 My name's Sandy, and I want to talk to you about self-selection. How many in this room have heard about self-selection and know what it is? A very, very tiny few. And that's excellent, because what I hope to do in the next 45 minutes or so is blow your minds at least a little bit. Self-selection is a process of allowing people to pick the team they want to work in. And it's based on the idea that people perform best if they work with the people they want to work on the things they want to work. And we have done this in New Zealand, and it has worked really, really well for us. So what I'd like to do now is ask you one more question. You can close your eyes if you like, but you don't have to. If you think that I walked into your organisation next week, and I told you, hey, everybody please down their tools. Don't do any work for a day. But please think about which team you want to be in and who you want to work with, and you'd be allowed to pick your own team. What do you think is going to happen? Would it be easy peasy, smooth sailing? Yep, I'll talk to you in an hour. Or do you think it would just be complete chaos and would never work? If you think of what work in your organisation, just raise your hand. Very few people. I promise you in 45 minutes more of your hands are going to go up. I want to talk about a time where we did exactly that. I worked with TradeMe, which is New Zealand's biggest e-commerce provider. It's a company of now 450 people, and all 450 of them have chosen themselves. Hello over there. And all 450 people have chosen themselves which team they're working in. And against the backdrop of this one story, I wanted to share some ideas and some concepts with you about how self-selection could work. We have done this with 250 people in a room at the same time, and it worked. Let me know if it moves again. So what I want to do is tell you a story about TradeMe. TradeMe is New Zealand's biggest e-commerce provider. And I want to tell you that story to be the backdrop of which I want to share some concepts and ideas around self-selection. We have learned a lot about this. We have learned a lot from our very first self-selection. And we have taken this to a huge number of subsequent self-selections that have worked well. And the good thing about sharing, the good thing about blogging, about taking the time to write a book, to write a self-selection kit, to get people to share experiences is that's ideas spread. So far, I know of 5,000 people in more than four and 50 teams in over 10 countries that have chosen their own teams and have picked who they want to work with. And that's just the ones I personally know of. But back to the story about TradeMe. TradeMe is the New Zealand version of eBay. We sell pretty much everything. We sell property, we sell motors, and we sell anything that's used or new, anything anyone might want or doesn't even want. We are now around 500 people, and we also conduct, we also are responsible for about two-thirds of New Zealand's internet traffic. We also sell 3,000 chickens every single year. And I'm not telling this to brag, but I just want to give you a scale of what we are facing and a scale of things around something that is quite risky in a company where you know that if you bring down the site for even 10 minutes, you're going to be on the front page of the National Newspaper. And TradeMe is a really successful company, but it had one problem, and that problem is success. If you're successful, what happens is there's more work to do. If there's more work to do, you hire more people, so you grow. And that's great, but it's also really, really painful because there's a tendency to introduce a certain element of chaos. And what we were facing was something like this for our projects. It's basically stop, go, stop, go. And the reason that was happening was because of the way we were organized. Whenever there was a new project, we found people to get together and deliver that project. And then for the next project, we found people again. The problem with that is that whenever you finish a project, the other people you're waiting for aren't necessarily ready. So you're waiting for someone else. You finish development and you wait for a tester who's still busy with something else. So we knew we needed to change something because even though we were deploying twice a day, we were really bad at getting the bigger stuff out the door. So what we knew was we needed to have stable teams, small cross-functional stable teams. And it's not something that we just wanted because we liked it. We had a problem and we wanted to have a solution for it. But we also knew that stable teams perform way better than teams that are being stopped and started at every project. There's some research done by Raleigh, which used to be a project management software for agile projects. And they looked into the customer's data and they found out that teams that were 95% or more dedicated had almost twice as much throughput as teams where people were on and off, and people were on more than one teams. But with those 60% higher performance, that's all very nice. And it's especially nice if you are Spotify and you're born agile. Any of those younger tech companies where you don't have this huge legacy, your own teams are ready so you can make some changes. But what about the rest of us? We basically had a pile of people. We didn't have teams. What we knew was we wanted and needed to get into stable teams. There's more research and the number of 60 seems to be magic here. And that research is by a guy named J. Robert Hackman. He looked into counterintelligence teams and what he found was the 60% of variability in performance came down to team design. And that just doesn't mean the right skills. That means the right team size and the right people who can work together. It corresponds quite well also with my personal experience because very often have I seen teams that are made up just of stars dramatically underperform. Apart from the 60%, 30% are dependent on how you kick off a team, either at the very beginning or even later on. And 10% come down to coaching and leadership. And just in case you're thinking 10% that's nothing, that's actually a lot. It's just if you haven't got the team design right, there's no point working on the other stuff. And because team design is so incredibly important, what do we do? We have managers select the teams. And that's not necessarily a bad thing. There are no bad intentions behind that. It's just very important managers need to do that. And it can actually work well. We have really good managers that trade me. We have people who are well-intentioned, who want the best for the people who work at trade me, and who also want to help them with their careers and have them work in the best possible teams. The problem is it doesn't scale very well. If you're like 10, 15 people, you still know everyone and you know everyone's relations with each other. If you're 100, 200, 500, you don't, even though you're a really good manager, because it gets more and more complex the more people are involved in this puzzle. And personally, I found it really, really frustrating because the number of times I've been in management meetings and we have moved people around, like little pieces in a puzzle, trying to do what's right by that person. Only to find out that the person we just moved really doesn't want to work in that area and also he doesn't get along with that other person. And it was really, really complicated and we weren't very good at it. And while we're stretching our heads, knowing that we wanted small cross-functional teams, we also got into time pressure because we had started an agile adoption with four teams and they were having a blast. You could hear those guys have fun and people, and they loved what they were doing and then there was everyone else getting more and more annoyed to start. And people were starting to feel a bit like second-class citizens. And while we're scratching our heads and wondering what to do, how to do this safely and quickly, we had something that we call a FedEx Day. It has been renamed to Shepherd Day but fundamentally it's a hackathon. It's a 24-hour hackathon where people are allowed to choose to work on a project of their choosing. And what we saw at that hackathon, at that FedEx Day was that people managed to get into small teams and work on the projects they loved. They delivered really good stuff. We have a virtual receptionist. We now have a book-of-room application where if you're standing outside a meeting room you can just book it. And we also have an app that tells you whether someone is in the shower. It's not a camera, by the way. But what I noticed during that FedEx Day was that people were passionate, happy and joyful, and they delivered. And they also put themselves on teams that were small, cross-functional, could deliver into ends, and that didn't need anyone from the outside to assign them to a team. Just chose those teams themselves. One person on one team. So we knew this is what we wanted, and we knew that we wanted to have something that we call the title of squadification, which is the prices of getting into small squads, small teams, really, really quickly by letting people self-select. And we did this in the assumption that people know best, that we wanted to push the decision around what teams we need and who should be in which team. We wanted to push that to the people who are more affected, who are closest to that bottom line of work. So they knew they had way more information than we had in management. And we decided that we needed to find a way to treat people like trusted adults who could figure out a solution to a puzzle. And we did what every single person of at least average intelligence would do. We Googled it. Because surely someone had done this before. Someone would have done this at the scale and published a process. Have you ever seen an empty search result page? It's pretty much what happened to us. Turned out either no one had done this at this scale, or at least they hadn't published any how-to's. So we knew we had to do this on our own. And if you do something, we're not sure if anyone has done this before or not. You're either onto something really, really cool, or you're just batshit insane. And we didn't know which one of those we were. And we were really worried, because we were messing with one of New Zealand's most famous companies. Using a process we hadn't used before. And we were worried if we just had people and we moved them into a room, they'd fight. They would maybe not even show up. There'd be some poor guy in the corner and nobody would pick him a bit like the school yard. And what do you do when you have something that's actually quite scary? You scale it down. You scale it down and have a small trial. And that's what we did. So we chose one of the cities we were present in, in Auckland, where we only had 20 people. And we chose to trial self-selection in Auckland. The main thing that we learned is it works. We had a really good experience. It worked really well. And if people are trusted to do the right thing, they will. We also learned that if it takes us four and a half hours to get 20 people into four teams, if we want to scale this up, we need to speed up considerably. And two things were there that we realised. One, there is no point having iterations that take more than 10 minutes because no more decisions are being made. And the other is that we need to be better to communicate the status of each squad to each other so people can make better decisions. So for the trial that had succeeded, we decided we could just go all in. We needed to make this happen. We were fearful, but we also knew if we are scared and excited, it would be in the right place. And it was the right thing to do. The first question people usually ask me is how do you get away with this? How do you convince management? And actually, what has worked for me many, many times is not asking. It doesn't mean you do anything in secret. It just means you're totally transparent around this is what we want to do, this is why we want to do this and those are the benefits. From management point of view, if you've got people who are in good teams who perform well together, performance will go up. And you also know as a manager that if someone's not totally happy on the team they're on, they can't come and complain because they've chosen this themselves. And ultimately, from management perspective, what's the worst that can happen? You get everyone in a room, it doesn't work while you're wasted a day or maybe half a day. You can still go back to Plan B and do management selection. But it's not just management. It is also people who get really, really worried. People who are used to working in a certain way and all of a sudden they are being asked to pick their own team. And people get worried around can we actually figure this out? What if I choose the role team in running away my life? By the way, you don't. But people have all those fears and that's quite natural. So what we did about that is we talked to people. We almost had a PR campaign where we did an all company presentation. We sent out emails, we sent out newsletters. We had frequently asked questions and we talked to every single person who was interested in talking to us. What I did find really, really interesting was that there seems to be almost like the stages of mourning, a process that every single person is going through, including us. Well, whenever you mention the concept of people picking their own teams everyone goes, whoa. And after a little while when they have thought about it people start to think, well, what if this doesn't work or that doesn't work or that doesn't work. And a little while later they say, what if it actually does work? Wouldn't that be totally amazing? And then they go to the latest stage where they decide, well, so how are we going to make this work? And the main thing around making this work is to be prepared. This is the head of the PMO and me, we're looking out over in the harbour in Wellington, New Zealand trying to figure out how the hell we would come up with a process that would make this possible to have 150 people in a room and make themselves select. Because we also knew that this needed to be well facilitated or people wouldn't trust us and it could easily end in disaster with people fighting and not working. Here's a brief overview of the process that we came up with. I know you can't read that but I'm going to share it and I'll talk you through. But the basic idea is that there's a preparation phase and then on a day everyone is being lit into a room. And while they're there, the first thing that happens is that the product owners pitch for their teams. They have two to three minutes to explain what their squad is about. When that's done, we take ten minute iterations where people choose which team they want to be in. Then there's a break where there's feedback, see which squads are missing something complete and then another ten minute iteration. And we're done when either all the squads are fully formed or you can't make any more squads. And the first thing that's actually not that easy is defining squads. If you're coming from a project organisation where things start and stop with projects, you basically have this pile of people. You don't really know which squads you need because you want them to be lasting longer than just a project. You want the group of people who have a purpose, a purpose where they can do many projects. They need to have a purpose and a mission. And this is basically structuring the organisation. And we also try it as much as possible to give those squads an external purpose. Because really what we wanted was people who would buy into their squads and also what they're working on. So all of them had an external purpose, like a customer facing purpose. For example we had a seller squad that made life as great as possible for sellers and trade men. There's a property buyer squad taking care of property buyers and so on. So we ended up with 16 of those empty sheets of paper that we needed to fill. And there's actually more to just having because we're quite deliberate around the size of this. One of our constraints was we didn't want to have more than seven people in a squad. So with the photos we had, there's no way you can get more than seven people into a squad. And also, this is the only role, the product owner was the only role that was pre-selected. And we did that because the way we hire product owners, their knowledge is very specific. It's quite rare that someone who knows a lot about property selling and buying also knows a lot about cars and motors. So we had those people fixed but everyone else could choose. And that was also the reason that those guys were taped to the squad where everyone else was movable. We tried to keep the number of constraints really, really low and this is what we had. Have people going to deliver into it no more than seven people and we wanted them to be co-located. We're in three different locations so sometimes it wasn't entirely possible but we'd rather have a full squad in one city and another full squad in a second city rather than a squad that was spanning two of the cities. The day before we had something that almost was Arts and Crafts Day. Cutting out 50 people's photos. It's a lot of work by the way. And we had little skills card because by keeping the squad small we want to make sure that people didn't just remain within the specialties but they could almost wear hats. They had skills that they could put on top of the photo and this is something that could come and offer to squads. So on the big day after lots of prep after lots of convincing people we were two facilitators who were ready, two backup facilitators who would help us read the room and were totally ready to go. This is the room where it looked beforehand. We had the squads papers around the walls making sure they weren't too close to each other because we wanted people to take the photo put it into the squads they wanted to be and physically move there. We also said hello to every single person who arrived and asked them to take their own photo and write their name on it. We wanted people to buy in from the very first seconds and here is the very beginning where product donors pitch. Product donors it really is two to three minutes and it's just a mission and the purpose, not any particular project and they tell people why they would be in that squad. All of this against the backdrop of a banner which says do what's best for trademen. Because yes, we want people to be happy. We want people to work on whatever they want to work on but also really we were asking for help. We were trusting people to solve a big puzzle and do what is best for the company trusting them that they would do a better job than us. And once we were done with that we just set a timer to ten minutes and people started moving around and we started go with a timer on the wall. This is what happens. It's pretty much nothing. It's really awkward because the first two to three minutes in every single self-selection that I have experienced everyone's really cagey waiting around, hoping that someone else will make a move. That's the time when you don't panic because three to four minutes later this is what it starts to look like. People start interacting. People start talking to each other. They start thinking through what is and how they can solve this big puzzle. If I go over here, what would that mean for that squad over there? After ten minutes we had a feedback round and we stopped and asked people to feedback what was happening in that squad. That looked something like, hi, I met from the seller squad. We have three testers and one developer. We need developers please. And that information could feed into the next round. By the way, I've never ever seen any company get this right in the very first round. I have seen squads with seven testers and nothing else. But the thing is, it's okay because all you need is the feedback and those things to surface and that feedback goes into the next round. It usually takes three to four rounds at that scale to get to a good result. And the next question is so when do you actually stop? At some point you just don't get any movement anymore. It's also if you're that many people it'd be too much of a coincidence to just have the exact number of people and skills to go from more than 150 people into 16 to 18 squads. It's impossible. So what we did was make sure we had a cut-off point. We knew that playing another round would not be helpful. So we knew that we had 11 squads that were fully formed that could deliver end to end and got a tick. We got four that were not reading. By the way, it's a lot better to have fewer squads but fully formed than have all the squads 90% reading. So what we did was we sent the 11 fully formed squads home and we kept everyone else in the room. We kept 20 people back in the room set right. We actually want to find a solution to this. And what's really, really important is making clear to those people that they are not the Muppets nobody wants to work with. It's just too much of a coincidence that this would actually be a perfect fit. With 20 people in the room, it's a lot easier to have a conversation. So we took all the photos off and what happened after that when people had more conversations and some people even started to sacrifice themselves, like yes, I can do this for a while because this is what my company actually needs. We ended up with 15 out of the 16 squads that we wanted. And to be fair to those guys we gave them the opportunity to come up with imaginary friends. They were missing a tester and they were missing a designer. And keeping in the spirit of self-selection we made sure that those guys had the right to hire someone from the outside into their squads. So that worked well but what did we actually learn? And we learned a lot not just from this particular self-selection but also all the other self-selections that I've done and that people have talked to us about. There's a number of things that go again and again and again. One of them is it's all about relationships. People don't usually admit it like we sometimes ask them so what did you base your choice on? What's best for trade me? What I wanted to work on? Who I wanted to work with? Or who I did not want to work with? Almost everyone said what's best for the company and what I wanted to work on. I think that's a total blatant lie because it's really not consistent with my observations. It's just people believe it's not okay. And the observations are for example that when so many people have to do an event together someone is going to be sick someone is going to be on a holiday and we have asked those people to nominate proxy and all the instructions every single instruction to a proxy has been whatever you do with me with you. And the other thing that we observed was sometimes people did not want to work with each other. We had a couple of Dutch people and whenever they ended up in the same place one would take their photo and put it somewhere else and then maybe they ended up in the same spot again at which point person number one would move again. You know what? It was actually okay but if just two people don't want to work with each other and that's actually okay and they didn't have to work with each other. People also always have the same questions before going into self-selection. Does that look vaguely familiar of what you might be thinking? I'm happy to answer those because most people aren't what's front of mind for most people is some people just going to get into fights and just start arguing and bitching. You know what? They don't. Not a single time have they done that and the reason is that when we treat people like trusted adults they behave like trusted adults and that doesn't mean that everyone got to do to be in exactly no squats they wanted to be in. There were conversations there were compromises and not everyone ended up in the squat but if they didn't they all knew why they didn't end up in that squat. Some poor guy in the corner who doesn't get picked everyone seems to have the school yard image of someone trying to find a team but they're not being picked. The thing is, in a self-selection process like this nobody picks you put yourself into a squat and then you talk to people. There's no selection they're not picking whatsoever but we also take care of people who really don't know where they want to go so we usually have a section that is not in a squat please approach me. How do you persuade management? Talk to them, manage the risk and just make them part of it and it works but what has happened more and more recently is that we're being approached by managers who want us to do this with our own organizations and the main thing when you do this is people are fearful people are not sure if they can actually sort this out so what we need to do is give people the confidence that the way they naturally get into teams is okay and they can totally sort this. They're also not signing away their lives if they get it wrong and really want to switch afterwards we ask people not to switch after a couple of days but also because they should give it a try but if they really don't like the squat they're in they can move on and then there's the usual can you please add this constraint what about should we have one junior one senior developer should we have a certain amount of domain knowledge and it's really really tempting to do this but it introduces complexity every new rule introduces more complexity and it also pushes us towards management selection and re-opened makes us not see solutions that might be in our face and aren't they really unpopular areas the thing is if there are wouldn't you rather know that they are really unpopular so you can do something about it also they're usually different from what you think just because I think some piece of work is really boring doesn't mean that everyone else thinks the same they usually don't usually really surprising that's different areas from what I thought would be unpopular the only time I've ever seen self-selection not work is when it's not true self-selection we have a saying which is liar liar hands and fire if people pretend that there's self-selection if management tells people they can pick their team but then suggest which squad they should be in or I've also seen it when people have chosen their squads and after that management made some changes and I believe it's better to not have self-selection at all but to have an honest management selection then to change something that people have done and after our very first self-selection how things going we track how things are going in our company by asking people a questionnaire a number of questions in the three months they're based on Daniel Pink's autonomy, mastering, purpose and what motivates people we also added relationships and creativity at work and what we've seen is that people's happiness overall increases but the tendency is that people like what's happening we are now more than 45 squads and we're still growing and there's one thing that has been really really important for the employment brand people join TradeMe because they get to pick their own team and that's really really great there's one problem with that if you join after the self-selection and you join because you want to pick your own team it's really unfair not to let the new people pick their own team so what we do is we start hiring into squads where they're assigned to squads but every six months we have a new self-selection where people can choose again where they want to work it makes the choice a lot easier and a lot less risky and you can do something and say hey for the next six months I'm going to take one for the team or work on something that's not my first priority and people actually do that and when new people join we now have part of our induction program that we teach them about self-selection why we do it and how we do it and that it is a privilege to do so and I think that's important knowing the history is really important because when we're stressed we're really revered to command and control so this is part of our culture now and we want to make really really sure it remains part of our culture so why does it work I think self-selection works because the people who have the most information make the choice it works because people have skin in the game they buy into this and it works for them because they make it work and also because we treat them like the trusted adults they are I'm always marvel at the fact that we let people take bank loans buy houses, have children things that are way riskier than picking a team at work and when they come to work we tell them what to do and we're to sit so I think when we treat people like adults they also behave like adults and I want to now post the question again after what you have heard do you think someday in your organisation self-selection will work if so, as you hand I hope it's a lot more I hope that someday you can make it happen because I do think it is really liberating and empowering to be able to choose who to work with and what to work on and if you want to give it a shot there's a how-to in my book and there's also how-to on the blog there's just one thing I'd like to ask you if you do it please drop me an email because I'm collecting self-selection and I'd really love to hear from you and how you're going I think we have time for questions 5. What are some of the problems I have seen or perceived in this approach there are there's a journey towards that point where you are spending time and maybe in the short term you are investing time what I've seen is that you get that time back in the end you invest a day, you invest communication there's maybe some time problems long term I've actually not seen any the one thing I've seen is that's now four years after our first self-selection it betrayed me people take it for granted okay, oh yeah I'm here and I it's my right to pick the team I want to work with and they forget about the why that it is because they actually solve a big problem okay we re-squadify every six months was there any basis for why we chose six months no we just put a stake in the ground yeah, six months sounds okay and we would have changed it sometimes we did change it like once we had a complete re-architecture nightmare and decided to go for nine months and that was okay but usually it's a six month cadence check if I understand it right so how do you deal with the behavior if managers are trying to keep their own resources first of all we did not change any management structure if I report to my manager it doesn't matter which squad I am in I still end up reporting to that manager so we kept that and we also had both the culture and the structure where we did not have one person being responsible for a particular outcome so we are one company or we are one tribe and all the managers in that tribe have a shared purpose there's no my team versus your team my project versus your team and I think that's a question of culture and if you don't have it you change it it's going to take a long time how do you balance a project that's longer than six months versus a squad that re-squadifies every six months first of all the all our let's call them projects are way longer than six months because it's a squad with a purpose they stay together for years the salad squad and if we re-squadify with six months it's up to people to do what's responsible if all six of you decide to do something else that's not what's best for your company if you ask them that question I've also never ever seen that entire squad just spanned and went somewhere else you usually have one or two people deciding to move on why didn't we want co-location of the teams it's a lot easier to just turn around and talk to someone rather than seeing an email use Slack or anything so the more physical distance the harder it gets in that case I wouldn't do a self-selection around the globe I would do a self-selection each location there's fully formed teams in India they're fully formed teams in New Zealand and we'd ask you to please not do a team that's half Indian, half New Zealand I'm getting I have a conversation with you in a minute hang on and I'm getting the did thank you