How not to deal with the world and work

Jason Fried, the CEO of Basecamp, has been making some changes at the org and decided that they “deserve an announcement”. While worth reading in their entirety, the changes are geared around taking the challenges of leading a company and addressing them by promoting monoculture (in the veil of individualism; Jason would call it “being responsible for [only] ourselves”) as a solution. He quotes Aldous Huxley in his introduction: “We live together, we act on, and react to, one another; but always and in all circumstances we are by ourselves.”

The changes are a stark departure from his previously expressed views on diversity (I say “expressed” because social signaling around diversity is different from the articulation of specific work policies) and are antithetical to most existing science on behavior change toward positive outcomes within an org. And so, as with an earlier post responding to points made by Domm Holland about how to grow a team, I drafted this post to offer a counterpoint to some of Fried’s changes (I won’t call them recommendations, since in his individualistic frame they are made for Basecamp only, although then why bother publishing them and emphasizing how much you “give back to the community” by speaking and publishing on management topics?) by surfacing potential alternatives.

Before breaking down the changes point-by-point, I have to apologize. Because how we create should be evidence-based, I normally compare the outcomes associated with the author’s recommendations to a benchmark (for example, looking at Fast’s diversity compared to Google). In the case of Basecamp, because they have so few employees and most don’t identify themselves with a picture on either LinkedIn or Basecamp’s website, it is impossible for me to currently tell you much about the monoculture that is the result of Fried’s policies. Should diversity data become later available, I will update this post with it alongside a relevant benchmark.

It is also worth noting that diversity data may not even be an appropriate benchmark for these recommendations; Fried’s measure for the changes seems to actually be profitability (despite the Basecamp Jobs page, which explicitly states “diversity has deeper value beyond monetary”), although the relationship between diversity and profitability is well-established. Certainly Basecamp’s product has a diverse subscriber base, so in making these policies public, change could be measured not through attrition of employees but of users; if Basecamp became unprofitable because of Fried’s policies because everyone unsubscribes, presumably he would see that as a failure.

Fried Point #1: No more societal and political discussions at Basecamp. Today’s social and political waters are especially choppy. Sensitivities are at 11, and every discussion remotely related to politics, advocacy, or society at large quickly spins away from pleasant. You shouldn’t have to wonder if staying out of it means you’re complicit, or wading into it means you’re a target. These are difficult enough waters to navigate in life, but significantly more so at work. It’s become too much. It’s a major distraction. It saps our energy, and redirects our dialog towards dark places. It’s not healthy, it hasn’t served us well. And we’re done with it at Basecamp.
Commentary: Certainly word choice matters: describing social justice conversations as “a major distraction” and the result of “sensitivity” while emphasizing the need for the workplace to be “pleasant” is a direct appeal to the desire for a monoculture. But it is difficult to interpret the policy itself. What does it mean to say that there will be no more societal or political discussions in a workplace? Does wearing a #BLM t-shirt on a Zoom call mean you’re fired? Even with nebulous consequences, the policy seems certain to reduce psychological safety, which Google previously found to be the greatest predictor of team success. It is difficult to imagine that scale items like “Members of this team are able to bring up problems and tough issues.” and “People on this team accept others who are different.” would be positively impacted by an explicit command not to talk about differences, especially when they’re potentially unpleasant to the rich white male in charge of the company.
Alternative Tip #1: Embrace differences that contribute to the psychological safety of the group by creating spaces and systems that allow for the discussion of all areas of impact, regardless of their relationship to the the social power structure, while mindfully balancing short-term velocity with long-term value. Encourage and guide respectful, validating discussion.

Fried Point #2: No more paternalistic benefits. For years we’ve offered a fitness benefit, a wellness allowance, a farmer’s market share, and continuing education allowances. They felt good at the time, but we’ve had a change of heart. It’s none of our business what you do outside of work, and it’s not Basecamp’s place to encourage certain behaviors — regardless of good intention. By providing funds for certain things, we’re getting too deep into nudging people’s personal, individual choices. So we’ve ended these benefits, and, as compensation, paid every employee the full cash value of the benefits for this year. In addition, we recently introduced a 10% profit sharing plan to provide direct compensation that people can spend on whatever they’d like, privately, without company involvement or judgement.
Commentary: When social psychologist Daniel Kahneman won the Nobel Prize in Economics in 2002, it was for his work challenging a notion that many previous economic models relied on: homo economicus — the infinitely rational person. At this point, decades of research has shown that money is objectively not fungible, despite Fried’s assertion that it should be, and non-monetary incentives at work are a key component of both job satisfaction and performance. Some categories of benefits like continuing education have different tax treatments when not lumped into pay and the non-monetary benefits negotiated by workplaces typically have outsized impact on workers at the lower end of the pay spectrum, making pure cash payments specifically inequitable. Finally, even if Fried were correct in saying that Basecamp should not care what you do outside of work, it presupposes an artificial barrier that is empirically untrue: what you do outside of work directly affects what you do at work and vice versa.
Alternative Tip #2: Invest in greater quality-of-life benefits that have recognized impact across diverse populations. Be clear that behavior is behavior, in and out of the workplace, and that where there is a demonstrated relationship between the two, they will be considered together.

Fried Point #3: No more committees. For nearly all of our 21 year existence, we were proudly committee-free. No big working groups making big decisions, or putting forward formalized, groupthink recommendations. No bureaucracy. But recently, a few sprung up. No longer. We’re turning things back over to the person (or people) who were distinctly hired to make those decisions. The responsibility for DEI work returns to Andrea, our head of People Ops. The responsibility for negotiating use restrictions and moral quandaries returns to me and David. A long-standing group of managers called “Small Council” will disband — when we need advice or counsel we’ll ask individuals with direct relevant experience rather than a pre-defined group at large. Back to basics, back to individual responsibility, back to work.
Commentary: The pairing of accountability and autonomy at work is a necessary precursor to equity, both in celebrating success and managing through failure. But committees are not the antithesis of individual accountability/autonomy. And a mandate that counsel comes only when sought by the accountable person from the sources of their choosing presupposes that that person knows who actually can provide value or is willing to hear them (this is particularly dangerous when coupled with Fried Point #1, since nobody should be talking about anything outside their hypothetical swim lane in the first place) and that there is neither serendipitous nor contrarian value. This is simply not true. As repeatedly proven both in the academic literature and by applied studies done by folks like Cloverpop, large groups of diverse people typically act as strong advisors to individual decision makers. As a small side note, it is also highly incongruent to talk about responsibility for DEI work (process) and then advocate for individual responsibility around outcomes.
Alternative Tip #3: Maintain high individual accountability for clearly expressed outcomes, coupled with high autonomy on the process to reach them. Allow for a diversity of voices to inform (not dictate) that individual accountability and ensure appropriate forums for those diverse voices to be heard by the accountable individual.

Fried Point #4: No more lingering or dwelling on past decisions. We’ve become a bit too precious with decision making over the last few years. Either by wallowing in indecisiveness, worrying ourselves into overthinking things, taking on a defensive posture and assuming the worst outcome is the likely outcome, putting too much energy into something that only needed a quick fix, inadvertently derailing projects when casual suggestions are taken as essential imperatives, or rehashing decisions in different forums or mediums. It’s time to get back to making calls, explaining why once, and moving on.
Commentary: As with Fried Point #1, I don’t actually know what this means as a policy and yet it seems meant to fix a litany of decision making issues (many of which are the product of poor decision structures and a lack of the autonomy/accountability pairing suggested in Alternative Tip #3). While making quick decisions with short explanations certainly increases velocity, an important characteristic of progress, it actively degrades overall progress by reducing the probability that you’re heading in the right direction, especially as confirmation bias makes it increasingly difficult to see the error of a decision direction as more decisions are made in that direction.
Alternative Tip #4: Have clear decision making paradigms (including criteria like reversibility), with established review points (both during and after a decision) to balance velocity against accuracy.

Fried Point #5: No more 360 reviews. Employee performance reviews used to be straightforward. A meeting with your manager or team lead, direct feedback, and recommendations for improvement. Then a few years ago we made it hard. Worse, really. We introduced 360s, which required peers to provide feedback on peers. The problem is, peer feedback is often positive and reassuring, which is fun to read but not very useful. Assigning peer surveys started to feel like assigning busy work. Manager/employee feedback should be flowing pretty freely back and forth throughout the year. No need to add performative paperwork on top of that natural interaction. So we’re done with 360s, too.
Commentary: As with many of the Fried Points, he equates the result of a badly implemented system with the system itself. While there are legitimate, empirically-backed issues with some review processes that Fried identifies (including the tendency to be periodic rather than as-it-happens, with an emphasis on summary rather than specific feedback), that is not an inherent flaw of specifically peer review, with Fried singles out to target. Manager-only reviews have a long history of centralizing bias, especially since cis white men continue to disproportionately be the ones doing the reviewing. As with the Points 3 and 4, getting diverse feedback from a larger group works not only enlarges the actual performance space considered (literally the 360) but mitigates the inherent bias that comes with a single dyad.
Alternative Tip #5: Ensure that feedback is timely and specific, while ensuring that it also comes from a diversity of sources, not just in level but in working relationship and context.

Fried Point #6: No forgetting what we do here. We make project management, team communication, and email software. We are not a social impact company. Our impact is contained to what we do and how we do it. We write business books, blog a ton, speak regularly, we open source software, we give back an inordinate amount to our industry given our size. And we’re damn proud of it. Our work, plus that kind of giving, should occupy our full attention. We don’t have to solve deep social problems, chime in publicly whenever the world requests our opinion on the major issues of the day, or get behind one movement or another with time or treasure. These are all important topics, but they’re not our topics at work — they’re not what we collectively do here. Employees are free to take up whatever cause they want, support whatever movements they’d like, and speak out on whatever horrible injustices are being perpetrated on this group or that (and, unfortunately, there are far too many to choose from). But that’s their business, not ours. We’re in the business of making software, and a few tangential things that touch that edge. We’re responsible for ourselves. That’s more than enough for us.
Commentary: Every company is, inherently, a social impact company: the products and services we create continually change behavior in the world around us. We might not all be double-bottom-line, or certified B-Corps, but what and how we create matters. Fried knows this; he notes that Basecamp “gives back” (although without acknowledging that many of these activities also contribute to the Basecamp bottom line) presumably because he believes that those activities create change. The false distinction that he is drawing is that there are somehow borders to that change, artificial lines we draw on a map. That simply isn’t true. The edges of our impact are defined by the impact itself; the decisions we make ripple not only where we want them to but far, far beyond. I can understand the desire to operate in a convenient world where Fried gets to decide what he doesn’t care about; rich white men have been doing that for ages. But the practical reality is that our choices have consequences and we must seek to confront them head on.
Alternative Tip #6: Understand that the impact of your company is defined by what it demonstrably impacts: not its aspiration to create impact, nor its desire to avoid it. Create processes to understand that zone of impact, to measure it, and to make conscious choices about how you change it.

Side Note: In talking about this with Tim Morey, he reflected that a lot of these edicts sound like a return to shareholder value added, the antiquated notion that companies should be judged on profit alone, usually in the quarter-over-quarter sense. And I’m struck on how much of this technocratic libertarianism, like SVA, is just an excuse for short-term profiteering that enrich the richest among us. I’m reminded of the Warren Buffet quote about investment: “Our favorite holding period is forever.” If you were trying to create permanent value, to build toward a utilitarian ideal that maximized outcomes across the consideration set, why would you seriously consider any of the policies above? And why would you support those who do?