In This Video

The research is clear: happy workers are more productive workers. And it’s best when managers enjoy their jobs as well. Managing for Happiness is about concrete management advice for all workers. Practical things that people can do next Monday morning in order to change the organization’s culture, and make it a happier place to work. This is not only relevant for managers, but for everyone who is concerned about the organization. We create a happier environment by managing ourselves, and lead by example, in an environment focused on experiments and learning. All creative workers are expected to be “servant leaders” and “systems thinkers”. In this session, you will learn how you can do that concretely, with a number of inspiring stories and examples. A happier organization starts with people managing themselves.

Video Transcript

Audience:  Ladies and Gentlemen, Jurgen Appelo.

Jurgen Appelo:  All right.

I had to pick that song, because it’s the very first Dutch pop song that hit the number one spot here in the USA. Yes, here we go again. I apologize, I’m Dutch, I’m sorry, okay? I feel I have to do that. Because I am Dutch, I live in Brussels, Belgium. My husband worked for the European Commission, and we know what people think of the Dutch. We are seen as the rude guys over there, among those 28 and very soon 27 member states. That is because in most languages, there’s this expression, that says, stepping on a person’s toes, which means to offend them, right? That is a common expression in many languages. Well, the Dutch always see things from a different perspective. We have an expressions that says, some people have long toes. It’s just impossible not to offend them. It’s the same thing happening, but we see it from another perspective. That’s possibly because something to stripped out of our DNA many, many years ago that filters whatever we think before it escapes our mouths, right. At any point during this presentation, when you think, “Oh my God, what is he saying now? He shouldn’t be doing that.” Just think, it is so admirable that he goes on stage with a mental deficiency like that. Keep that thought. Keep that thought.

I’ve been writing a lot, and speaking a lot, and actually, I must admit, that I was originally a software engineer. I studied at the university in Delft, in the Netherlands, and I was taught how to be a great programmer. But, apparently it didn’t work, because my teammates begged our CEO to promote me away into a management position, where I couldn’t do any harm anymore. I absolutely had no idea how to manage people. I only knew how to manage computers. That’s how I worked with developers.

For me, developers were computers on legs with hair. I tried to give them instructions, it didn’t work. Debugging, even worse, I can tell you. I notice that many other people struggle with management, they have no idea how to work with people. I basically managed the organization like a machine, and this is a well known metaphor, and that certainly applied to what I was doing. That meant that, well, things failed. Bad management leads to bad performance, at least in my experience.

Couple of businesses that I worked for collapsed, including my own startup, at the end of the ’90s, early 2000s. I remember sitting on the couch, sofa, that would probably be around here, at my house, and thinking, “Hmm, maybe I could come up with a different business model, like, you could hire me, and get me a job at your competitor. I will manage them to destruction, I guarantee.”

Anyways, but everything has changed. Now people ask me for advice on how to run their businesses, and I travel the world. I am now on day 10 of what is a 50 day tour all over the US. You guys gonna get sick of me by the end of those 50 days, I promise you. People ask me how to run their businesses, so something has changed. I like to summarize that as, manage the system for happiness, and offer products and services with meaning. That’s like the [executive 00:04:16] summary, the executives can go now, “This is it, this is everything there is [inaudible 00:04:19].”

That’s the summary, but I will give you some stories, to explain, of course, what I mean here. Sadly, there is no one silver bullet in order to have better managed organizations, and more successful bullets, there’s no silver bullet. The British would call it no Holy Grail, but who cares about them, these days, and their opinion? I discovered, in the last 15 or 20 years, that there are actually seven silver bullets, and I’m going to show you what those silver bullets are.

This is Taffy. Let’s imagine that your manager’s Taffy. Taffy wants organized corporate lunch meetings in meeting room C, also known as the grave yard, where she fed everyone pizzas and power points, in the hope that afterwards, everyone will feel engaged. Nobody said after that meeting, “Wow, those bullet points were so inspiring, when is the next even schedule in my free time?” If you know managers like Taffy, at the county of three, say, “Daffy Taffy.” Okay? Here we go. One, two, three.

Audience:  Daffy Taffy.

Jurgen Appelo:  Oh my God. That’s 82.7% of the audience knows someone like Taffy. I have been a person like Taffy, I must admit. I organized such lunch meetings, as well. But, I learned something better. I know that change is easier when people share food. It is in Linda Rising’s book, Fear of Change. One of the patterns, fed them, and they will be more willing to adopt a suggestion.

I once organized my colleagues to my house for dinner, two programmers, an account manager, a project manager, a system administrator, and the senior vice president of the pencils and paperclips. I asked them to my house, I invite them to my house, and when the guests arrived, I told them, “Now, you do the cooking. Surprise!” After they had recovered from the shock ,the two programmers started making the main course, and the project manager would self organize. The account manager prepared the appetizers. The system administrator volunteered to take care of the deserts, and, being a system administrator, he did not allow anyone access to the chocolate, of course, without permission, and filling out a form.

I just watched other people doing hard work. Typical management role, I suppose. It was a great success. People enjoyed it. I call that Management 3.0, that is creating an environment for people to be happy and productive. Let them manage each other. Let them give each other feedback on performance. Let them coach each other. I created system, that environment for them, management system, and they were happy, I saw smiling faces.

I got questions from the rest of the organization, “Hey, I heard people have been cooking for you at your house, that’s insane. When do I get an invite? I can cook, by the way.” That seemed to work.

I have another example. Let’s say your manager’s Jim. Jim wants celebrated a big new sales contract, maybe with a little party for the sales department, but he sort of forgot to ask the production team if the new delivery deadline that was promised to the customer was even statistically possible. If you know managers like Jim, let’s do another scientific test. If you know managers like Jim, at the count of three, “Swimmy Jimmy,” alright? Here we go. One, two, three.

Audience:  Swimmy Jimmy.

Jurgen Appelo:  Oh, that was beyond 90%, I can tell you that. Woah. There’s nothing wrong with celebrating. There’s nothing wrong with celebrating if the rest of the organization finds reasons to celebrate as well. I discussed this with my CEO a couple of years ago, and I said, “Our team should have reasons to celebrate, for the stuff that we have delivered, great new projects, or whatever. People are proud of what they are doing.” He said, “Okay, what do you suggest?” I said, “Well, let’s have something that makes noise,” because we had a big, open office space, in Rotterdam, where I worked, former factory that was redesigned as an office. Was a big, open office space, and I said, “Let’s have a bell, or something.”

Two weeks later, he came to my desk with this big copper ship’s bell, and he said, “Here’s your bell, now do something useful with it.” I was like, “Woah, awesome.” I brought the bell to the office police … sorry, the office manager, I mean, sorry. Always forget. I asked her to place the bell next to the coffee machine. From that moment, anyone was allowed to ring the bell for anything that happened. It could be a new project delivered, or a new baby delivered, by a person, not by the company, of course. It was a great success. The bell add a bit of playfulness to the office, and it also add a big terrible noise, for about five seconds, when somebody rang the bell.

100 very curious, and slightly deaf, employees, would gather around the coffee machine to learn what the celebration was all about. The last time that I heard the bell, by the way, was when the CEO announced to the whole company, that I had just quit my job. That is not a lie. May have saved the company, I think.

Anyways, so the playfulness was added, and this bell was, for me, an experiment. A management experiment. Can I create a culture where people just drop their work and celebrate something together for 10 minutes? Well, it turned out that I could. By increasing these experiments, I increased the learning as a manager.

Let me give you one more example. This is Mick. Let’s say that you ask Mick for some budget to attend a conference, like an Agile Conference, or you just wanted to work from home for a couple of days per week, or you just wanted a more accurate job title, but no matter what you ask for, Mick always says, “No. No, sorry. No, no, we cannot do these things around here, we have certain rules and procedures.” If you know managers like Mick, last scientific test, I promise you. If you know managers like Mick, at the count of three, “Tricky Micky.” All right? Here we go. One, two, three.

Audience:  Tricky Micky.

Jurgen Appelo:  Nearly 100%. Amazing. Managers like Mick like contracts, and there’s nothing wrong with contracts in certain context, but the problem with contracts, I find, is they limit people’s freedoms and happiness, sometimes. That’s why I have decided, as an experiment, to have no contracts for the people that I am working with right now. This is how my team feels about that.

They look happy to me. At any moment when one of them says, “I would like to work from Bali at half of my usual productivity.” I say, “Well, we have no contract specifying your working hours and location, so go for it, we’ll make it work somehow.” When they want to change their job titles, they write their own job titles, I tell you. We have a Chief Geek, a Zookeeper, a Project Bottleneck. I’m not kidding. Those are the roles that they have adopted. My own title of Emperor God Overlord suits me quite well, I think.

Anyways, so this is an experiment, and some people find that it’s innovative. Is it innovative, I don’t know, it’s certainly worth trying, see if it works. Well, for one, [inaudible 00:12:53] happier, I’ve been able to get away with it. By not having contracts, I think this helps us focus on meaningful products and services, instead of time and titles, and locations, and that boring stuff.

I gave you seven silver bullets. Let’s look at them again, one by one. We can only change the world’s biggest problems if we offer more products with meaning. We can only do that when we innovate, not only in the way we build those products, or how we create those service, but also how we manage the organization. That should be innovative as well.

Due to the ever increasing pace of change in the world, we have to learn faster, also, as managers. Researchers and scientists know that learning is optimal when we run more experiments. That means faster learning.

As children, we learned long ago that experimentation’s part of playing, that’s what children do. They experiment, they try things out. Sadly, we only do this when people feel happy, when they’re feeling good about the environment, then, they run experiments.

As managers, we cannot make people happy, but we can certainly manage the system for more happiness. That’s it. Those are the seven silver bullets that I have found over the last 15 or 20 years. To make this easier to understand for the managers in this room, I hae another version of this slide, where I offer exactly the same information, but then as seven boring bullet points. Always adapt to context. There’s some cheesy clipart, and with an eye for detail, I actually use the fonts Times New Roman and Comic Sans. I’m a perfectionist.

Anyways, with these seven silver bullet points, you can address the world’s biggest challenges with the more meaningful products and services. Let me give you some more examples. I was at a conference a couple years ago, the Agile Lean Europe Unconference, it was in Barcelona at that time. Jim McCarthy was speaking there, I’m sure some of you know Jim. He said something that inspired me, he said, “You guys have one thing wrong in the Agile community. You’re always focusing on co-location. Thou shall be in the same room, co-located, otherwise you burn in hell,” or something like that, he didn’t say it like that, but that’s how it felt to me.

He said, “The point is not to be geographically close to each other, of course it is useful, if you can do it, by all means, be co-located, but the trends are in the opposite direction. Dispersed teams, distributed teams, flex time, remote working, that is the 21st century, deal with it. We need other ways to arrive at the same goal, which is not geographical closeness, but mental closeness between people.” I sat in the audience, and I thought, “Of course, that’s it. That’s it.” We need other practices to achieve mental closeness to compensate for the fact that we’re not sitting in the same room.

What can we do? I came up with a practice called personal maps. It is a mind map that you create of yourself, and that you then discuss with your team. This is me, Jurgen, I have some goals and values, and family, friends, et cetera, and I make a nice diagram of myself, and then I offer it to me team, and we discuss it. Here is another one, by Lisette, she is our remote office manager, or Zookeeper, as she calls herself, and she [already 00:16:52] adapted the practice, which is great. She used pictures, I didn’t come up with that, that’s what she did, she used photos.

The nice thing about this practice is … Important constraint, you’re not allowed to present your personal map, because we all know what the extroverts will be doing, right? They will go on, and on, and on, and on, and on, and on, and on. Not allowed. You offer your personal map, and then other people start asking questions, like, “Hey Lisette, why did you have pink hair over there on that photo, on the,” for you guys, the right side. “Oh, well,” Lisette said, “that was 19 years old, it was a phase, it was about two years, you know how it goes.” Then we have a great discussion about the silly things that we did when we were young.

That creates bonds between people, I can tell you. Here’s another one. This one is by Hannu. Hannu is our web developer, and it’s totally obvious that Hannu is from Finland, because there’s almost nothing on the personal map. No, seriously, my friends in Finland pride themselves that they are very economical with their language. They have to, because the words in the Finnish language are five times longer than in any other language.

“My name is Hannu, I’m from Finland.” “Okay, so, awesome, Hannu, first question, where in Finland?” “Helsinki.” “Great, awesome, so …” Well, ultimately we got a conversation going. Hannu is fantastic, by the way. This joke got the biggest laugh in Finland, I love them, really, I love them, awesome people.

Here’s another one. This one is by Sergei who’s obviously our software architect, as you can see. I love Sergei. He’s so cool. None of these personal maps are wrong, or right, they’re people expressing themselves in their preferred matter. That is fantastic. You already see a little bit about what kind of people they are with the way they draw their personal maps. This is Dave, someone who attended one of my workshops. Very colorful, apparently very different kind of person. Terry, and several other people have used colors, and markers, and everything.

That’s personal maps. I came up with it, I ran an experiment, and I learned something. I learned that it worked for my team. They insist every new person that we hire, one of the first meetings, we gotta see your personal map. We’re gonna ask questions about your map, so show it to us. Don’t matter how you draw it, as long as you offer it.

I have some more suggestions. Did you know that the word management is from the Italian word, [foreign language 00:19:45]. It means, leading or handling horses. Isn’t that nice? An organization, or a team, is like a horse. I love the metaphor. In my language, in Dutch, [foreign language 00:19:59] is a place where we stable horses, so it all comes from the same root. Sometimes at Agile events, or scrum gatherings, or whatever, I hear people say, “Let’s get rid of all the managers. We have self organizing teams, we don’t need managers. Let’s put the managers on the list of impediments. Scrum master will deal with them.”

I understand the sentiment, but I do not fully agree, actually I do not agree at all. There’s a lot of bad management out there, for sure, but no management is not the proper alternative. Following this metaphor, you know what a fully self organizing team is? That’s a wild horse, you idiots. I’m not going to sit on a wild horse, and slap its ass, and say, “Yeehaw!” and then hope that it runs in the right direction. Who manages like that? I don’t. Definitely, we need something, to some extent, to constrain the horse, within a large area where it self organizes, of course, and that means that we have to delegate and empower, but we have to come up with a couple of restrictions.

Many people have no idea how to do this. Delegation, difficult. They see only two options, either I do the work, or you do the work. That’s a binary choice, it is not binary, I will show you. There are shades of gray, or actually colorful positions, between those extremes. I came up with the [inaudible 00:21:40] seven levels of delegation, based on situational leadership, that I extended a little bit.

The level one is dictatorship, basically. Let’s say, vacation days. I tell you that you will go on vacation in August, from the 17th until the 28th. Be back in the afternoon, by the way, because you go on vacation from the 29th to … et cetera. It probably doesn’t work like that in most organizations, right?

Level two is, sell, then you will try to convince people from your opinion, but you still make a decision. Level three is, consult. This is sort of the default at many more traditional organizations. People file their vacation requests. They fill out a form and ask, “Can I please go on vacation on these days,” and the manager says, “Yes,” or, “No.” That is level three. You ask everyone, and then you make a decision.

Level four is agreement, consensus. This is the typical Dutch approach. We talk, and talk, and talk, until someone died of exhaustion. Then the survivor makes the decision, basically. Level five is the opposite of three. Now, the team consults me, or I advise the team, like, “I think it would be wise if not everyone goes on the same days.” Within those constraints, self organize please.

Level six is, do what ever you want, but I would like to be included in the conversations. Inform me, would be nice for me to know. Level seven is, indeed, full delegation, that is, anarchy. You arrive at the office in the morning, and every morning is a complete surprise who is there and who is not. That is full self organization.

These seven levels are a symmetrical model, I like that, because not only managers delegate to teams, but teams also delegate stuff to the managers. It should be like an equal partnership between the rider and the horse, to use that metaphor. You can visualize this with delegation boards, or empowerment boards. Just show the different levels of delegation, with different key decision areas, such as vacation days, apparently, in this case, is level three, which means I make the decision as manager, but people tell me what they want. Team membership is level five. Okay, so I offer them suggestions, but they decide for themselves, but they have to hear me out first, because I think I’m actually rather smart, but they are allowed to ignore me.

This is clear. Clarifying to the team, or to the horse, whatever you prefer, where the fence is, basically. People find that helpful. Here’s a picture from a company that sent their delegation board. The photo’s from Bulgaria, but this is actually a Dutch board, and the connoisseurs would be able to see this. Let me tell you something about Dutch people. Dutch people love freedom, but they don’t like chaos. We can’t handle that. That is an interesting paradox. For example, has anyone ever flown into Schipol Amsterdam airport, anyone? Oh, lots of hands, all right. Did you have a look out the window before landing, and you saw those fields down there that were all very nice and straight and rectangular, as if Mondrian himself had painted the landscape, right?

Most of what you see down there is probably marijuana. But, we Dutch, we don’t care what you grow, as long as you grow it in a straight line. That’s important. No, really, we cannot have the tulips for the Chinese get all mixed up with the weed for the French. That would be chaos.

Anyways, so we see something similar here, on this board. For example, we see seating is level one. A seating arrangement. All right, so you sit there, you sit there, you sit there, stay seated, maybe little name plates, or something. On the other hand, salaries are delegated all the way to level six, which means, pay yourself anything you want, I don’t care, whatever, as long as you stay seated in the right chair. We cannot have people pay themselves salaries from any chair, now. That will be chaos. The Dutch brain is not equipped to handle that.

Anyways, so I have a couple more. This is a lovely, lovely delegation board. They adapted it, the added a new level zero, that probably means, I’m not even going to tell what my decision is. I don’t know, wonderful. This is a great one. This is from Germany, complicated, I love it. It was a very cool blog post, actually, from company in Hamburg, where they described that they use the board to clarify what people could do depending on their roles. For example, a junior did not exactly have the same area of self organization as a senior who had been at the company for 10 years. That makes sense. You simply clarify to the horse where the fence is.

There’s a little game, delegation poker, that some of you may be familiar with, that you can use to clarify, and to reveal the assumptions, because many people have an idea where the fence is, and it’s actually invisible, we don’t see it, it is somewhere, of course, but we don’t see it, so we’ll get people’s assumptions literally on the table. That can be a lot of fun.

I have been a manager for 15, 20 years, at various companies, one of them was a CIO of the company in Rotterdam, as I told you, and I introduced Agile thinking there. I introduced scrum, for better or worse, well, most of it better. Things were going fine, and one thing I am particularly proud of, is that turnover, at least in my part of the company, dropped from 16, 17%, to nearly zero. People enjoy their jobs. They were happier. They didn’t leave anymore, and that was very important for me. Other parts in the company, not so much.

I credit that to the success of the practices, like getting people organized as teams, self organizing teams, making them responsible for their own planning, the standard stuff, you know it. That led me to this question. Is it the success of these practices that makes people happier, or is it the happiness of the people that leads to more successful practices and outcomes? Hmmm. Let’s do a test. You can raise your hand only once. If you think that it is usually success leading to happiness, raise your hand. If it’s success of practices, the success of company, et cetera, that makes people happier. Okay, I see some hands, all right. Yep, that’s about 8.3%, I think. Okay, good. How many think it is the opposite. It is the happiness of people leading to more successful practice. Okay, I see a slight majority here. Yep.

I think I agree. I agree, actually, but I’m not 100% sure. I read a lot, and one book that I read was by Shawn Achor, the Happiness Advantage. He said, “We now know that happiness is the precursor to success, not merely the result.” He agrees with the majority here. But, Phil Rosenzweig, author of the Halo Effect, another book that I gave five stars, and he is a professor, smarter than I am, he said, “Does employee satisfaction lead to high performance? Probably, but the reverse effect is stronger.” But, he wrote satisfaction, and not happiness, which many researchers tend to equate, but some don’t. Complex. This is a very complex issue, people.

Well, whatever the result is, whatever the final verdict, we do know, for sure, that despite all the complexity, happy people produce more. They are more productive, and that is good, whatever way you see it. It’s a good thing for us, as managers, and for the people themselves, I’m sure. I was once thinking, “What are the things that make people happier?” I had this question, I came up with it when I was in Argentina a couple years ago, which is a fascinating country. Nothing works, everyone is happy. Seriously. They are ranked like one of the highest scoring countries in the world, when you check the happiness index, et cetera, but when you fly into Buenos Aires airport, there is not a single cash machine that can give you any money. Nothing works. There’s like a Cambrian explosion of error messages all over those cash machines.

Anyways, I was in Buenos Aires city center sipping a cocktail that I had to pay for by reselling the air conditioning from my hotel room. I was doing a bit of meta research, researching the research, basically. These are the things that I found that researchers seem to agree on that makes people happy. Thank someone, be appreciative to your colleagues. Give something to another person now and then. Help someone who is in need of assistance. Eat well, healthy food, and make those available. Exercise, work out regularly, and et cetera. Rest well, sleep sufficiently. Experience new things, try things out, experiment. Hike outdoors, enjoy nature, the fresh air. Meditate, mindfulness practices. Socialize, hang out with other people. Aim for a goal, a purpose in life, and your work. Finally, smile whenever you can, even when you have to fake it.

That’s what the researchers say. Even if you don’t really feel happy, just paint a smile on your face, and you will trick your brain into believing that you are a happier person. I call these the 12 steps to happiness, because they are decisions that you can make. Happiness is not an outcome, it is a decision. It is not a destination, it is a path that you can decide to take very day. I like that message. There’s plenty of stuff that we can do as managers here, as well, and as people.

Let’s do a quick test, let’s do a quick test. If, in the last 24 hours, you have thanked someone, I would like you to stand up, briefly. If you thanked someone in the last 24 hours, let’s see, let’s see. How many we got? All right, you see, I knew this. The Agile community is a very appreciative community. All right, thank you, that was the easy one. Okay, you can sit.

Let’s make it harder. Let’s make it harder. How many of you … Oh, this is difficult in the US. How many of you had good food, eaten well, in the last 24 hours? No pizzas, no hotdogs … Okay. Still a good amount, still a good amount, okay.

Let’s make it even harder. How many of you have applied meditation and mindfulness practices, in the last 24 hours? Wow. Oh, wow, that’s quite a good number of people. Fewer, of course, but I’m proud of you guys. Awesome, awesome, all right. Okay, you can sit down again.

How many of you had a brief two minute workout exercise just now? Yay. Everyone. I see you’re all happy, you’re smiling, I don’t think you’re faking it. All right, good. This is stuff that you can contribute to as a manager, as well, right? You can focus on these. I once organized code reviews outside in the sun with our teams. I literally had to drag them from their caves into the fresh air. “Oh my God, it’s so bright, turn it off, turn it off.” “No, that’s the sun, you idiot, you never seen it before? You can’t swipe it away. No, sit here.” We had a lovely, lovely code review, it was so wonderful, and we did that often. I call it hiking, it was just a few meters around the corner. I call it hiking, get out into the fresh air, and that was a great experience.

There’s a poster for this, you can download it, the 12 steps to happiness, and show it to your junior manager. These are things that we can contribute to everyday. I can do this right now, if I want. I can do it right now, because yesterday night, someone walked up to me and she said she needed my help. She needed my help to show a picture of someone, and I’m going to do that right now, and I know that person not so well, I met her like two or three times, but I also found a couple of emails in my mailbox. I decided to print, also, the last message of her that I found in my mailbox.

This, as Jean would agree, is thankfulness, and giving, and helpfulness, and this satisfies at least three steps on the path of happiness, all right. Let’s continue with the jokes, Jean would appreciate that, I’m sure, I’m sure. I have a couple more suggestions for you. Do you know from which company I stole this screenshot? Which company has said, “Our values are responsibility and sustainability.” Which big company? Anyone?

Audience:  [inaudible 00:36:47].

Jurgen Appelo:  Volkswagen, indeed. “Our values are sustainability and responsibility.” Uh-huh. I think this might be a rare case of German humor. Something went wrong here, right? Do you know what the real message was? The real value at Volkswagen, what was really appreciated, anyone?

Audience:  [inaudible 00:37:20].

Jurgen Appelo:  Money, very concrete goal.

Audience:  [inaudible 00:37:25].

Jurgen Appelo:  No.

Audience:  [inaudible 00:37:27].

Jurgen Appelo:  Size. They want to be the biggest. That was, according to several articles, including Harvard Business Review, that was valued. They wanted to be bigger than Toyota, and they became bigger than Toyota, for a few weeks, until, as the British say so beautifully, the shit hit the fan. I love that expression. I squeeze it in everywhere I can.

Something was missing here. Something that would be totally clear for people who are in the Agile community, which is a feedback cycle. Are we doing what we’re saying that we’re doing? Or, as the researchers are saying, are the espoused values also the enacted values? There should be some kind of feedback cycle closing this loop. There are different ways of doing that. I have a little practice with my team. We simply added a value stories channel on Slack that we use as a communication platform. On that channel we discuss things that are important to us, or that somehow connect to our values. Like, yesterday, I complained a little bit about my publisher, because, “Oh, they contact me and ask me how many more books I can sell through my own workshops.” Geez, I didn’t sign a contract with a publisher to get them as a personal coach to sell more books through my own channels. I can do that already. I would like them to sell books through their channels, they’re doing that, of course, by the way.

Sometimes something annoys me, or something that excites me, and I share that on our value stories channel. People remember stories, they don’t remember value lists. I cannot even remember three items when I go to the supermarket. I come back with two. I definitely cannot remember seven bullet pointed items on a mug or poster somewhere at the office, or something. It would be good first step.

You need some kind of practice that close the feedback loop, feedback cycle. Some companies handbooks, culture books, Zappos is a famous example, you can download their culture book. It looks very pretty, well designed, nice photos, et cetera, that shows how they’re trying to actually practice what they preach, which is awesome. I was at a company in Poland where people had gone around with a video camera recording each other’s stories, and that turned into a 10 minute video that they then used for recruiting. Just people’s stories of how enjoyable it is working at that company, Future Processing, in Gliwice, or around Gliwice. They even made a new version of the video with a professional Polish actor doing the voiceover, and it turned into an animation. I love that. I love that. It was emerge from the people themselves.

Other examples, I read one … I found a practice suggested by Frederic Laloux in Reinventing Organizations, another great book that I can recommend. He said, “Some organizations have annual company wide value days where they get together and just share stories of what it means to work at the company, and how they do what they say what they’re doing. Is what we do actually, is that what we say we’re doing on our website?” Makes sense to me.

This quote is one that I found on Twitter last year. It got thousands of retweets. The culture of an organization is shaped by the worst behavior the leader is willing to tolerate. As I said, it got thousands of retweets. We recognize this, right? If there’s something bad happening in the company, and if managers, leaders, do not intervene, then this will be the baseline of your culture, basically. Everything else will grow on top of that.

I prefer the positively phrased message, which is my own. The culture of any organization is shaped by the best behavior the leader is willing to amplify. Sadly, this did not get thousands of retweets, yet. Hint. Counting on you here. Let’s phrase it in the positive way, not the negative way. We mean the same thing, of course. Shine the spotlights on the good stuff, and when there’s some bad stuff, of course, we have to intervene there as well. 10 times as much wish you be focusing on the good things that are happening.

I have an example of that right now, as the final suggestion. This is another way of closing that feedback cycle. Here’s one of the most popular practices, at least controversial, for some, that is popular, means, is the same for many people. Are you familiar with the concept known as the bonus system? Yep. Yep. I see people nodding their heads, yep. It works like this, top management decides that some of the company’s profits will be shared with everyone who had been working really hard for that, in the first place, and by the end of the year, some people get a lot more money. Usually, what is applied, is what scientists call the Pareto Principle, or Zipf’s Law, or the 80/20 rule, which means 80% disappears in the pocket of the manager, and 20% goes to everyone else. This repeats in a fractal way to every next management layer, so by the time you get to the bottom, there’s almost nothing left. They call this trickle down economics for a reason.

Anyways, not surprisingly, this is not a very popular practice among those who did not get that huge amount of money at the end. Some people say, “Let’s stop doing this. No bonuses, just steady pay throughout the year. If we have something extra as a company, just turn it into regular compensation.” I do not agree. I do not agree. I understand the suggestion, I feel for people who suffered with bad bonuses, but this is not the way to solve the problem. Because, did you know that about 60, 70% of drivers think they are above average drivers? Me too. I read that about 80% of college professors think they are above average college professors.

These are smart people. They should understand the concept of average and 50%. I am very sure that among professional keynote speakers, 90% think they are above average. Has not been tested yet. What has been tested, I read this on Science Daily website just a few months ago, they asked people on teams, “How much did you contribute to the overall result as a percentage?” They added up those percentages, and guess how much they came up with on average? 140. People overestimate, in general, their own contributions, and actually, there was a correlation, the bigger the team size, the higher people overestimate their own contribution.

What happens when you pay everyone a steady amount of income that doesn’t fluctuate depending on performance, that doesn’t give any signals? Most people, 70, 80% will think they are underpaid, because they deserve more. It won’t be true, but that is what they believe, and you have nothing to disprove this entitlement among people.

I prefer something else. I prefer what my team and I call merit money. It is peer to peer crediting system, and it works like this. At the start of the month, every person on our team has 100 points, and throughout the rest of the month we credit each other for our contributions to the team, to the organization, or to each other. Like, 10 points to [Vorans 00:46:30] for helping me out today. Five points to Sergei for your super fast response times. 15 points to [Pilar 00:46:37] for not killing me when I screwed up the web server, and things like that. These points that we get from each other, they accumulate over time.

As the business owner, every month, I set aside some bonus money, depending on the performance of the whole system. Like a jackpot, this bonus money also builds up over time. The only thing left to do is to pick a good moment to decide who gets how much based on the peer to peer credits that they received from each other, we simply convert it to the money that is available. This is how we do that.

Louise:  Okay, dice.

Speaker 4:  Woah, woah, woah, come on, big money, big money.

Louise:  Anyone give it a kiss? Come on, come on lucky dice, we love you, we love you. It’s a six.

Speaker 4:  Yay [crosstalk 00:47:33].

Louise:  Can you see? Can you see that?

Jurgen Appelo:  We have a simple company rule. At the start of the month, one person throws a dice. If that person throws a six, we pay out the bonuses. No six, no bonus. That’s it. That’s easy. Simple, everyone can remember it. They look forward to the first meeting each month, and the reason we do it like this is so that none of us can predict when it is bonus payout time. We all know what happens when we are promised a bonus in December. People have spent the money before they even received it, and when it is less than expected, as it often is, people will feel demotivated again. “Oh my God, only $50, but I just shopped at Louis Vuitton.” Yeah, well, that’s your problem.

Not on my team, my team loves the bonus system. They think it’s their own little Las Vegas casino, and they can only win, it’s just a matter of when. The person who threw the dice, that’s Louise, sadly, she quit her job few months ago because she wanted to focus more on her family, but she was our dice thrower, because she had the lucky hand, according to the team. It was true, because in 11 months, she threw the dice six, three times, which is statistically above average. We were considering renting her out to people in casinos, but sadly she left. There’s an open position for a dice thrower on our team.

Anywho, so I get a lot of questions about this, of course, the most popular question, you can ask me other questions later, but I’ll give away one answer. The most popular question of people is, “Jurgen, does it is become a popularity contest? Isn’t it like the most popular guys and girls on the team get all the bonus money, all the credits?” I don’t know, maybe, maybe not. You just have to try and see. You already have a popularity contest with a traditional bonus system. It is called, kissing the boss’s ass.

What we have, on my team, is basically democratized ass kissing. I can tell you, I have to kiss a lot of asses in order to get a decent amount of bonus money. Yester day was Annie’s ass, today it is Louise’s ass, tomorrow is Jennifer, I see asses everywhere, I can tell you. Well, that’s what it means to work on a high performance team where people appreciate each other’s contributions. Work for it, and not just for a manager, you work for each other. I think that is at least healthier behavior.

Last few minutes. Did you know there are fail conferences? There are events where people celebrate failure. I hear it quite often at Agile events, as well, every now and then we should celebrate failure. There’s nothing wrong with that. I had a startup at the end of the ’90s, we wasted one million euros. Thank God it was other people’s money. It was an interesting time. Some people say celebrate that. Every now and then it’s good to celebrate failure. Let me see some hands. How many of you say, every now and then, it’s fine, just celebrate the failure, let me see some hands. All right, good number of hands are going up, all right. How many of you say, no, well, it’s better, actually, to celebrate success? Let me see some hands, celebrate success. All right, all right, okay. How many of you say, let’s just celebrate everything, failure, success, whatever, party all the time? That doesn’t make any sense, people. Gosh.

Well, I learned something from a book by Donald Reinertsen, Principles of Product Development Flow. Has anyone read it? You’re lying, it’s unreadable. He is 10 times smarter than every one of us combined. It’s full of information, theory, and [queueing thoery 00:52:01], I gave up halfway. But, I got the gist, I got the gist of Donald’s message, and I turned it into this illustration. Donald’s 10 times smarter than we are, but I am a 10 times better illustrator than the Donald. Donald said to me, “No, Jurgen, you’re 100 times better than I am.” We differ on the details there.

Anyways, this is what he meant. I checked it with Donald, he said, “Yep, that’s pretty much what I suggested.” When we celebrate failure, we celebrate this part of the diagram. That includes the failures from us just being idiots and making stupid mistakes. There is no reason to celebrate that. We can celebrate success, which is fine, but the problem is if this is the only thing that we’re celebrating, we’re sending people in that direction, we’re basically incentivizing people to repeat good practices because they have a higher chance of success. Then, who is going to run the experiments, which are in the middle, and where learning happens to be optimal. Oooh, let somebody else do that.

When people say, celebrate failure, I know that usually they mean, let’s celebrate the learning, even when we fail. That is more accurate. Remember that next time you ring the bell. Celebrate failure for experiments. I call this celebration grid. People find it a useful exercise, perhaps, at the end of retrospective, or at the end of a workshop, like I have done. Simply gather people round the white board, and draw a celebration grid, and ask people, “So, do we have any examples of great practices that perhaps failed? That’s interesting, those are rare, but it happens, good practices fail,” or, “Us being stupid idiots, mistakes, but we get away with it nevertheless. We have success, yay.” I am very good in that area, by the way.

It is a very useful practice. Sometimes I draw a funnel at the top to emphasize that we should pour more experiments onto the board in the next iteration. Here’s one picture that was sent to me, again, by a Dutch company, which you can see because they finished their retrospective just before five o’clock. Yay, done. So punctual. So punctual.

Anyways, so let’s recap. I hope you recognize some of the seven silver bullets that I have found in the last 20 years. It all [inaudible 00:54:46] managing the system for more happiness, and we add a dash of playfulness, run more experiments. I hope you’re going to do all of this, also, today, at the Agile event. Then we accelerate learning together. We innovate management, and hopefully we build more meaningful products and services. It can be in the smallest things, the smallest changes can have huge, huge effect. They call this the butterfly effect, by the way, in science. The butterfly flapping its wings in China, and then creating a thunderstorm all the way on the other side of the planet in the US.

Interesting fact, by the way, I read a lot of books, lots of complexity science literature, et cetera, and the butterfly effect is mentioned many, many times. Sometimes the butterfly is in China, sometimes it is India, sometimes in Brazil, but the thunderstorms always end up in the United States. That’s insane. You guys have a real problem over here. There’s this global network of tornado flinging butterflies all over the world. Fortunately, you will soon have a new president, Trump, who’s going to build the biggest butterfly net the world has ever seen, I’m quite sure.

All of this, and much more, is in this little book, Managing for Happiness, I hope that some of you will get yourself a copy. I will be walking around, or sitting around, with this bookplate, that I self created, self designed, it is the last drawing that I will make for a long time. I made all the illustrations in the book myself, but I stopped drawing because I like other things even more than drawing. I told my readers, people on my mailing list, “What are the things that you want me to draw for my last drawing?” Some people said, “I want you to draw a dragon.” “All right, it’s on there.” “I want you to draw a caveman.” “All right, it’s there.” “I want you to draw a team on fire.” “What? Okay, whatever. It’s on there. It’s all on there.” If you show me a copy of your book, or an order confirmation from Amazon, or something, then I give you a bookplate, and I will be happy to sign it for you.

Thank you so much for listening, and I wish you an awesome five days here at the event.

About the Speaker(s)

Jurgen Appelo is pioneering management to help creative organizations survive and thrive in the 21st century. He offers concrete games, tools, and practices, so you can introduce better management, with fewer managers. Jurgen calls himself a creative networker. But sometimes he’s a writer, speaker, trainer, entrepreneur, illustrator, manager, blogger, reader, dreamer, leader, freethinker, or… Dutch guy. Inc.com has called him a Top 50 Leadership Expert, a Top 50 Leadership Innovator and a Top 100 Great Leadership Speaker. Since 2008, Jurgen writes a popular blog at NOOP.NL, offering ideas on the creative economy, agile management, organizational change, and personal development. He is the author of the book Management 3.0, which describes the role of the manager in agile organizations. And he wrote the little book How to Change the World, which describes a supermodel for change management. His most recent book is called #Workout, which offers you practical ideas to engage workers, improve work, and delight clients. Jurgen can help you upgrade your enterprise with more engagement and faster results; He can show you how to become an agile business with better software; He shows you how to creatively manage your company; And he can inspire professionals with a purpose, advocating work-life integration for creative people. Jurgen is CEO of the business network Happy Melly, and co-founder of the Agile Lean Europe network and the Stoos Network. He is also a speaker who is regularly invited to talk at business seminars and conferences around the world.