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I was recently trawling through my Google Reader subscriptions and came across a post about workplace experiments, which struck a chord with some of the things we do at hedgehog lab to make it a great place to work for our team.
We don’t call what we do “workplace experiments”, as it is just standard practice for us. I thought it would be good to list out all the unique things that we do to enhance everyone’s jobs here at hedgehog lab. I appreciate (given the heated responses to the 37signals post) that these won’t and can’t apply to everyone, so I am in no way recommending these as best practice (although I have yet to get anything but staunch support from our team on these).
4-day week
One of our founding principles was the 4-day week. With the exception of client demands (as we still do some consulting), we regularly work 4-day weeks. No one is required to come into work on a Friday if they do not want to. The problem we are facing is keeping our team away on a Friday! The reality is, if you create the right environment and give people a goal to work towards to, you will have a tough time keeping them away from work.
Expenses
Although we do not offer everyone a company card, we never say no to anything that someone in the team wants (that is reasonable). Books, software and conferences are paid for by the company as long as we can afford them (see you at @media 2008). This ensures our team gets what they want without spending the time getting them; allowing them to focus on getting on with their jobs.
Working from home & Flexible hours
One of the toughest things you can do as an “employer” is trust your team to get on with their job without constantly looking over their backs. Therefore, most working from home policies for office-based businesses are either half-baked or cosmetic at the best. Not so at hedgehog lab.
Our working from home policy is completely flexible and anyone from our team can work from home at management’s discretion. So whether you are having that brand new laptop delivered home or you need to see a doctor miles away, you can rest assured that it will be stress free.
Similarly, our flexible hours are actually flexible. When most companies use the word “flexible hours” they mean that you can come in an hour later but have to stay back an hour later too! When we say “flexible hours”, we are saying “we appreciate there will be times when you cannot get into work on time or want to leave early and we are fine with that!” There is no need to stay later or come in earlier to “make up the hours”. I have yet to see this being abused at the lab!
Profit sharing
Unfortunately we don’t have a bonus scheme at hedgehog lab as we feel that it depends too much on the whims of the person deciding the bonus and offers no real method of measuring contribution.
At hedgehog lab, we have a flat profit sharing scheme. It works on the basis of setting aside a share of our profits every year and dividing this equally between all team members. No matter what your role, junior or senior, director or developer, you get an equal share of the profit. Of course, there might not be a profit to share but that means no one gets an incentive. We feel this is a great way to reward overall performance of the team and company while ensuring no one feels singled out.
Overtime
Although we frown at overtime for our internal projects, work for clients sometimes dictates that we are forced to ask some of our team to work overtime. We accept this as a by-product of service work but instead of fighting against it, we embrace it by innovating on how people are paid for overtime. Instead of paying overtime rates of 2x or 3x times someone’s hourly rate, we pay them the whole amount that the company makes for that work from the client. You heard that right!
These are just some of things we try and do to make life better for everyone in the team. I would be interested in finding out what works for other people and welcome any debate on our approach.
posted by Sarat Pediredla on March 6, 2008 at 9:08 p.m.
Davey Brookes commented, on March 11, 2008 at 2:33 p.m.:
Do you guys make any money at all? You seem to be giving it all away to your team for ‘experimenting’ and rocking up whenever they feel like it.
Sarat Pediredla commented, on March 11, 2008 at 2:33 p.m.:
Davey,
We make plenty of money, otherwise we wouldn’t be able to grow and hire more people. As I mentioned in the start, we are not “experimenting”! That is just our culture
Kris Garcia commented, on March 11, 2008 at 2:34 p.m.:
Quite interesting. What I wonder is, how did you get upper management to buy into this. I’m not denying the fact that the methods you described can have positive effects on your bottom line, but I doubt that the people in finance and accounting see it that way. Is your CEO a developer by any chance? How did you develop this culture? Is this something that was there from the very beginning or did you at some point decide to try these methods out? And if so, what failed and what didn’t. Also, I know you are a technology company, but I’m sure you have other departments, whatever their size may be. How are they treated?
Sarat Pediredla commented, on March 11, 2008 at 2:34 p.m.:
Kris,
I am upper management. And yes the CEO is a developer :). We are all developers at hedgehog lab.
We are a small (micro) company and our finance and accounting roles are outsourced (that discussion for another day). Our culture existed from day 1 and many of the points are our founding principles (which we hope to have online soon).
I am sure as we grow, we will learn lessons and I will reveal those as they come. For now, these methods work great for us.
Jonas commented, on March 11, 2008 at 2:35 p.m.:
This sounds like a come-on. Sarat, your post reads like that of any young startup looking to recruit. Except that you forgot the free snacks and “break room”. And don’t forget the week-long company trip to (insert paradise name here) that your planning.
As a consultancy, without taking venture money, you’ll only be able to grow so much in a long stretch of time. You, and the rest of your webtrepreneurs will mature and realize that you’ll have to get a real job to pay for the family car and the mortgage. It’s inevitable.
On the other hand, should you be offered venture funding and you take it, they will soon put an adult in charge and your non-experiment will be stuff of legend used to lure promising, young developers on board. In the end, everyone at hedgehog (Ron Jeremy, anyone?) will end up putting in 40-50 hours a week at the office or client site, begging for books or supplies and dreaming of a conference. Not to mention a raise.
You have the right idea, but to wish you luck would be futile. How do I know this? I had a jobs at companies like these before, during and after the last bubble.
My advice to you is to build the company organically and then sell it. Share the least possible amount with your partners and never take venture capital. Then do it all over again.
John S commented, on March 11, 2008 at 2:36 p.m.:
Sounds like an awesome place to work! are you hiring? Just kidding. But seriously I am thinking about approaching the company I work for on a couple of these things, like the conferences. Any suggestions?
Sarat Pediredla commented, on March 11, 2008 at 2:37 p.m.:
Jonas,
We don’t have free snacks and “break room”, so I skipped those :). Neither did I say that we plan to grow as a consultancy. We have some core clients who we are happy working for and our growth plan surrounds our products.
I am sorry for sounding harsh here but most of your comments are baseless. Firstly, your assumption that I do not have a family car and mortgage is wrong. I pay an exceptionally high mortgage (in the UK market) and loan and yet according to you, I should not be able to do that? Frankly, I find it offensive that you imply we are immature simply because we do not conform to your “corporate” sense?
Whether you wish us luck or not, we are where we are and we will be where we want to be.
Thank you for your advice (just when I was starting to think you are only trolling) and I am sure it will be a last resort that we take any venture capital. I do agree that the company ethics will all be useless once VC’s come on board (or until some fresh thinking VC’s come along).
Sarat Pediredla commented, on March 11, 2008 at 2:37 p.m.:
John S,
I think the best approach is to produce a business case of why going to conferences will benefit the company foremost and then you. If your company is progressive enough, then neither of these should really matter as they will appreciate the need.
It never hurt to ask?
John S commented, on March 11, 2008 at 2:38 p.m.:
Great advise Sarat, it never hurts to ask. Thanks again for the great article!
Jonas commented, on March 11, 2008 at 2:38 p.m.:
Sarat, I’m not trolling you, but thanks for approving the comment regardless. I thought I had a 5% chance but you proved me wrong. :) I also peeked at your linkedIn profile prior to commenting, so I don’t think I’m very off-base. The mortgage was an example, not from personal knowledge.
Please take a read of Jason Calacanis’ blog post: http://www.calacanis.com/2008/03/07/h...
He’s harsh, yet realistic. In this business you have to offer a creative environment if you want to attract top-notch people, but there also has to be an equilibrium of pressure to bring out the really top-notch producers. And that requires growth. The big firms simply won’t hire small shops for the big jobs; it’s against their best interest. And without winning the big jobs, attracting the rockstars…
The op reminded me of the halcyon days of the late nineties. Those types of promises of “creative” work environments did nothing but attract the flotsam of the industry. Much to the resentment of all the people who actually did the work.
Sarat Pediredla commented, on March 11, 2008 at 2:39 p.m.:
Jonas,
Thanks for the Jason C post.. I agree with him on many points and disagree with him on others. In fact, we practice 13 or 14 of his points as applicable to us and those we don’t practice, I do not agree with! I tend to side more with 37signals on this http://www.37signals.com/svn/posts/90...
I can’t see how anything we are doing is unrealistic? Who says we do not have pressure? Who says the big firms do not hire small shops for big jobs? Our most recent client is a PLC (public limited company) and a FTSE 250 company. We have had no problem talking to other big firms.
Obviously, I take your overall moral on board that all fun and no work does not make a business and I certainly did not mean to portray that image. We have our own pressures of project delivery as any other business but what we do to take care of our team makes the difference at the end of the day.
Doug commented, on March 11, 2008 at 2:39 p.m.:
Sounds like a wicked company. I think work cultures of any kind ultimately depend on the people and environment. Not all companies can work like this and I wouldn’t say its _the_ model way to run one - there isn’t any one way to run a company successfully. Then again it does work for some and in this case very well. It all boils down to: “Horses for Courses”.
Unlike some of the embittered nay-sayers on here I’d like to wish you all the best. Hedgehogs also happen to be my favourite animal. ;)
Jon Dough commented, on March 11, 2008 at 2:40 p.m.:
Very smart!
I am convinced that if you focus on creating good products and establish a nice environment for people to work in, money will come as a “side effect”.
Not only that, but the company also attracts skilled people.
Best of luck to you all!
BSquared commented, on March 11, 2008 at 3:42 p.m.:
Everyone’s got blinders on, it’s the ones that stretch out and move their heads from side to side that get to see some of the scenery that gives them ideas that are out of the ordinary. There are many companies out there that have been successful starting out this way. Some are even able to keep much of the Hedgehog attributes. Sure they are rare because most folks like the blinders for safety, security, consistency, etc. But there’s many that are out there big and small, old and new. Staying private is a big key. Have you heard of SAS? Free onsite daycare (changed a few years back I think), onsite healthcare, none or minimal sub-contracting, subsidized cafe, free drinks and food in the break rooms, 35hr work week, onsite pool/health facilities, landscaping extrodinaire, and on and on. I’ve even worked for the feds and had 4 day work weeks and “work from home”. So it can even be just the “local managements” attitudes that can foster many of these “incentives”.
Roman commented, on March 12, 2008 at 1:27 a.m.:
Good post, man!
I wish my company's management could read this. But here in Japan everything is 180 degrees different. Staying at a workplace till 23.00 is quite common... I wish I could work for a company like yours ;-)
Lars Pohlmann commented, on March 12, 2008 at 10:01 a.m.:
Sounds like a great company to work for. I can easily say for myself: If I worked as a developer for a company with a culture like that, I'd be very committed to do my share to help the company succeed. I guess your developers feel the same way.
Narender commented, on March 12, 2008 at 10:30 a.m.:
Great going!
I like the way you have put the focus back on "brain" rather than age-old investment-banker way of doing business. I see this everyday when people try and fit the lessons of other industries on Software. It is high time, good companies understand that GM was in business of making cars and assembly lines don't get a lot done in our scenario. I guess with time, others will realize what few of you are practicing and how all these factors unleash potential and creativity among individuals.
More strength to you! :)
James McDugal commented, on March 12, 2008 at 4:42 p.m.:
Work 4 days a week on flexible "come-and-go-as-you-please" schedule, then get paid 100% of the take when doing "over-time". Its almost like you've set up a great system for someone who can ride the clock 4 days a week ... then turn in tons of work during overtime.
Sarat Pediredla commented, on March 12, 2008 at 6:29 p.m.:
James,
I can see where you are coming from but that doesn't apply to us. The reality is that we have not had to work even a single hour of overtime and any time spent by our team outside of work hours was entirely on their own wish.
The "overtime" that I was referring to were instance when clients request that we work overtime to produce something additional to what they would get in a 5 day work week. Also, I never said that we work 4 days a week for clients. Clients always require (and it is only right) that we work 5 day weeks, but even then it would not matter as we charge clients on a daily rate.
Stephen McConnell commented, on March 18, 2008 at 9:04 p.m.:
These workplace "experiments" should become more and more commonplace as we move toward a more "green" and "internationalized" work environment.
I currently am on a contract that allows me to "work from home" and have flexible hours. The "four day work week" is sort of up in the air, because of the way "Other" businesses work. But I could be done.
- "Working from home." I find I am much more productive working from home rather than spending an hour to commute into the office and an hour back. I tend to work longer, because my home environment is more comfortable and less chaotic. I don't have someone screaming about deadlines. My client knows I am available at home and can VPN all day and much of the evening if I want. The difficult part about that is the isolation... But I go into the client about once a month for a week and have gotten to know everyone. They are a telephone call away. We have set up a collaborative portal for Calendars, Assignments and Project Documents.
- "Flexible hours"... gosh darn... my hours are really flexible. I also enjoy being able to take off when the project allows. I get paid for the hour that I work, so when I want to take two weeks off to go to Italy... I do... (If I have scheduled it enough in advance). I often find myself working more than the "common" 40 hours a week, just because I enjoy what I'm doing.
- "Overtime..." like I said, I often find myself working more than 40 hours a week, because I enjoy what I do...
What this type of work environment requires is a project leader that isn't pulled in all directions and can PLAN... and a team that is self motivated and has integrity. I feel very lucky to be able to work in this type workplace and will be looking hard at my next client to see if they will support one like it.
Dave commented, on April 4, 2008 at 11:22 p.m.:
Nice blog post, what is your thoughts on company holiday allocation? I work for a large digital agency which offers 20 days holiday (including 3 manditory days for the Xmas break). The company is great and this is my only gripe. Extending this to 25 days would be ideal!
Sarat Pediredla commented, on April 5, 2008 at 10:53 a.m.:
@Dave,
Personally, of all the things that can be classed as benefits, holidays are the least important. I tend to find that if the workplace is exciting enough for people and it doesn't feel like "going to work", you will have trouble keeping people away.
At the same time, I agree 20 days is at the bottom end of the average holiday period, although, digital agencies are notorious for long hours and little holiday.
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