(2b of 5 in The Rules of Naked Management)

Yesterday I posted about why to run Naked Teams. Today I go into how. My apologies in advance for the wordiness, and please if you have other ways that have helped you manage transparent teams in the past, post them in the comments.

7 Rules

Let’s pretend for a moment I actually convinced you yesterday that Running Naked Teams is a good thing; how do you actually get a team to start running naked? Well, the 7 steps I like to follow are:

1. Be Edgy: Define not only what you do, but also what you don’t do.
2. Install a Pacemaker: Get a heartbeat going by sharing your goal with the team, and then meeting internally at regular intervals to track the goal.
3. Get a Base Hit: Accomplish a very easy but visible improvement within your first 100 days.
4. Ride Like Paul Revere: Proclaim loudly what you do, and expose how you’re doing regularly.
5. Air Your Dirty Laundry: Set up a mechanism where your peers are invited to comment on and review your performance in public.
6. Share the Pain: Don’t protect your team from “executive bullshit”; instead guide them to help understand what’s actually happening.
7. Put Your Money Where Your Mouth Is: Reward your high performers.

Be Edgy

The first step is figuring out the right stuff to do. But there’s a subtlety here – also figure out what stuff your team shouldn’t be doing. By that, I don’t mean things you obviously shouldn’t be doing (like committing crimes, watching youtube at work all day, or being involved in the production of this movie); I mean find the things a reasonable person might expect that you do, but you don’t, and let people know what those are.

The idea here is to define as sharply as you can the edge between what your team or organization does, and other teams do. This is important initially, and becomes even more important when you Air Your Dirty Laundry.

It’s important initially because it helps you define boundaries with your peers, and to find out what they are worried you might actually do. By figuring out their concerns, and then declaring publically that you won’t do what they’re worried about, you put them at ease about territory concerns. Or, you find out that they expect you to not do something that you absolutely need to do, voila, you’ve uncovered a major disconnect which is always easier to fix in the first weeks than many months down the road.

A good way to find the right edge is to ask your boss, your boss’s peers, and your peers these questions: “what things are important to you that my team not try to do?” or “are there things you’ve seen similar teams do at other companies that you think would not be a good fit for me to do here?”

I once started up a project management team and in response to this question had two peers tell me they were concerned my team would actually do UI design work. No problem – we just declared we don’t do design, and all of a sudden I’d gotten the benefit of the doubt from two other managers.

I once started up a product-management team where I asked this question of my engineering peer and his response was that I shouldn’t have responsibility or influence for his budget. That was great because it put an issue I would not agree to on the table on day one, not six months later when the next budget would be set, and I was able to resolve the disconnect within a day.

By looking for the edges you can quickly find problems that are easier to solve in the first few weeks, but you also help more clearly define what your team’s job actually is. Always look for the edges.

Install a Pacemaker

It’ll probably take about 1-2 weeks to figure out the right stuff to do, and to figure out the edges. During that time your new employees will still view you with apprehension but also some hope. But they won’t think of themselves as a team; they’ll think of themselves as individuals. Now it’s time to start changing them from a group of employees into a living breathing team. All living breathing creatures need a heartbeat, but since you’re starting anew here, you’re going to need to jump start one with an artificial beat. If you are consistent with your artificial beat, eventually the team will develop a rhythm of its own, but you need to force it initially.

Here’s how I do it:

• If there already is a standing team meeting, ask your employees what they like or don’t like about it (remember the rule of Evolution not Revolution), but then take over the meeting and make it your own (otherwise you’ll be compared to your predecessor constantly). If there isn’t a standing meeting, then set one up. Same day each week. Same time. The idea here is to establish a sense of normalcy for the team. During your first 100 days this meeting NEEDS to occur no matter what else is going on; later as your team develops its own rhythm it seems less important but (while you can afford to miss one or two) still keep having the meeting.
• Have a portion of the meeting always be the same – make each team member quickly report any problem areas to the team. The idea is not to solve the problems, just to let people know. Leave solving problems for later in the agenda. During this portion of the meeting, refer back to the notes from the last week’s meeting, and ensure that any open issues are closed. This does two things: it conditions your team members that you manage across time, not just in the moment; and it conditions people that they have to communicate their problem areas (initially in a ‘safe’ environment – see “Air Your Dirty Laundry”).
• Send out an agenda to your team before the meeting and send notes afterwards. Again the idea here is to establish a habit with the team. If you always refer to actions in last week’s notes, then people will start magically closing out actions before your staff meeting because they know you’ll ask.
• Let people know that attendance is mandatory, and that if someone can’t make it they must let you know why first. Include yourself in this –if you can’t make it, designate someone to run the meeting in your absence. And if someone misses without informing you, make it clear to them that behavior is unacceptable. Be equally harsh about tardiness (I have tried, with some success, making whoever gets to the meeting last have to buy food for the next meeting, and if everyone gets to the meeting within 5 minutes of the start time, I buy the food). This may seem draconian but during the first 100 days you need their attention, you need them to interact with each other as a team, and if you don’t force this to happen then day-to-day pressures of the job will cause people to miss this meeting.
• During the status reporting time treat yourself and your problems as part of the team. Report honestly on the things you failed to do. Be harshest on your misses (but ignore your successes).
• And once you’ve gone through that (spend no more than 25% of your meeting on status), then have the team discuss and solve the biggest team issues. You should have lined these up in the agenda, but don’t be averse to going off agenda as long as it’s important.
• At the end of the meeting, ask folks what they want on the agenda next week, and remind folks that the agenda is open until you send it the next week.

A lot of these rules seem like basic meeting management and that’s true; the meeting will eventually develop its own form, but initially you have to start a heartbeat and you might as well start with something that works. But the other thing this meeting does is it starts getting your team to be naked with themselves – in a safe environment with their peers. Your job is to make sure people speak up, but always make them feel safe when they do. Don’t berate under-performance; instead concentrate on getting the team to suggest ways to help each other. Run at least four of these meetings before you attempt to Air Your Dirty Laundry (below).

Get a Base Hit

Now that you’ve defined the goals, and started a heartbeat going, it’s time to make your first move. For this step:

• Come up with an easy step your team can take quickly (I usually set a goal of 4 weeks internally and a deadline of 6 weeks externally) to make a visible change that improves things. DO NOT TRY TO SOLVE THE BIGGEST PROBLEM!!!!
• It’s best if you can get your team to come up with this change on their own (using this as the agenda item for your first heartbeat meeting is a good idea).
• Once you’ve decided on the step, focus 100% on just getting it done. As much as possible ignore the bigger problems your org faces until it’s done (you can tackle them second).

Once you’ve succeeded with your first step, your team will feel more confident, your supporters elsewhere in the organization will feel more confident and will support you more, and your detractors will feel a little more scared and retreat more. But if you fail in your first step, your team loses a little faith, your supporters retreat and your detractors advance. So the key thing is the change must be visible to your team, supporters and detractors, and have a very high probability of being implemented.

In the past I’ve done this by getting my teams to: launch a new company-wide status report (very easy), to publishing a new product spec (much easier than actually building it), to re-estimating all projects in the company and then cutting over 50% of projects during a 4 week exercise (this wasn’t that easy, but it sure was visible).

This is one of the more important steps in running naked teams, and I’ve previously written an entire article on it. Feel free to read it if you’re interested.

Ride Like Paul Revere

You’ve figured out what the right thing to do is, you’ve gotten your heartbeat started, and you know the base hit you’re aiming for: It’s time to ride like Paul Revere. Get on your horse and start warning people about what you’re about to do, yell it in every part of the organization, and keep yelling it.

Here are the steps I follow:

• Tell your boss and your peers in private what you’re doing to do. Your peers don’t want to hear about it first in public – they want to feel “in the know” so let them be.
• In the most public way you can, tell the rest of the company what you’re goals are, what you don’t do, and what your first step is going to be. Company-wide meetings are good, but a series of small meetings with individual teams works even better (more time for Q&A).
• Tell everyone how they can track your progress, and then make sure you update your progress at least weekly. Be honest in your assessments of progress initially – “political spin” during the first few weeks is less important than transparency.
• For each base hit you’re shooting for, name the member of your team who is responsible for delivering it.

By doing this you’ve committed your team to delivering its first success, which lights a fire under them (and you). As I mentioned above, no one likes to be seen by their peers as doing a bad job, and you’ve just publically told the company what their job is and how to track their progress. The truth is that almost no one will actually check your status reports, but the knowledge that they could will spur you and your team on.

(By the way, this is really the first time you’ve actually started running naked in front of a less-than-friendly audience, and the first time will feel weird. That passes.)

Air Your Dirty Laundry

You’ve told the company what you’re going to do, and you’re reporting your progress, but this is essentially a one-way communication. If you don’t provide a way for feedback to get back to you, then people will start commenting on your performance behind your back. So anticipate that, and provide a forum where you invite your peers (and include as many of your detractors as possible) to review and assess your team’s performance. The goal of the forum is not to yell at your team for underperforming – it’s to give suggestions for how to improve and to solve problems and roadblocks holding back your team. Make sure you run it that way.

This forum is not just your team – it includes outsiders – and you need to demonstrate to the outsiders that it has teeth. If the review forum decides a change is necessary, you need to make a good-faith effort to follow through on it. (But bear in mind, you chair this forum, so you have the biggest input in any decisions.)

Having this meeting brings a lot of benefits:

1. It forces your team to be even better prepared for a (less friendly) audience than your team meetings. They will elevate their game in order to appear good in front of their peers.
2. It will show people outside your team that you are serious about transparency, and they will trust your team more.
3. It will give you a huge stick to hit any of your peers over the head if they give negative feedback behind your back about your team’s performance – you get to ask why they didn’t deliver it in the review forum? (I’ve only ever had to do this once for every meeting like this I run – after that, the message spreads quickly through the organization.)
4. If you remember from Be Edgy, you have explicitly declared the things you “don’t do”. In this meeting if something is failing because of an area you “don’t do”, then this is a great opportunity to hold your peer who is responsible for it accountable. This is the second benefit of being explicit about the don’ts.

Once you start running these meetings, you’re truly running naked. You and your team face an external audience who knows what you’re supposed to be doing, and they will call you to the mat if you’re not. I’ve always been amazed by how quickly a team starts executing once this is in place.

You can and should develop your own formats, but here’s how I run these forums (they’re similar in a way to my heart beat meetings):

1. Make sure it’s the same time and on a predictable frequency (e.g. bi-weekly).
2. Get each of your peers to commit that they will either attend or send a designate who can make decisions in their absence.
3. Meeting agenda goes out before hand, notes go out afterwards, and are published for every impacted organization to see. Any decisions should be highlighted at the top of the notes.
4. Make sure your meeting agenda has at least one portion of it that is always fixed – this will condition your attendees to expect consistency, and they will start to deliver accordingly (I use the status portion for this).
5. If this is just a review forum, set a standard format across all reviewed projects, and keep reviews to 15 minutes. If you have a team reviewing 8 projects (a two hour meeting) you want them to spend as little time as possible understanding “formats” and as much time as possible critiquing the work.
6. If it’s also a decision-making forum, still do status (so that people can give you feedback) but keep any status updates to 25% or less of the meeting. The means you just review the projects that have exceptions – not all projects.
7. Make sure your direct employees understand the following rule: bad news can and should be discussed in this meeting, but at no point is it acceptable for one of your peers to be surprised by the bad news. In other words, no ambushes or attacks – your guys must make sure if another team will look bad during a presentation, that the other team is aware before the meeting that it’s coming. This practice keeps the meeting from devolving into he-said-she-said situations and helps you keep everyone focused on solving problems, not blaming people.
8. If you know there is “under the surface” pressure or disagreement going on between your team and another team, bring it out in the open at this meeting. This will condition people that problems get discussed and resolved here, which will make them more likely to keep attending.
9. Never let an action be decided on without identifying an owner, and then write that owner down and publish his or her name in the notes. Keep reviewing in the next few meetings how progress is going. And don’t be shy about signing up people not in your organization, and shaming them when they don’t deliver (this practice was referred to as “being Clarked” at one job, but it was extremely effective to get people to do things).
10. ALWAYS ALWAYS ALWAYS BRING FOOD. Even if you have very senior people who understand the importance of this meeting they will still be much happier to attend if you bribe them. Trust me on this one, you’ll get filleted any time you forget this.

Share the Pain

Many people I’ve talked to have told me one of the most important things a manager does is “protect his people.” From what? Your boss? The elements? The tooth fairy? Usually the response I get is “from politics”, or “from the crazy nature of our executives”, or from something else like that. And I think this is a good idea, assuming your team consists of nine-year-olds. But they don’t! So please, stop this “protection” bullshit, and stop treating your employees like they’re kids.

Here are a couple of facts:

• Every organization has politics.
• All executives appear to make “crazy” decisions when viewed from a different reference frame.
• If your team members are going to grow in their careers, they’re going to have to learn to deal with this.
• And (as I’ll show in two weeks) you want all of your employees to grow in their careers.

By “protecting your people” from politics, you’re actually doing them a disservice and missing an opportunity. The disservice is you’re stymieing their career growth (and they will resent you for this). The opportunity is by having them see the “craziness”, they will actually develop empathy for you and how you make decisions.

So instead of “protecting your people” from the craziness think instead of “guiding your people” through the craziness. Let them see the pain you deal with, heck share it with them, and they’ll rise up and follow you anywhere.

Here’s how to do that:

• Encourage and constantly arrange for your team members to present to your management team. They will see the world above them (and get a sense of what you have to deal with) and you will appear more confident to your bosses.
• Make sure you spend lots of time helping your team members prepare for these events so they are successful, but let it be their show in the meetings (an exception is if they are bombing, divert the blame and anger to you as quickly as you can).
• Be open with your employees (where you can) about decisions above, and view your job as guiding them through the decisions rather than hiding information.
• Be particularly vigilant about rumors. Address any you can. Be open when you can’t comment (I just say “I can’t comment). Take an action to find out more about rumors you don’t know about. But never LIE about a rumor – that’ll come back to bite you. Rumors are vicious if not addressed head on, and for that reason I often include 5 minutes for people to bring up ‘new rumors’ in my staff meetings.
• If you’re going to a forum or meeting where you know you are going to get your ass handed to you for underperformance on your team, have at least one of your team members there to watch. Then make sure you accept responsibility without blaming individuals on your team. That way they can see the pain you’re going through, can see that you don’t pass blame on, and can tell other members of your team what “actually happened” as opposed to what the rumor mill says.

I’ve used the last point to great success. I once had the CEO of our company hand me my ass during a business review of my new unit (after only a few months in the job) but in front of all senior managers in my (matrixed) unit. The response from everyone afterwards was consistently, “wow, I had no idea we were screwing up that badly” and they all worked way harder the next quarter.

In a nut shell, share the pain you get from above (or be transparent in what happens above), and your team will rally more around you, not less.

Put Your Money Where Your Mouth Is

This one seems obvious yet so few people do it. All of the other steps address the human tendencies I talked about except for “most people love being rewarded relative to their peers.” This last step deals with that: figure out who your high performers are, and make sure they are rewarded more. Simple.

And by “rewarded more” I mean cash! I don’t mean praise (although that’s important). I don’t mean fancy titles (although that’s important too). I mean cold hard moolah. The fact is cash is the lifeblood of a company, and if you’re willing to divert more to certain employees, they know they really are valued.

Here’s how I do that:

1. I stack rank all my employees. Even if the company I’m part of doesn’t require this, I still do it. If I don’t have criteria from above, I still figure out criteria with my management team, and then impose it. And there are no ties.
2. I then make sure my top 25% of people get at least 50% of the available cash each year.
3. If someone in my bottom 25% of people doesn’t end up getting a raise, and I lose them, so be it. Usually my star performers are at least 3x to 4x better performers than my bottom performers.
4. If someone does something truly extraordinary during the year, I find some way to reward them with a tangible reward soon thereafter (it can’t always be cash, but I’ve sent people to spas, gotten them cooking services for two weeks while they had their first kid, and given people an extra day off where I covered for them without them reporting vacation).
5. At least once every 6 months I review comps for similar positions in other companies (www.salary.com is good). If one of my high-performers is more than 10% below the median I start bugging HR and finance about a raise for them outside of the review cycle. This isn’t always successful initially (your HR department will always claim they have “better data”) but most HR departments appreciate that I’ve done research. Then if your star mentions to you later that she is thinking of going elsewhere for better comp, your HR and finance departments will very quickly perk up to help given you gave ample warning.

Nothing builds loyalty quite like rewarding people (for great behavior) with cash.

Growing Naked Teams

Do those 7 steps consistently, and give it 3-6 months. What you’ve done is set a clear goal for the team (like deliver water to a city) and then set up a management structure (like an aqueduct) that relies on ingrained human tendencies (like gravity to water) to make your teams automatically achieve their goals. In my experience I find that around month 3 my teams start magically doing the right things and around month 6 consistently exceed my expectations. It’s really worked quite well for me. What’s even better is after you initial investment to get the naked-framework running, it requires relatively little maintenance to keep it going (just make sure your heartbeat and review forums keep running and tackle the top exceptions those two meetings uncover): when running at full speed it takes me about 4 hours a week, 2 hours of pre-meeting and post-meeting work, and 2 hours of meetings.

But what happens if you need to add to, or hire onto, a team? Well, there are some key principles to Growing Naked Teams that apply transparency here as well.

(which I’ll continue next week…)

– Art