What sort of relationship do you have with your mother? Good? Difficult? Distant? Improving? Whatever your answer, you better be prepared to explain it to Laura Roberts, the CEO of Pantheon Enterprises.
Laura dubs herself an unlikely entrepreneur and reluctant capitalist. She started her career as an elementary school teacher before being thrust into a role at her family’s chemical company following her father’s unexpected death in 1997. She became CEO in 2002 at the age of 36.
Laura now describes herself as a conscious capitalist driven by the principles of purpose-based, stakeholder-oriented management. She is also a passionate environmentalist. These are two traits you may not expect to find in the head of a chemical company, but Pantheon is not the stereotypical company. The product of a “mad inventor” – as Laura calls her father – the company was founded in the late 1980’s with the goal of developing technologies to replace toxic chemicals and processes in heavy industries. Pantheon’s mission is “to use our ever increasing portfolio of products that are biodegradable, non-toxic, non-flammable, non-hazardous and non-corrosive to change the world.” Its purpose, “to sustain better life.”
Since Laura runs an unconventional business, she isn’t looking for the typical employee – thus the unusual question about relationships with mothers. Laura believes reflecting on this critical relationship offers insights into a prospective employee’s emotional maturity. And this maturity – generally considered a “life skill” rather than a business tool – transfers directly to how well employees are able to fit into a complex and mature organization. If employees haven’t dealt with issues in their important personal relationships, then they are unlikely to deal with the tensions that exist in all organizations. Instead, they let these problems fester, with a negative impact on employee engagement, productivity, attrition, and business results. Laura also argues that people with low emotional maturity micromanage others and fail to empower those around them or distribute power across the organization.
When Laura asks her questions, she likes to hear that her candidates have managed a successful relationship with their mother, a person that she asserts is the most important in anyone’s life. However, she is also comfortable with someone telling her that they have a bad relationship with their mother, as long as they can explain why and share what they have done to try to improve things. The key is that they demonstrate that they have actively managed this important relationship in their life and not simply ignored it, as often happens with organizational issues in a company.
Another reason that Laura believes that emotional maturity is critical to the effective operation and success of her business is that she runs her organization under a governance structure called Holacracy – with coaches, but no defined people managers or strict hierarchy.
“At Pantheon, leadership develops in the most unlikely ways,” she explains, “and everyone has the power to change the world.” As a result of this, her company is in a constant state of change to successfully meet the challenges of her business and organizational model. “The ship,” explains Laura “basically steers itself.”
Anna McGrath is the co-founder of the purpose-based consulting firm WonderWorks – the first Holacracy licensee in the USA and the firm that implemented the structure into Pantheon. The home page of her website proudly announces, “WonderWorks Celebrates 10 years of Loving and Living Their Purpose.” But it was a long road. Well before it was fashionable, Anna embodied consciousness and is also chair of the non-profit Bay Area Conscious Capitalism Chapter. She tells stories about being laughed out of boardrooms early in her career, but she remained true to her message and beliefs. Today she has an impressive list of clients and is a recognized leader behind the conscious capitalism movement.
Anna is passionate about purpose-based brands and the business operations system designed to support it: Implementing Holacracy into her own firm just under two years ago. At its core, Holacracy is an operations and governance structure that supports the distribution of power to the whole employee population, not just a handful of leaders, and seeks to ensure that any tensions sensed by anyone, anywhere in the company, can be rapidly and reliably processed into meaningful change – provided that it is relevant to the purpose of the organization.
Holacracy provides a new power structure for the organization by ensuring that everyone, including the CEO, plays by the same rules of the game. Under the structure, all leaders must cede their authority to this constitution.
By distributing power and integrating the perspectives of all employees, organizations can improve attrition, increase employee engagement, reduce operating costs, and achieve better financial results.
The $5,000 Office Chair
A friend of mine from Europe recently told me a story about the six weeks he spent trying to order a desk chair through his company. His request first went to his manager, then his manager’s manager, then to US corporate, then back to him, from him to the local facilities manager, then to the facilities manager’s manager, then back to him, then to finance for a PO, then to the vendor for purchase. Had my friend ordered the chair directly, it would have cost around $300. Because no one was empowered or trusted to spend the company’s money, he estimates that the chair cost the company about $5,000 in time and resources.
This is only one of the many stories I’ve heard about such ridiculous bureaucratic waste. They’re funny – unless they’re creating a huge financial and productivity drain on your organization. Consider this, if you multiplied the chair purchase by a 100 transactions of a similar amount (computers, printers, desks) in one month, an organization could see a negative impact to their bottom line of $470,000. That is almost $6 million for the year, not including the cost of lost productivity and opportunity. That’s real money – so why isn’t anyone fixing the problem?
If you ask Laura Roberts, the story of the $5,000 chair points out a lack of emotional maturity within the business. The problem is well known, but no one is talking to the right people about it. Instead, employees are complaining to their co-workers and friends like me, but not to anyone that can do anything about it. Or they are speaking ineffectively to the right people or effectively, but are simply ignored. Without emotional maturity – an ability to deal with big and sometimes difficult interpersonal issues – and an effective organizational governance structure, critical tensions go unaddressed and become detrimental to everyone, including your organization.
One of the developers of Holacracy, Brian Robertson, explains in his TEDxDrexelU talk Why Not Ditch Bosses and Distribute Power that these kind of organizational tensions also arise when employees recognize the distance between where they are and where they could be, but feel powerless to impact progress. This gap is one of the issues the governance structure of his social technology is designed to fix.
Brian compares the structure of Holacracy to cells in the human body. Each one has a clear boundary within which it has autonomy and authority, but there are no manager cells. There is a distribution of power. In a business, it is a system where everybody in the organization has autocratic authority, but they know the bounds and interconnection of their authority and when they need to get someone else involved. They know what they can expect of each other.
For an organization to successfully operate without managers there is a clear need for a strong governance and operations process. Under Holacracy, this model requires two types of meetings: Governance and Tactical.
Under Holacracy, regular governance meetings determine how the work gets done – who is accountable for what, the authority they have, and the constraints that exist. Despite this commitment to structure and clarity, the system allows for great flexibility and agility to dramatically change direction when tensions are sensed within the organization.
The process ensures the organization’s purpose is at the center of everything and that everyone is heard – dismissing the common desire for group consensus.
On the front lines, a team’s operational flow is synchronized by regular Tactical Meetings that facilitate quick action on key issues. Barriers to getting required work done are identified and processed into clear next-actions and targeted outcome projects. In an almost military fashion, Tactical Meetings are held to strict time keeping, action over analysis is a mandate, and radical transparency is practiced keeping everything exposed.
Governance and Tactical meetings like the above provide a forum and natural environment to discuss and address tensions in your company before they become a problem. Like having an emotional mature relationship with your mother, addressing such tensions will make you happier and is good for business.
Incidentally, Laura has a strong and loving relationship with her mother and her company has grown on average of 57% year-on-year for the past four years.
Published on Forbes, 10th October 2013.