Tour Report: A ‘Turquoise’ Trip to Silicon Valley

During our ‘turquoise’ tour we visited Silicon Valley’s top companies: Google, Morning Star, Amazon, Patagonia, Zappos, Oracle, Invitae. We also visited Brian Robertson’s lecture on holacracy.

During our ‘turquoise’ tour which took place on November 6-11 and 13-18, 2017, we visited Silicon Valley’s top companies: Google, Morning Star, Amazon, Patagonia, Zappos, Oracle, Invitae. We also visited Brian Robertson’s lecture on holacracy. The tour participants obtained priceless experience and many new ideas. They got inspiration from what they’ve seen and are ready to implement new knowledge in their companies.

1.Google
The first day of our ‘turquoise’ tour was spent at Google.

There, we learned some new things:

1. Key business principles:

  • never do anything that cannot be scaled;
  • use platforms;
  • company mission – structure all the information in the world and make it accessible.

2. Company strategy:

  • healthy aggression towards key competitors: Amazon, Microsoft, Facebook etc.;
  • no general strategy. Every team makes its own decisions;
  • all investments start from answering the following question: “How much money will the company earn and when?”

3. Principles of teamwork organization:

  • controlled chaos;
  • as few rules as possible, just some basic principles;
  • every team decides on its own organization and tools;
  • decision are made via team consensus;
  • every team has an experienced product manager.

4. HR, recruiting, training:

  • main principle: hire the best, give them a higher-than-market salary, set ambitious goals and leave them alone;
  • no tests during the hiring process;
  • evaluation every six months. Methodology: 5 people chosen by the employee plus manager evaluate their work using the same method. The results are shown to an independent manager who gives the final assessment. Then, a development plan is made. If the assessment is low, everyone will try to help their colleague improve;
  • salary numbers are confidential and forbidden to discuss;
  • during the interview, a lot of attention is paid to facts. The candidate has to show facts for every statement;
  • everyone has a training budget which they can spend as they see fit;
  • mentorship is encouraged;
  • recruiting is separate from HR. Recruiters find the best people, HR keeps them in the company.

5. Total control over employees:

  • working remotely is discouraged;
  • levels of access are quite rigid, everything is closed;
  • lies are not tolerated;
  • everything is controlled by security;

6. Limitations and risks singled out by the tour participants:

  • everything is centered on money and profit;
  • there is no general system of knowledge management. Teams do not share information;
  • it’s quite difficult to keep up the ‘startup’ spirit in a huge corporation employing 85,000 people.
3. Morning Star
The second day of our tour began with visiting Morning Star, one of the most well-known turquoise organizations described in Frederic Laloux’s book Reinventing Organizations.

It’s a unique company owning 40% of US tomato paste market, which exports products overseas. The company does not use punishments: if something happens, it gets repaired, and no one will be looking for someone to blame. Every company department hires its own employees, and every employee buys everything needed on their own. In 27 years of the company’s existence, only 2 people were fired; the rest left the company willingly.

Company trivia:

  • Frederic Laloux described this company at length in his book Reinventing Organizations;
  • the company is the largest manufacturer of tomato paste in the world (it owns about 40% of US market);
  • the company started 40 years ago with one truck.

The organization’s main principles:

  • never use coercion;
  • keep your promises.

1. The whole management system is described in the “Mutual Understanding Agreement” which is updated annually:

  • everyone is their own manager;
  • no management tax, as the company does not have any managers with high salaries. However, all employees have higher-than-market salaries;
  • all communications are built on requests. No one can be fired, only asked to leave on their own accord.

2. Strategy:

  • the company has become better than all competition thanks to its efficiency and low prime cost due to no management tax;
  • high automation level; 19% ROI, 2 times higher than any competitors have.

3. Structure:

  • no real hierarchy. Teams may create one if needed and eliminate it at any moment;
  • everyone is at the same level;
  • at the same time, everyone knows who is the best engineer out of 10, but their salary will be equal.

4. Regular management:

  • weekly meetings where goals are set and managed;
  • all company processes are clear and accessible;
  • there are about 850 criteria on the weekly management monitoring.

The factory processes 30 tons of tomatoes in about 4 minutes.

General conclusions:

  • the company’s crucial advantage is no management tax;
  • company leaders believe they can be self-organized without managers and receive a specialist’s salary;
  • communications are based on a fixed horizontal agreement system, which is constantly updated;
  • the mutual understanding agreement is constantly updated, like a holacracy constitution;
  • this allows the company to be efficient and top all competitors.
4. Brian Robertson
We always try to find the best speakers.

Despite personal problems and inability to visit us in person, HolacracyOne’s Brian Robertson had a great online session with our group and offered a ready-made product for implementing holacracy in vertically managed companies. 

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5. Amazon Lab
The next company we visited was Amazon, at the heart of where the Kindle and many other products were designed.

3 interesting facts:

  • Every morning, employees receive a survey. If the HR department sees a problem in their answers, they talk to them and research the problem to prevent the employee’s leaving or burnout.
  • Disagree & Commit - you can voice your own opinion and offer a solution. If the team’s votes are divided 50/50, the group leader makes the strategic decision;
  • The company’s core principle is: Develop or Leave.

Amazon has merged or bought such turquoise organizations as Zappos and Whole Foods

How do they manage to get a 30% annual profit and acquire so many other companies?

1. The company’s main principles:

  • Still the first day: despite employing more than 300,000 people, the company is trying to keep the ‘startup’ entrepreneurial spirit;
  • Quite authoritative management and communications are allowed to achieve results;
  • Lean production and economy. When Jeff Bezos launched the company and had no desk, he simply took a door off its hinges and put it between two chairs to get a makeshift desk. This story is always told by everyone. All Amazon offices have very cheap furniture. The company refuses to spend money on things not paid for by clients;
  • Entrepreneurship. Any employee may initiate any project. Company employees constantly have new ideas and launch businesses with a 1:10 success rate. It’s inappropriate not to innovate. First you act, and then you analyze.
  • There are many small mobile teams in the company. Their task is to research new strategic aims;
  • Leadership is expected of everyone, even of loaders;
  • Training and curiosity are encouraged;
  • Hard work is encouraged. Everyone is very hard-working.

2. HR, recruiting, adaptation and development:

  • The average term of an employee’s staying with the company is 2 years. Business processes encourage every employee to work at 100% capacity after six weeks;
  • HR is responsible for controlling managers and their relationships with employees, as well as suspensions and firings;
  • Every company employee works for 2 weeks at storage & packing during their adaptation: everyone goes through this;
  • A 360-degree evaluation is held regularly.
  • There are always vacancies in the company. It has to compete with Apple, Google, Facebook and Microsoft for talent, which is not easy.

3. Motivation:

Everyone in the company works very hard. Employees work 12-hour days six days a week. Managers work every day, for 14-16 hours.

6. Invitae
The next company with unique and innovative insight visited by the tour participants is Invitae.

Alex Furman does wonders in building the ideal team management structure: it impresses everyone. This great man has not only created an organization – he has created a company where every employee feels safety and trust.

The company managed to design a DNA analysis product in a very conservative and difficult environment. In just 4 years, they owned the market. The most important principle here is team management.

It has been 8 years since this company was a new startup, and it managed to find its niche on the market. Invitae can not only diagnose a disease based on DNA tests – it also can predict the possibility of the patient’s relatives getting the same disease and offer treatment (including preventative). Due to the company’s many technological breakthroughs and innovations, its product is much better than the competitors can offer: the diagnosis is several times faster, better and cheaper.

Invitae takes corporate culture very seriously. It refused to build a hierarchy: if one person has power and resources, people are forced to work for this person’s goals, not the company’s. Company goals and personal goals are always different in hierarchies. So, employees start trying to get as much power as they can, and no teamwork is possible under such circumstances.

The company has a unique tool to evaluate the organization’s network and the employees’ work. To evaluate the network, corporate messaging and e-mailing are analyzed with the help of an AI. The analysis looks like a map where it is quite easy to see how important and influential every employee is. Based on this map, it’s easy to see how one person impacts the company’s results, and whether they are a key figure. For instance, a university graduate became so influential in a year that she got several promotions, unlike other people who didn’t participate as much in business despite their experience and qualifications.

7. Patagonia
That’s what we have learned there:

1. Main business principles:

  • the company makes quality outdoor clothing;
  • the company takes environmental protection very seriously: most of their clothes are made of recycled trash;
  • the clothing is made in accordance with fair trade certificates.

2. Business strategy:

  • the company’s product is much more expensive than its competitors can offer, sometimes by 50-200%;
  • the company’s target customers are people conscious of the environment and ready to pay more to support Patagonia’s mission: protection, sustainability, nature. People are happy to pay money to support a good cause;
  • Patagonia gives a lifetime warranty on their clothing;
  • the company’s founder, Yvon Chouinard, does not think of himself as an entrepreneur;
  • the company does not set any development goals. They even try to avoid opening more shops – but they have to grow to accommodate their clients. They are themselves very surprised at their fast growth.

3. Retail trends:

  • 80% of sales happen online, and 20% via retail.
  • the shop becomes a place where a client can repair their clothing according to the lifetime warranty or return it;
  • the company has already launched test shops where every clothing sample is accessible in only one size.

4. HR, recruiting, motivation, training:

  • all employees honestly believe the company’s ideals;
  • more than 100 resumes a week are sent to the company. They choose their people very carefully, by conducting group interviews;
  • new employees sign a 500-hour contract. After this time, a hiring decision is made;
  • the brand’s ideology allows the company to keep its advantage with the target customers consisting of Gen Y, Gen Z and millenials;
  • the company offers a higher-than-market salary;
  • no people get fired in the company – only for gross incompetence. However, it happens extremely rarely;
  • many shop assistants have worked for the company for decades;
  • salary information is confidential.
8. Zappos
Our next day started with Zappos.

Currently, the company employs 1,600 people. New employees usually have a month of probation. Everyone starts at the call centre, no matter what position they are hired to fill: during holidays everyone works at the call centre, even Tony Hsieh himself. Designing new products among controlled chaos is very interesting to watch.

We saw a very interesting innovation here: on the cafeteria tables, there are profiles of mentors with photos, information and contacts. Any employee can meet them and talk to them. Any employee can become a mentor. The mentorship program is 30 days long. The company’s main idea is to make its employees happy. There are special happiness criteria here: inclusion, innovation and productivity.

This company is practically the birthplace of holacracy, which helped the company’s fast growth. Eventually, Zappos became a threat to Amazon. Amazon bought this unusual company, but on one condition: not to change the management system, but keep the holacracy style. The company owner works here as CEO. Amazon is keeping its promise not to micromanage, and Zappos continues to grow.

ВAll US companies do volunteer work. We visited Zappos on a day when they gave out free shoes and lunches to poor people.

The information is based on materials supplemented by tour participants: Sergei Bekhterev, Andrei Stanchenko, Andrei Slivakov, Aleksei Kapterev, Yuliia Parkhomenko, Boris Diakonov, Irina Dzhogola, Ekaterina Zuieva, Madina Khapsirokova and others.

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The tour participants have learned top companies’ secrets firsthand.

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Participants’ impressions of previous management tours:
Having already taken part in educational tours, these people are happy to share their knowledge and impressions.
Anton Nesiforov
Anton NesiforovProcess Manager for fruit and vegetable preservation, beverages, and alcohol

On our tour of Germany, we visited the most famous food exhibition, the Green Week, as well as numerous retail chains and enterprises operating in various interesting industries. We have a lot to learn. We must take the best and use it. Thank you, FastForward, for your careful approach to creating this tour.

Alena Nesiforova
Alena NesiforovaUnified Concept Manager for Izbenka and VkusVill

We visited several retail stores in Germany, as well as manufacturing facilities. What we liked the most about the stores we visited was the high quality standards of German retail. Retailers know how to sell high-quality goods at affordable prices, and this is probably the main secret of Germany's retail success. As for production, we were inspired by some of the small family businesses we saw.

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