How VSHN’s organization evolves using Sociocracy 3.0

23. Dec 2020

As we grew beyond 25 VSHNeers (that’s what we call our employees), we realized more and more things that were preventing us from meeting our customers’ needs, developing innovative new products or maintaining our unique employee culture. The bigger we got, the more we thought we needed to improve the organization to stay fit for the future. This is about the first steps on our journey how Sociocracy 3.0 helps us evolve our organizational structure, empower people and improve customer service.

VSHN automates software build, deploy, provisioning, backup, observability, alerting and incident management for production applications on any cloud with 24/7 support. A top down, waterfall like hierarchical organization would probably not have helped or brought us there. We always worked in a very agile and democratic way. Furthermore we believe that people do their best if the organization effectively empowers them to do so. Most of the organizational changes were just done by “gut feeling” and talking to each other.

Identifying Pain Points

We felt that it is no longer scalable or beneficial to organize our tech teams around technology (like OpenShift or Puppet managed services). This separation worked well as long as customers used one technology stack or the other. Today’s customers benefit from all the technologies in which VSHN has expertise. As a consequence, customers have been served by two or more teams. To counteract this lack of customer ownership somewhat, we have introduced the concept of Service Managers, who take responsibility for a customer across multiple teams.

  • Ultimately, this still resulted in customers being served inconsistently. Customers had to be in contact with two or more teams. Both is by no means efficient or customer-friendly.
  • The teams sometimes felt controlled and overruled by the Service Managers. It also led to a sort of “fight” between Service Managers as to who would get a team’s help first.
  • Teams also could not decide for themselves how best to serve a customer or change their work methods.
  • Day-to-day business and customer projects usually took precedence over product development. This is, because there was no clear separation between these areas of activity.
  • It was often not clear who to ask regarding a particular product or customer.
  • In order to change such organizational conditions, we lacked the structures to make major decisions as a company with the involvement of everyone affected. This resulted in some decisions being made by individuals, which negatively impacted some of the teams. “Gut feeling” was no longer good enough.

As you can see, it was time to rethink aspects of our organization to keep VSHN fit for the future – and to better enable VSHNeers to do their jobs and improve customer experience as well.

Where to Start

One of the first organizational changes we thought about was organizing our teams by customer and product instead of by technology group. An idea that already started to emerge at the VSHNDay 2019.

  • We want several cross-functional Customer Solution Teams, each of which is assigned a group of customers. This means that a customer is served solely by one team. With the Service Manager as a full member of the team, the team could decide independently on the working methods, work planning and the most suitable solutions for their customers in order to provide the best possible service.
  • Additionally we want one or more Product Teams, each responsible for a specific group of products. With the product owner as a team member, the team could decide autonomously about the product backlog, working methods and technical solution approaches. This would allow the team to fully focus on its products to develop features, fix bugs and maintain the (code-) base, and support the Solution Teams which use their products.

So how do we do this? At the end of 2019, we decided that we will start using patterns from Sociocracy 3.0 as soon as we see something we can use to evolve. Sociocracy 3.0 – or S3 for short – (not the Simple Storage Service ) because it fits best what we have already been doing implicitly for the last few years – mainly the principle about equivalence and consent.

Autonomy of Teams

Just give our teams autonomy to do what they think is best, right? Fortunately, there’s more to this story. We want to give autonomy to a team, as long as the team is aligned with the wider company goals, knows its area of influence, its tasks, and its constraints. Or, to put it another way, each team needs to know the parameters within which it exists, works, and can grow as a team. But that’s not all, each person or team will encounter situations that they cannot address or decide on their own, we need structures to support our teams in discussing and deciding on issues that affect multiple teams or other domains of the business.

We (and S3) call this Accountability which includes Autonomy and Alignment.  To achieve company alignment and team accountability, we figured out that we need:

  • Clear descriptions on what a team is accountable for: This is where S3 Domains and Circles came into play.
  • Once we knew our areas of influence within the company (the domains) we could find out how they relate to or are contained in each other. This lead us to a clear idea of who delegates “accountability” a team for example.

Decision Making

Starting to transform our organizational structures required us to make a lot of decisions.

  • We needed a way to make those decisions quickly while still involving the people affected.
  • We needed a way to make decisions on “usable” over “perfect” solutions.

S3 with the concepts and patterns of ConsentNavigate via Tension and Proposal Forming is the way we choose to address this challenge. Now we could start making decisions that are good enough for now, safe enough to try until the next review.

Good enough might sound wrong, right? Not really, in the volatile, uncertain, complex and ambiguous world we live in, there is never a perfect plan or solution. Something we knew from Agile Software Development. We want iterative and small changes, learn fast what impact something has and react by reviewing and making the next decisions quickly again. VSHN actually did this from day one – just that now we need to do this for decisions with wider reach, affecting much more people and customers.

The key here is Consent. Consent does not mean that everyone agrees (often confused with consensus), it means to do something unless there is a reason not to do it, until we review it again. One reason might be if there is a risk to the organization or if we would overlook a worthwhile opportunity to directly improve the proposal.

Who decides

Involving everyone in every decision that we have to make can hinder agility and speed. Furthermore getting involved in too many different topics would also put a high mental strain on everyone. The key here is to limit people’s areas of influence through domains, that is, to make it clear which decisions are the responsibility of which group.

In response to that, we adapt the S3 concept of Delegate Circles. Here, all teams that would be affected send a representative to form a “virtual” circle. Delegates can then make decisions on behalf of their teams. This is about trust – people should be able to trust their delegate or other teams or groups that are responsible for other domains in the company. In return, they have the peace of mind that they don’t have to take care of everything that goes on in your company themselves – knowing that ultimately they will always have a means to raise an objection to a past decision, existing agreement or activity.

Sociocracy 3.0 (S3) in a Nutshell

Sociocracy 3.0 (S3) is a free social technology for growing agile and resilient organizations at any size, from small start-ups to large international organizations. Using S3 can help to achieve objectives and successfully navigate complexity. You can make changes one step at a time, without the need for sudden radical reorganization or planning a long-term change initiative. S3 is:

  • Flexible: adaptable patterns, independent and mutually reinforcing, to help you with all aspects of collaboration
  • Principles-based: a coherent way for growing organizational integrity and developing an agile mindset
  • Free: Sociocracy 3.0 is free, and licensed under a Creative Commons Free Culture license

You can learn more about S3 on:

Where we are right now and what the next steps are

We have managed to form three accountable Teams. One product team and two customer solution teams. The first review of these teams shows that our approach of building teams around customers OR products works. The autonomy allows our teams to find the best way to work and improve as a team.

We have clear domain descriptions for most areas of VSHN by now. This already helps other teams that are not directly affected by the ongoing team changes by clarifying who is responsible for what.

Our Alignment Framework already gives us clarity on what VSHN actually is, what our goals are and how we prioritize features and products for product development and drivers for organizational improvement.

We found a way to implement Consent Decision Making (from Tension, Driver over Decision Making and Review of Agreement) in a mostly asynchronous and written way, which is important in the current, nearly fully-remote world. We call this the VSHN Improvement Process.

As a side effect we’re getting rid of the terms Squad and Chapters which came from the Spotify “model” (There Is No Spotify Model).

Next steps

  • Bring the remaining old tech teams into the new model of Solution Teams.
  • Improve how our  Delegate Circles work.
  • Simplify the VSHN Improvement Process to be more a helping tool instead a formal process.
  • Sociocracy 3.0 Internal Learning Group and Educations – we need to spread the S3 knowledge.
  • S3 Facilitators that can lead by example. It’s important that people can guide VSHNeers in their daily work live and through decision making.

Summary – Our Experience

Change is hard. But overall so far, we believe that we are on the right way. We understand why we are making these changes, together as VSHN and while keeping a strong customer focus.

We learned that organizations can be broken down into two “spaces”. There is the system and there are people in the system. People need the system to see their purpose, to know what they are responsible for, what is expected of them, and where the boundaries and limitations are. Without people finding their place and being committed to make the system work, the system can’t work. We focused a lot on the new structures in the last months. Now again we need to focus on continuously invest in people to enable them to thrive in the system.

What we really like about S3 is the iterative approach. Incremental changes, experimenting and flexibility combined with consent decision making – all these patterns form a better organization in our view. On the other hand incremental changes can leave people between an old and the new world – we saw this being a problem, confusing people and breaking processes that worked earlier – it’s important to find the balance between small enough, incremental changes and not loosing track of where we want to go.

What do you think? What are your experiences? We would be happy to hear the stories you can tell about organizational changes.

Marco Fretz

Marco is one of VSHN's General Managers and Chief Operating Officer.

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