Irina Rokosz
“Every system is perfectly designed to get the result that it does.” ― W. E. Deming
There are two ways to build an operating system: the quick and dirty way, and the long and thoughtful one.
The Quick & Dirty Way
You just give a few pointers to your employees, “Here’s what I want you to do: one, two, three… Now off you go to do it!”
As people start struggling with how to reach these goals, some veer to the left. So you say, “No, no, that’s not where I want you to go.” And you put some rules in place to steer them back to the main track.
But people keep struggling with how to reach the goals, so some then veer to the right. And again you go, “No, no, no, that’s not where I want you to go either.” And you put some more rules in place to steer them back to the middle.
Still, people don’t understand exactly how they’re supposed to act or why. They get increasingly creative at breaking the rules, while you get increasingly frustrated. So you start imposing penalties, and fines, and eventually firing people.
If I come to investigate your operating system now, I’ll see a huge pile of rules that no one can encompass in full, not even you. Some rules will contradict each other, some will already be obsolete, and some will leave us wondering as to “What does the author want to convey?”
Why is that? Because you didn’t actually build a system from the start — you simply started piling rules on top of each other. No one managed that pile, and now the pile is even too big to manage. There are too many forces pulling people in too many directions.
But more importantly, you don’t know where your operating system is pointing, what its North Star is, what it’s geared to achieve. You can hope it will achieve what you want, but chances are much higher that it won’t. The “system” you have right now is clearly incentivizing different behaviors than the ones you want — and nobody knows why. So if your organization truly manages to deliver what you want at the end, it will be despite the operating system, not because of it. It will require brute force on a daily basis.
On a side note, this type of leadership is the topic of Dr. Deming’s Red Bead Experiment:
The Long & Thoughtful Way
There’s a second way of building a system, which is not very popular. It’s when you spend a lot of time upfront thinking and designing the system you want: setting up a clear purpose for how it should behave; looking at all the system elements, their relationships, and how they affect one another; preventing or minimizing risks that will occur along the way; and so on.
When you finally implement that system, you set a goal for it, and you spend much less time course-correcting. You will always have some learning and improving to do, regardless of the system, but with this approach it will be minimal.
Most importantly, the main purpose of the system will be clear and not subject to change, because the whole system will be geared towards it. Change the purpose, and you need another system.
Imagine you’re building a bike. The purpose of the bike, as a system, is to take you from point A to point B. You will still have to use the handlebars to course-correct as you go. But while you’re pedaling and keeping your balance, you will get to point B.
Can you change your goal? Yes. You can go to point C instead, in just the same manner. You get to choose your goal, and you get to steer your system — because now you can. You know how your system works, and you know how to direct it to where you want to go.
Is this approach to building a system harder to do? Sure! It takes much more time and much more thought to design it. But that’s the system you want to have — comprehensible, logical, predictable, manageable, and maybe even fun to use 😉
Irina Rokosz
The greatest deliverable of your business is impact, not profit — even though impact, unlike profit, can't be measured.
The most important things in life can’t be measured: happiness, joy, love, peace, freedom, purpose, self-actualization, reason, intellect, quality, friendship, belonging, well-being, confidence, loyalty, wisdom, beauty, truth, honesty, integrity, belief, kindness, trust, empathy, authenticity, determination, motivation, impact, and many more. They can only be felt, which also makes them quite subjective. Don’t they matter then?
Despite subjectivity, we all have a common understanding of them. We know when a person is happy or sad, confident or not, loyal or unreliable. And we also know when something is good or bad.
Remember when you first created your product? You wanted it to be good. You wanted it to make a positive change in the world. Wanting a profit only came in afterwards.
Now, I'm not saying profit is bad, or that you should sell your product for free. It's great to be paid for what you make. But that shouldn't come at the expense of other, more important things — especially if they happen to be unmeasurable.
Do you know what the total impact of your business is? Who and what do you impact, how, and how much? Is it a positive impact or not? If not, how can you change that? These are some good questions to start with.
Irina Rokosz
You need a vision for your organization too, not just for your business.
During your startup phase, you were building a business. Now that you’re scaling, you’re building an organization too. And that’s a separate thing altogether — the two run in parallel, but they are not the same.
Imagine you’re in a boat. That’s your business. It obeys rules and laws not set by you (e.g., physics), but you can still choose the type of boat you want. You also get to choose the people you want in your boat. Both the boat and the people in it depend on what kind of organization you want to build — in other words, what your organizational goals are. These goals inform the choices you make.
Let’s say you want your team to stay fit — then you can choose a rowing boat. But if you want to get somewhere fast, you can choose a jet-powered hydroplane. And if you want to travel slowly and comfortably, you might choose a yacht. If you care deeply about nature and sustainability, you might choose a sailboat. If you want your team to have full autonomy, you can build a naval fleet. And if you want your team to be co-owners, you can split the costs for the yacht 😉
Valve, for example, makes computer games. But they also decided they want to be a boss-less organization. Their home page is their career page, and they’ve also made their New Employee Handbook public (for reference, not a lot of companies do that; they’ll reject sending it to you privately even if you’re a job applicant).
Another example is Buurtzorg — they provide medical home care. But they also self-organize. Their organizational setup is the answer to “the system changes of the 80s and 90s that eroded the professional nurses’ ability to provide relationship-based care” (in their own words).
A third example is Patagonia — they produce and sell outdoor clothes and equipment. However, they consider their actual business to be protecting the planet. For that reason, they run many sustainability initiatives. They even have a policy to repair or replace your gear after years of use, so you don’t simply throw it away.
That’s why you need a vision for your organization — it’s the only way to ensure your organization supports your business, and the other way around. Without an organizational vision, your business and your organization will be pulling in different directions, and you’ll be struggling at each step of the way — which can easily be avoided.
Irina Rokosz
Bureaucracy is not really the problem; unnecessary bureaucracy is.
There are many dictionary definitions of bureaucracy, all pretty negative, but to me, bureaucracy is something quite simple: it’s all the rules and procedures followed by an organization. So the problem lies not with the rules and procedures per se, but with them being too much and too many. In other words, bureaucracy becomes a problem when it stops making sense; when it not only doesn’t help you reach your goals, but it becomes an obstacle in your path.
I’m certain no one is purposefully trying to think of ways to prevent others from reaching their goals (unless you’re the CIA, of course 😉). Quite the opposite, in fact: we come up with processes that can guide us towards our objectives. And yet, quite often we create the opposite effect. Why is that?
Richard T. Farmer, the founder and CEO of Cintas, was famous for teaching his organization to constantly “scrape the hull”. Here's what that meant, in his own words:
“When a new ship is put into the water, it has a clean hull. It moves fast through the water and is very manoeuvrable. It has nothing to hold it back. But if that ship sits in a port for a year, barnacles will accumulate on the hull. It'll slow down the ship. It'll take more power to run the ship than it should. It will become less manoeuvrable because of all the drag. Businesses are just like ships. We have to look for the barnacles. Whether we know it or not, we've got barnacles. Your job is to find those barnacles and scrape them off. Then I'd give examples of barnacles — buying things that you decided you needed 10 years ago and you don't need them anymore. Or having somebody prepare a report that was very important to you five years ago, but now you no longer need it. But they're still preparing it for you. That's a barnacle. People we've outgrown or are occupying positions that are no longer needed — they're barnacles too.”
Rags to Riches — How Corporate Culture Spawned a Great Company
Put simply, your operating system needs constant maintenance and improvement. But that requires additional effort and allocated resources. Left on its own, it will start piling up process after process, rule after rule, until at the end no one can comprehend it in full, because it stops making any sense. You end up with too many contradicting processes and no obvious or easy way to untangle the mess. That’s when bureaucracy becomes a problem.
Irina Rokosz
You cannot erase emotions from work life, but you can make space for them and manage them properly.
In the last episode of Ted Lasso (*spoiler alert*), I absolutely loved how Rebecca yelled at Roy. He said he was leaving the team, and she exploded. If you've missed it, here's the scene:
So, I'm curious: Did you have managers who exploded like that when you said you were leaving? Do you explode like that when someone on your team says they're leaving? If not, why not?
Personally, I’ve never had any manager cause such a scene when I’d said I was leaving. And I feel a bit jealous of Roy: I would've loved to have that. It would've been great to know that they actually cared.
See, I come from a culture in which everyone yells pretty much all the time. Not because they're angry, but because they're emotional. We love emotional — emotional is captivating! No show of emotions, on the other hand — well, that's just plain boring.
But regardless of culture, we want our friends and relatives to be emotional with us. That's how we make deep human connections: shared adventures and heart-to-heart conversations. You can know someone for five minutes but already feel them close if they open up to you — and vice versa.
Even marketing is emotional. You want to stand out, you want to grab people’s attention, you want them to engage. And what better way to do that than to stir up their emotions!
But our offices? Nah, they must be sterile! Emotions are unprofessional. We want our offices full of people devoid of any emotion. Our employees must be passionate, motivated, engaged… but numb! (Even putting an exclamation mark in written text is considered unprofessional, let alone using a smiley 😉)
So, I call this BS. I think people are finally ready to feel something. I think companies should finally live up to their name. And I challenge you, the CEO, to create a company where emotions are not pushed aside (or even punished), but welcomed and properly managed. That change starts with you.
Irina Rokosz
The first and most important communication lesson you learn as you start managing people.
Working with people is all about communication. Managing people is even more so. Knowing when to do what as a manager, based on this communication, is crucial. Especially when the person you're talking to is not sure themselves what they need from you.
Here are the 3 most common situations you'll find yourself in:
- Someone needs to vent. You offer them a shoulder to cry on (that might also take the form of “let's go drink in the bar” 😉). You are there only to listen and maybe understand, although that's not a necessary requirement. What's necessary is that you don't judge. Just be there as a human morally supporting another human. There's nothing else you can do — in fact, doing anything else might turn out to be a mistake.
- Someone gives you a status update. You are supposed to understand what they are saying. You are allowed to also offer your opinion and advice (as long as you don't impose it!). But you're not allowed to take action. This is not your show — someone wants to be transparent and is providing you with information, but that's not an invitation to interfere.
- Someone escalates a problem to you. This is the only situation in which you're allowed to take action, although it's not a given. When someone escalates, they are basically telling you they need help. You are supposed to understand the situation fully (incl. all viewpoints!) if you are to be of any help. But more importantly, once the problem has been transferred to you, it's your decision what you do with it and how. Sometimes it might turn out that the smartest thing to do is… nothing. Sometimes the person escalating is fully capable of dealing with the problem on their own; they just needed to vent (which brings us back to pt.1).
Irina Rokosz
Joining a peer group can somewhat help, but the real help will come from your organization — if you let it.
I constantly hear and read how lonely CEOs are, and I know this, and I agree. The majority of people around us are not business owners — they are employees; they don’t think like business owners, and they don’t understand the business owners’ problems. Joining a peer CEO group can help only somewhat: other CEOs can give you a pat on the back, or provide you with a different perspective, and it’s a nice networking opportunity altogether. But they don’t have skin in the game — in your game. Put frankly, they don’t really care.
The people impacted by what you do — those are the people who really care. In other words, your employees. And yet, they seem to just sit around and wait for you to make a decision and tell them what to do. They don’t offer any initiative or assistance. Why is that?
You can ask them, but I can also give you the answer: They don’t think they have the power to influence anything. And they’re right. The current management system — which you’ve implemented in your company too, since it’s what 99.9% of companies know and use — doesn’t give them that power. It only gives that power to you.
So, how do you share the power? Well, let’s reverse-engineer it: What gives you the power? The fact that you’re the owner. On paper, you don’t even own 100% of your business because you have investors, but you do feel total ownership from Day 1. Look around you, specifically at kids: they get so angry when another kid takes THEIR toy. Everyone seems so much more invested if it’s THEIR thing.
That’s why, to get your employees to care, you have to figure out how to make them owners of what they do. There are different ways of achieving that*, and you have to experiment to find what works for you. But only after you achieve it will you truly have a team that supports you. Until then, you will unfortunately be alone — because you haven’t let anyone share the journey with you.
* For inspiration, see the following resources:
More resources here.
Irina Rokosz
Are you delivering a quality product, a luxury one, or the perfect one?
ISO 9000 defines quality as “the degree to which a set of inherent characteristics of an object fulfills requirements.” You might want to read that again. Or better yet, let me paraphrase: Quality means meeting the specifications of your product.
The ISO-9000 group talks about a Quality Management System (QMS). To have a QMS, you need to be consistent in what you do. Therefore, quality means meeting the specifications of your product consistently.
This might sound like a silly question, but do you actually have specifications for your product? I've seen enough different flavors of software engineering; that's why I’m asking. Just to be sure 😉
If you do have your product specifications, AND you're meeting them consistently, you're already producing a quality product. So, how do you turn it up a notch and start delivering a luxury product? By exceeding the specifications. Go above and beyond what your customer expects — both in product features and in customer service — and you'll be regarded as premium.
Lastly, what is perfection? It's zero errors. And that's why it's impossible to achieve. We can all strive for perfection, but we can never avoid having errors. Only people who do nothing make no mistakes.
On a side note, I'm sure you've heard the saying, “If you're not ashamed of your product, you've shipped too late.” The definitions of quality and perfection also tell us when we need to ship: when our product meets the specifications. Not earlier, but not later either. If we're waiting for our product to be perfect, we'll never ship it.
In summary, quality has 3 levels:
- Consistency = meeting the specs
- Luxury = exceeding the specs
- Perfection = zero errors
(Inspired by Seth Godin)
Irina Rokosz
As the CEO, whose needs should you address with the highest priority: your investors, your employees, or your business customers?
When you first started your company, you had a great idea in mind and a target customer whose problem your idea would solve. It was that simple. Finding customers for your product or service (and keeping them!) was not easy, but it was simple.
Then you got noticed by investors. They decided to join in for the ride: they give you money, you grow the business, they profit too — everybody's happy.
But once you started growing the business, your role shifted. You're not working on your idea (i.e., product or service) anymore. You are constantly at meetings with more investors, partners, clients. And in between, whatever little time you have left is filled up with constant firefighting.
Suddenly, everyone wants something from you: those are a lot of people, mind you, and they become more and more every day. And everything everyone wants requires money. So you need more investors to give you more money. And so, the vicious circle closes. Welcome to endless growth!
Now, if we take a step away from all this noise and look from the side, one question is pressing: Who is your (the CEO’s) customer? Who are you doing what you're doing for? Who benefits first and foremost, and who is the first to get impacted?
You might think you're doing it for the business — but that's not a living thing. Or you might think you're working for the investors now — after all, they pay you the big money. Or you might think you're still developing the product/service for your business customers — they pay you money too.
Here's my answer: You work for your employees now. Why? Because they are the first in your value stream. They get immediately affected by your decisions and actions. They are also the ones who work on your product/service, not you. And they are the ones who serve your business customers, not you. As a result of your employees’ activities, your business is either successful or not. And only if your business is successful, your investors can take their cut.
Your investors are actually the last in the value chain, not the first — even if most of the time it looks otherwise. They want their ROI, and that's why they want you to succeed. They get into the minute details of how you run your business only when they're concerned that you might not succeed. Otherwise, they really have no interest in spending more of their time in the trenches. They've been there, and they've got the battle scars to prove it.
Two things to take away:
- If you're still trying to work on your product/service or directly serve your business customers, stop! That's not your job anymore. And if you spend your time doing what's not your job, then there's no one to actually do your job.
- Keep doing what needs to be done outside your business (networking, promoting, getting more investment, etc.). But inside your business, there's only one thing you need to do, and that is: take care of your employees!
“Take care of your employees, and they’ll take care of your customers.”
— J.W. Marriott, Jr.; The Spirit to Serve: Marriott’s Way (1997)
(…and of your investors, might I add 😉)
Irina Rokosz
Following the old advice of “don’t do what everyone else is doing” is easier than ever.
I recently came back from vacation. What was mind-blowing was how many AI-generated menus and advertisements I saw, especially in the more touristy places. There was literally nothing else.
Yesterday I attended a food fest, and it was the same story: only AI-generated images and banners. I guess this is the new normal now.
The same thing happens online. We are still able to tell AI-generated text from miles away, but now we’re adding vibe-coded websites to that — and they all look and feel the same (here’s a more detailed analysis of what I mean).
Lastly, let’s not forget that all color moved from offline to online. As a result, our physical surroundings became super dull: everything is either white, black, a shade of grey or beige.
Now, don’t get me wrong: the products and services themselves can be great. But their design and marketing are making them appear all the same. Which makes it hard for consumers to notice, relate to, or choose any of them.
And here’s the silver lining: In an ocean of similar products and services (and that ocean keeps expanding as we speak), you don’t have to try very hard to make something different. If it’s a physical product, just make it colorful. And if it’s online or printed, just avoid using AI to generate it.