How we work
We’ll publish our own picture here soon, below summarizes our current practice.
What do we measure?
- How happy we are (see Happiness Index)
- How happy our customers are. (actually, this point is partly aspirational. Currently our only systematic customer satisfaction metric is Net Promoter Score for course participants).
How do we finance the home?
To cover our costs, every partner pays a fixed fee per month + % fee of their revenue. These fees are intended only to cover the verseworks operational costs.
Why a fixed + variable fee? If we only had a fixed fee, consultants on the bench would quickly run out of money. And if we had only a variable fee, we might have trouble covering our fixed costs if many consultants are on the bench. With a fixed + variable fee, we get a nice balance that matches the fact that our costs are also fixed + variable. Swedish people apparently call this solution lagom – as in, nobody is totally happy and nobody is totally disappointed ;-)
We also have a ceiling, to limit the total fee a consultant pays to verseworks per year (variable + fixed). Some consultants earn a lot more than others and we don’t want them to leave just because verseworks gets too expensive.
See Economic model for concrete examples.
What do we do with the money?
This picture sums it up:
The guiding principles are:
- Naked in, Naked out – you don’t need to put in serious cash to join verseworks, and there’s nothing to cash out when you leave.
- No gold on the table – we don’t try to build financial value in the company.
- No pot of gold at that end – there’s no financial incentive to sell the company.
- A gold-strewn road – you keep most of what you earn, as you earn it.
Why don’t we try to build financial value? If verseworks has a big pile of money, that creates a financial incentive to own the company, and increases the risk of conflict as the “value” of the company goes up and down. If we keep the company lean, with only a small liquidity buffer, then we don’t need to argue about who owns what.
See Economic model and Ownership model for more details on how money flows through the system.
How many do we want to be?
- We don’t have a growth target. Growth is not a goal in itself.
- We grow only when we find awesome people and aren’t suffering from growth pain.
For more see Recruiting.
How do we run the company?
- Lean & Agile – our approach is based on lean and agile principles.
- Meritocracy & Consensus – we don’t have titles, managers, or reporting structures. Instead we are a meritocracy, which basically means your power to influence stuff is based on your competence and engagement. Decisions are made mostly using consensus (here’s how).
- Ask for forgiveness rather than permission – if you want to start or change something, go ahead! The default answer to any request or idea is “Sure! If you believe in it and want to put time into it!”. Very few mistakes are fatal or irreversible, so we encourage each other to just try things rather than seek permission.
- Simple models – being a bunch of smart engineers and process nerds, we can come up with detailed rules and structures for any kind problem. But we really try not to! We don’t want to overcomplicate things, and prefer to err on the side of simplicity. Better to have too few rules than too many, and better to follow high level guiding principles than low level detailed procedures.
For more info, see How we make decisions.
How do we differentiate?
How are we different from a typical consulting company?
- verseworks is not trying to earn money from its consultants
- 100% freedom for all consultants (as long as they don’t hurt the home)
- verseworks has no other goal than to provide a happy home
How are we different from a typical network of independents?
- We are dedicated to verseworks – that is, consultants are expected to do all their work and invoicing through verseworks.
Henrik Kniberg has written a blog article about how a similar company, Crisp, works. It describes some of the history behind the model.