How to set salaries

Some ways of thinking about setting salaries:

Market Rate

You pay the lowest price that the market will bear. The bigger the market (the more appropriate candidates that you can reach), the lower the price is likely to be. This is commodity pricing: an average sort of price to attract average (or cheapest possible) candidates.

Market-plus

You pay the market rate plus a bit, fishing for better-than-average candidates or at least that your recruits will work better for you as a result of higher pay.

Market-minus

Sounds silly, but it’s quite common in the world of non-profits. You pay a little below market rate to filter out people who are in it for the money, as opposed to those who value the work itself, share your vision, are committed to the cause.

A living wage

You come at the pricing question the other way round – not “What’s this job worth?” or “What’s the lowest wage I can get away with paying for this work?” but “How do I think members of my team should be able to live?” This could end up being below market, in which case you end up with another values-filter, or above market, in which case you risk looking wasteful or attracting people who want to work for you for the wrong reasons.

I like the idea of starting from a living-wage – and if it looks too generous:
a) It’s a better mistake to make than being stingy
b) You’ve got the interesting problem of helping your recruits to be worth it.

Ben Horowitz – The Hard Thing About Hard Things

This is a great cut-the-crap book about management and building a company. It’s most relevant to the the tech world, but there are plenty of gems here that are relevant to anyone – he’s especially good on shaping your culture (hint: yoga at work is not your organisational culture).

Here’s the introduction:

Every time I read a management or self-help book, I find myself saying “That’s fine, but that wasn’t really the hard thing about the situation.”

The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is laying people off when you miss the big goal.

The hard thing isn’t hiring great people. The hard thing is when those “great people” develop a sense of entitlement and start demanding unreasonable things.

The hard thing isn’t setting up an organizational chart. The hard thing is getting people to communicate within the organization that you just designed.

The hard thing isn’t dreaming big. The hard thing is waking up in he middle of the night in a cold sweat when your dream turns into a nightmare.

The problem with these books is that they attempt to provide a recipe for challenges that have no recipes. There’s no recipe for really complicated, dynamic situations. There’s no recipe for building a high-tech company; there’s no recipe for leading a group of people out of trouble; there’s no recipe for making hit songs; there’s no recipe for running for president … and there’s no recipe for motivating people when your business has turned to crap.

That’s the hard thing about hard things: there is no formula for dealing with them.

Nonetheless, there are many bits of advice and experience that can help with the hard things.

I do not attempt to present a formula in this book. Instead, I present my story and the difficulties that I have faced.

I share my experiences in the hope of providing clues and inspiration for others who find themselves in the struggle to build something out of nothing.

Ben Horowitz – The Hard Thing About Hard Things

Highly recommend.

Seth Godin: freelancing and the hard work of being an entrepreneur

Freelancers get paid when they work. Using our own fingers, our own skills, we do the work. So when I’m making a podcast, it’s me. When I’m writing, it’s me. When I’m giving a speech, it’s me. We get paid when we work and that’s the only time we get paid.

Entrepreneurs, on the other hand, build something bigger than themselves, they build assets. If you’re an entrepreneur and you’re busy hiring the most easily available, best qualified and cheapest person to do every job… it means you’re hiring yourself. And if you’re hiring yourself to do all the jobs, there’s one job you’re not doing, and that’s the job of the CEO. Of the person who figures out how to build something bigger than yourself.

So the hard work of being an entrepreneur is hiring someone to do every single job that can be done by someone who’s not you. It’s a totally different way of being in the world.


Seth Godin – Akimbo: Math Class is Hard

See also: The Akimbo Workshops: Freelancer or Entrepreneur?
The Freelancer’s Workshop
The Bootstrapper’s Workshop

No breakthroughs

The water breaks through because upstream – far enough up that there isn’t any stream – there’s a drip, drip, drip.

Enough drips to puddle, to pool and start to trickle and then to run: a rivulet, a stream to cool your feet in.

Further on* lakes, rivers, waterfalls, floods, torrents to burst banks and blow your socks off.

All it takes is gravity, time, and enough drips.

*in no particular hydrological order

Matt Mullenweg on distributed work

Here’s a short video with Matt Mullenweg, founder and CEO of Automattic*. He talks a bit about lessons he’s learned in running a distributed company, and why he calls his workforce distributed rather than remote.

These are his tips for physical companies interested in transitioning to distributed work:

  1. Document everything – so that key information like the reasons for decisions are clear to those who weren’t in the room.
  2. Move communications online – “when everything’s shared and public, it allows new people to read through and catch up quickly.”
  3. Find the right tools – “If you look around the office, the things that change how you work probably aren’t objects anymore – they’re things you access through your computer. So test out and experiment with different tools for collaboration – see what works.”
  4. Create productive face-to-face time -Automattic holds an annual get together “half-work, half-play” to create the empathy and connection that helps the distributed team work together productively for the rest of the year.
  5. Give people the flexibility to create their own work environment – “Every person in Automattic has a co-working stipend… and a home-office stipend… so that they can have the most productive environment for them.

I feel wary of losing the connection and accountability that in-person work allows, but there’s a long list of potential upsides here – including a wider talent pool, greater diversity of perspectives, more time and flexibility for employees, huge savings on office space and other overheads that can be spent on other things – that make it worth thinking more deeply about this.

Today there are just a few companies that are distributed first, but if you fast-forward a decade or two I predict that 90% of the companies that are going to changing the course of the world are going to function this way. I think that companies will evolve to be distributed first, or they’re going to replace those that are.

Matt Mullenweg

See also: easier tomorrow

*the company which, among other things, makes WordPress.

Toolkit (v0.1)

My last post got me thinking again about the toolkit for making change and building a good future. What follows started out as the tail of that post but grew too long, so I’ve cut it off and put it here as a springboard to bounce off (or a wave to ride) later.

So here are some tools…

There are a set of practices and principles – many of them falling under the umbrella of normal ‘management’ – that are well-established and effective for running organisations. You will need to tailor them to your context, but understanding and applying them will make an enormous difference to your ability to build and run a sustainable and effective organisation. Drucker and Tom Peters are great places to start for foundational principles. Books like Financial Intelligence and 4DX are great for specifics.

There’s an overlapping set from the world of small business, startups and bootstrapping that will help you build the thing from nothing in the first place, and make it sustainable. The E-myth (which I’ve just discovered is available for a great price on amazon) is great for establishing operations (and overlaps with the previous category), as is Steve Blank‘s Startup Owners Manual (amazon) in combination with Alex Osterwalder‘s Business Model Generation (amazon). I’ll make a post of videos and audio by these people and put a link to it here.

There are resources for thinking about marketing in the deep sense – making something that people want or need and sharing it with them in such a way that they see its value and talk about it to others – is another overlapping area. I’d start with Seth Godin – probably This is Marketing (amazon) or Purple Cow (amazon) – and throw in Bernadette Jiwa’s The Fortune Cookie Principle (amazon) as another good starting point.

And there’s a whole load of writing about personal growth and effectiveness that really helps you to get these things done…

And about writing and presenting and using information (particularly the web) well…

And about thinking about culture, economics, networks and the future

And I’ve clearly gone down a rabbit hole, so I’ll stop here.

Peter Drucker on management as a discipline

If you can’t replicate something because you don’t understand it, then it really hasn’t been invented; it’s only been done.

When I published The Practice of Management fifty years ago [in 1954], that book made it possible for people to learn how to manage, something that up until then only a few geniuses seemed to be able to do, and nobody could replicate it.

When I came into management, a lot of it had come out of the field of engineering. And a lot had come out of accounting. And some of it came out of psychology. And some more came out of labour relations. Each of those fields was considered separate, and each of them, by itself, was ineffectual.

You can’t do carpentry, you know, if you have only a saw, or only a hammer, or if you have never heard of a pair of pliers. It’s when you put all of those tools into one kit that you invent. That’s what I did in large part inThe Practice of Management – I made a discipline of it.

Peter Drucker – from Frontiers of Management in The Daily Drucker

Understand the tools (make them if you have to). Build a tool kit. Make it reproducible.

I have mixed feelings about this quote from Drucker. On the one hand, bringing together a set of reliable tools for making effective non-profits or social enterprises is exactly what I’m trying to do with DriverlessCroc. On the other, a lot of the things that make these organisations effective in their contexts are very hard to reproduce – often apparently serendipitous combinations of people and resources in the right times and places, with combinations of vision, skills and technology that aren’t reproducible because they haven’t happened before – and might not again.

The point, I think, is to learn which tools are out there and how to use them so that you can be more effective at the creative, unreproducible work that only you can do in your context. Use the tools to make a new tool for change: your organisation.

I’ve posted a few thoughts about what some of these are here – more to come soon.

Just in time (2): “I’ll just…”

There’s another kind of just in time. This is the kind when you lie to yourself: “I’ll just squeeze this extra thing in, and I’ll get there just in time.”

Pro tip: things that start with “I’ll just…” cost more than you think.

“I’ll just…” jobs usually end up taking longer, or they leave you dissatisfied because you didn’t do them well, or mean that you have to rush the next thing (like getting out the door), that you forget something, that you arrive late or flustered and on the back foot, that your thoughts and emotions are busy with something else. That you miss possibilities.

Next time you find yourself with ten minutes before you have to go and think “I’ll just write one more email” or “I’ll just check my messages”, count first what it’s actually¬†going to cost in terms of time and emotional energy:

  • Is this a job that you can finish well and feel good about in two minutes (which probably means five to ten)?
  • Is it a job that you can leave – and feel happy about leaving – half done?
  • Is it worth the cost of energy and concentration and the likely rush later to squeeze it in?
  • Who is it going to cost? It will always cost you, and will usually also cost whoever you’re showing up for next.

Try this instead, for yourself and for them:

“I’ll just… leave ten minutes early, and enjoy the walk.”

Just in time (1)

There’s a good sort of just in time. We plan something, know what needs to happen and how, know what we need to do it well, when, where and with whom.

This kind of just in time feels great, with the right amount of tension for whatever it is we’re doing. Good training events feel tight like the skin of a drum – focused and snappy and free from clutter. There is time to share the material clearly, time to apply and discuss. There’s time and concentration to spare to tweak the way we present, double-check misunderstandings or discuss special cases. Time to focus and engage properly. The training starts and runs and finished – just in time.

Family events, trips to the market, airport departures, and collecting children from school all have their own ‘just in time’ feeling that comes from getting timings right, including time for traffic and coffee breaks along the way.

The thing about this kind of just in time is, you usually get it by allowing plenty of time – what feels like more than enough time – both to prepare and to deliver. You get it by allowing extra time for journeys and contingencies, and by allowing mental, emotional, social slack to compose yourself so that you arrive ready to participate, to perform or enjoy.

The last ten minutes…

…before you leave the house is not the time to start moving faster.

Strange things happen to time in the last ten, and the minutes go twice as fast.

Thrash early.

Start acting with last minute urgency with twenty minutes** to go and you’ll glide out of the door gracefully, and right on time.***

*See also: Thrash Now– and this

** Double this if you’ve got kids

***I’m leaving the house in 19 minutes****

****¬†It’s inadvisable to include having a shower in your list of ‘last ten’ activities