working on. Valve creates software that ships in big monolithic releases — engineers there clearly understand what’s expected at each phase of the project so that they can ship.
Of course, I’m responding to one short paragraph from the interview — I haven’t read the book. I think, though, that from a distance people look at creative companies like Valve or GitHub (which I plan on writing about some other time) and think mostly about the liberties people are allowed to take. My guess is that in large part, their success derives from the adherence to norms that are deeply embedded in the cultures of those organizations. Because the team members voluntarily adhere to those norms, they don’t stifle individual creativity.
If this sort of thing interests you, check out the book — Get Lucky.
People are your competitive advantage
Stephen O’Grady has a piece today, Software is the New On Base Percentage, which proposes that effective use of software is no longer a way for a business to gain a competitive advantage, but rather the price of entry for being a viable market participant.
It begs the question, how does a company gain a competitive advantage these days? My argument would be that the most effective approach is to recruit and retain creative people, and to free them to do their best work. I think this is the real lesson for any business in the Valve employee handbook. Yes, I’m talking about it again.
Valve’s employee handbook is, as much as anything, a recruiting tool. It’s a promise that if you have good ideas, nobody at at the company is going to stand in your way. That’s a great pitch.
At Etsy, we find that the people who are the easiest to recruit are the ones who read the company’s engineering blog, Code as Craft, tried to apply things they learned at their own company, and eventually gave up and just looked for a job at Etsy instead.
Companies that put obstacles in the way of people solving problems find that the first rate employees look for other jobs, and that second rate employees devote their time to using Facebook rather than looking for ways to make things better.
The most effective way to gain a competitive advantage at a company is to create a culture where employees are free to use as much of their brain as they want to build value for the company.