Vivek Menon: How to Establish Self-Managing, Happy Teams in an Orthodox, Hierarchic Business.

Henry: Vivek is a Senior Director of Sales at Danfoss Power Solutions and I heard of Vivek on Teal Around The World and the great thing about what Vivek has done is that he's working within a large hierarchical organisation, is that right Vivek?

Vivek: [nods] Yep.

Henry: He’s working… So one department in the large hierarchical organisation is the eSteering department. What does that do Vivek? 

Vivek: The eSteering department is making the future steering solutions for off road vehicles; so think tractors, combine harvesters, large machinery like those. The steering for those vehicles like the automotive world where the Teslas of the world are making automobiles and electrified vehicles, the same is happening, but faster, in the off-road market.

Henry: So you're the Tesla of farm equipment is that right?

Vivek: Yes, exactly.

Henry: Excellent so what you've done is, within that department, you have managed to create self-managing teams, is that right?

Vivek: Since 2017 we started on this journey of establishing a self-managed team because the we were the first creators of a business unit at that point in time; before that it was like an R&D technology project: we were releasing these innovations to the world and we had reached the time when we thought ‘those innovations done now, we need to start making a business out of it’. At that point in time we felt that we had to keep pace with all these changes that were happening on the technology front and also be closer to the customer we needed to reorganise ourselves a little bit differently. 

Henry: So how do you enable a culture of trust and freedom within that huge hierarchy?

Vivek: Actually it's more about making people feel that the psychological safety of that trust and ownership is real and not something that we say falsely. One of the first things that I said to the team was that empowerment is not a just word. It's a word that's abused by lots of managers these days; they'll turn around and say ‘my team is empowered’ but then I'll say ‘show me the 5 decisions that your team took that you didn't agree with’. If you can't show me those decisions then I would say that you're running by approval and not by empowerment. So I think that the moment that I say no but the team goes ahead and executes anyway the trust and the ownership automatically comes. 

Henry: Can you give us an example of that? When you said no to something and they went ahead anyway? 

Vivek: One of the things is this: during the Corona crisis, like everybody else, we lost almost 40% of our business overnight and the Danfoss organisation said that every business, each department, had to make their own reduction/restructuring plan. And unlike my fellow peers,  who were sitting in a corner with the financial controller making their notes of what to cut or not cut, I just turned towards the team and said ‘Look guys, this is the situation right now, you know how the business has done. We need to make a plan.’ and one of our project managers said ‘Ok I'll take the responsibility of creating the list of actualities that we need to reduce.’ And he collated them And came back with the list of proposals and I said no to three of the topics on that list as I felt that they might be hurting our future and the reaction was ‘But you don't know the business as well as we do!’ [Laughs] So they went ahead and executed on the list of projects irrespective. For me it was more about the team commitment. So as long as the goal of what we had to deliver was met, the specifics of which topics and which projects were to be reduced, I left it down fully to the team’s trust.

Henry: Okay, okay. And you give people lots of information don't you? You give people financial transparency isn't that right? 

Vivek: Yes very much so. Not only financial transparency but also we invested in financial literacy. I think it's funny but a lot of businesses still don't have financial literacy in their teams, outside of the finance teams. You talk to engineers and they’re like ‘What is this money thing? And profit and loss thing? And every other thing?’. Well, you know, if you can buy houses and you can go on large vacations in your personal time you can also understand what P&L is and how your actions or your plans are going to impact.

Henry: Right. And how does performance management work? We've just heard about Helen’s view, how does it work in eSteering?  

Vivek: Well I just joined at the last few seconds of Helen’s part so I'm not sure what Helen said for her story. From an eSteering Perspective what we did first of all was to disconnect performance management and conversation and to have honest feedback and dialogue in teams; so we set-up facilitated 360 team based feedback instead of manager-employee feedback. I still remember one of our first sessions: one of our young ladies was extremely nervous and uncomfortable going into that team feedback session, not just because she was new in the team but she had never had feedback before. And later on we came to learn actually that the team was even more nervous than her giving the feedback, because you know both giving and receiving feedback of any kind, of critical feedback, is a skill in itself; so that's also something we invested in the team. Once the individual gets their team-based feedback then that individual takes it away and discusses it with a sparring partner of their choice, which is basically like a coach who can guide them on some of their thoughts, on processing that feedback, and then they go back to the team and say ‘OK these are the two or three actions that I'm going to take, based on the feedback, to improve my performance going forward. And then we do that every half-yearly so the individual is there, in the team, transparently committed to their improvement plans. 

Henry: So the sparring partner, tell us more about that. The sparring partner is that your coach? Is it your equivalent to a manager? What are they?

Vivek: We purposely chose to disconnect it from any form of hierarchy, of any formal set up. We asked people to volunteer as sparring partners, to be these coaches, mentors, guides, for people who want to pick it up. Because before we had self-management setup we had about 5 managers in the team and then when we asked for sparring partners we ended up having 12 sparring partners. Some of them were very very young people and the interesting part was people who wanted to learn some new technologies, such as artificial intelligence and so on and so forth, they chose some of the younger ones to be sparring partners. Because again it's linked to your own personal trust and development needs, and so on and so forth, if I or somebody else was their manager maybe they have no interest in developing in areas where I have expertise in or I have knowledge in.

Henry: Uhhuh. Okay. And how do your meetings run? Do you have one or two people dominate or how does it go?

Vivek: We were running by the sociocratic processes. So we do the governance meetings and tactical meetings that is our structure for ensuring more decent life decision-making and our meeting process. And one of the things is, for example, I'm one of the more talkative leadlings and my facilitator is a very strong facilitator, he’s very clear in how we are running the meeting and if I'm starting to dominate a meeting he will cut me off, publicly. And when that happens publicly and people see that in the meeting and see that happening across the board I think it creates a lot of trust in running things that way.

Henry: And do you use circle time?

Vivek: Sorry?

Henry: Do you use circle time in your meetings?

Vivek: Circle time? I don't know what circle time means. We use all of the normal sociocratic processes: so clarification round, objection round, integration of objections and so on and so forth. So I don't know what circle time means.

Henry: Oh, okay and what's it like… how does the rest of the organisation work with you? Do they, if a director from an external department comes in do they find it weird how your organisation was working?

Vivek: Yeah I think they find it very uncomfortable. Because this is not actually how most teams work. What we have always done is that we have invited people, especially from the more corporate functions like, you know, HR, procurement, IT and so on and so forth, so they could understand how we were functioning from day one. The sooner we had these corporate functions as part of our process they were then able to work with us instead of just standing there saying ‘This doesn't work, this doesn't work’. 

Henry: And what's been the effect on the- presumably they measure, your senior bosses measure things on the KPIs- what's been the effect on the KPIs moving from hierarchy to self-managing?

Vivek: We describe ourselves as a teal dot in an orange circle. We are a small business unit within a large staff, so the results that we have to measure ourselves against is all of the orange. Which is financial, KPIs and I'm quite proud to say that we exceeded all of our goals financially: top line, bottom line, and also all of our employee engagement, we are one of the topmost in the business. For me, both on the business side and the people side, we beat all of those KPI's.

Henry: Excellent and what's the impact on you? What are you able to do now?

Vivek: I think one of the things that people always complain about as leaders is they don't have enough time to look forward, to look to the future, to look strategically and that's what I spend my time on, instead of worrying about operational decisions and discussions. So if any manager comes to me and says ‘Oh I don't have time to make future decisions’ I say ‘Yes that's because you're spending too much time on operational things’. That's what enabled me; it was not easy to let go of that control. I would say command is easier to let go of than control. It was illogical for me also because starting off you feel like ‘OK how will this work?’ because we were kind of building the plane whilst we were flying, but once you get used to it gets more comfortable. And the team also gets to work with it and then it's fine. 

Henry: Okay okay. Let's pose a question then. Shall we ask what could you do to become more self managing of people? 

Henry: Are your practices a clash with the organisational culture?

Vivek: It depends what you define as the organisational culture. In a company of 40000 people you're always clashing with one another. We have at least 50 to 70 business units And they are all running different things so it depends on the definition of organisational culture. We defined for the organisation, that's 40000 people, three behaviours: Frontline passion; focus on the customer, run the business as your own, and think ‘what is the benefit for Danfoss?’. These are the three things and I don't think there's any clash with those three organisational cultures when we do self-management.

Henry: Right, excellent. Well it is clear you've done very well there. I'm going to have to stop it there because we need to take the next break; but Vivek thank you so much, that was really helpful. I always get asked, you know, how do you deal with a hierarchical organisation? And that's a really great example.

Vivek: Afterwards, if anybody wants to get any more details I'm happy to connect, my LinkedIn is available. So thanks a lot Henry, thanks for having me.