How We Transformed Marketing at Electrolux

Recognizing the need for integration, Electrolux’s digital, trade, brand and product marketers worked together to create a cohesive experience from pre-purchase, to the purchase itself, to post-purchase service and beyond.

To this end we eliminated silos between functions including marketing, sales, IT, consumer insight, and innovation and established “consumer experience teams” in each business and region. These teams include consumer insight, brand, product, retail, digital, social, and consumer care specialists who now closely work together to create integrated consumer experiences and launch plans. We also moved responsibility for the post-purchase experience into marketing — all of the services, onboarding, registration, and add-on purchases and support that people receive after they buy.

This is smart. Copy this.

Read more: How We Transformed Marketing at Electrolux

Bank Branches are Dying

…[there are] seismic changes in the British banking landscape, with a shift at a startling rate to conducting even complex transactions on smart phones, tablet computers and PCs rather than in physical branches. The study is expected to detail a remarkable set of statistics, including the fact that HSBC recently completed an online mortgage application in 24 minutes, and that spending on contactless cards has more than doubled. But it is the impact of the internet revolution on branches which will cause the most concern among groups such as the elderly and the less computer-literate.

It’s pretty common among large, retail banks to believe that the branches are an important asset, and that users want the security of a human helper during complicated transactions with banks (and with other institutions). I believe banking *can* be no more complicated than setting up and using a Dropbox account – this British Bankers Association report shows that users are moving in that direction.

Read more: Bank Branches are Dying


That raises the uncomfortable question of cross-subsidy. Borrowing from banks, especially if unplanned, can be very expensive – and the fees levied on overdrafts help raise the money needed to subsidise “free” banking for the majority. Those who enjoy free banking tend to be the better off, while those who pay large overdraft charges tend to be those who are struggling financially….Cross-subsidy is rife in financial services as it is in other walks of life. Banks can offer “introductory bonuses” on savings accounts because they pay derisory interest on many other accounts. Some borrowers can get low-cost fixed-rate mortgages because others are effectively trapped on more expensive standard variable rates.

Cross-subsidy will be eliminated by the unbundling of banks. And we’ll all be richer for it.

Also, after the click, there’s a good read on Wonga, a less-unscrupulous payday loan service.

Read more: Cross-Subsidy

14 Financial-Services Disruptors

Reading through the CNBC Disruptor 50 and it strikes me that there’s a ton of interest in financial services.

By my count, there are 14 companies that are peeling off portions of Banks’ core jobs (28% of the list). Worth noting that none of these are payments companies. If Facebook, Twitter, OTT apps, etc. are the unbundling of email, then this is the unbundling of banking…except there’s little regulatory capture going on in the email space.

Nine direct competitors for small portions of the jobs banks do for customers and businesses:

  1. Motif;
  2. Stripe;
  3. TransferWise;
  4. Personal Capital;
  5. Wealthfront;
  6. Lending Club;
  7. Coinbase;
  9. Betterment.

Four adjacent competitors and/or businesses that banks could do well:

  1. Palantir;
  2. Docusign;
  3. AngelList;
  4. Kickstarter.

Read more: CNBC Disruptor 50

Regulatory Capture

Regulatory capture is a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure; it creates an opening for firms to behave in ways injurious to the public (e.g., producing negative externalities). The agencies are called ‘captured agencies’.

For future reference.

Read more: Regulatory Capture

Disrupting From Above

Alibaba, a very ambitious company, was perhaps unsatisfied with users transferring small amounts of money periodically into their Alipay accounts. So they had the bold idea to launch a savings account alternative called Yu’e Bao. Yu’e Bao isn’t just a savings alternative, it’s a highly disruptive one that offers almost 200 basis points more interest than the rate most banks are offering. In a little over 12 months, Yu’e Bao has gathered 100mm investors and over US$87B in assets. Alibaba may be willing to forgo profits on savings accounts in order to grow assets, and that is wonderful for consumers. Isn’t that the exact type of competition we would love to see in the U.S?

The point of this article: banking will be disrupted by those who gather assets, not those who “fix” the transactional experience.

Read more: Disrupting From Above: Wealthfront

Apple & Operational Effectiveness

[Apple are] doing more not by changing their thousand-no’s-for-every-yes ratio, but by upping their capacity.

The turning point is clear. The headline of Apple’s October 2012 press release said it all: “Apple Announces Changes to Increase Collaboration Across Hardware, Software and Services”. It turns out that was not an empty bromide, meant to patch over run-of-the-mill corporate political conflict. Tim Cook wanted Apple to function internally in a way that was anathema to Scott Forstall’s leadership style. The old way involved fiefdoms, and Forstall’s fiefdom was iOS. The operational efficiency Cook wanted — and now seems to have achieved — wasn’t possible without large scale company-wide collaboration, and collaboration wasn’t possible with a fiefdom style of organization.

So much yes.

Read more: Apple & Operational Effectiveness

Origins of Venmo

One of the weekends we were getting together to work on this idea, Iqram was visiting me in NYC and left his wallet in Philly. I covered him for the whole weekend, and he ended up writing me a check to pay me back. It was annoying for him to have to find a checkbook to do this, and annoying for me to have to go to the bank if I wanted to cash it (I never did). We thought, “Why are we still doing this? We do everything else with our phones. We should definitely be using PayPal to pay each other back. But we don’t, and none of our friends do.”

Lots of good in this, but of particular note for any clients reading this: there’s a really clear description of user need/user story in the quote above, and a clear demonstration of “Experience Value”. Alex and I have been playing with this idea for a little bit – that there are billions of dollars of value that hang in a very nuanced, very hard-to-describe balance: WhatsApp is not that different than Facebook Messenger, and Venmo is not that different from PayPal, yet in both cases the former is worth something more to users than the latter. That’s Experience Value.

Read more: Origins of Venmo

Autonomy Talk

Here’s a bit of the deck I’m presenting tomorrow at the Future of Work meetup:


As far as we can tell – been going back and forth with Aaron on this for the last month – the core reason for organizations today is to grow, serve and leverage networks. This statement also works as a core differentiator between legacy institutions, which primarily exist to serve shareholders, and responsive ones, which serve networks. There are lots of little things that fall out of and support this statement, which I’ll get into later, but for right now this statement feels more correct than anything we’ve got.


And while I’m no expert in the philosophy of autonomy, it’s very clear that it’s absolutely essential to the development of networks. Without autonomy, networks resist formation, and instead lay dormant in traditional frameworks, like “employees” or “customers”. And it appears that there are two conceptions of autonomy that are worth examining in the workplace: the ability to self-direct work, and the ability to work toward a common, socially accepted good. Both provide a desirable foundation for something that Stowe Boyd mentioned last month – unintended order – and drive engagement. If you’re in charge of your destiny, and you agree on the future you’re building toward, more frequently than not you’ll be engaged in the work of the enterprise.

With that, a few things that we’re continually experimenting with at Undercurrent:


Firstly: allowing all teams to reorganize themselves by pushing authority to the edges of the organization. This allows active makers (versus passive managers) to make changes to the way they do work without worrying about approval.

We’ve seen several organizational impacts, two of which I’ll mention here. First: the restructuring of an outdated organizational trope that we maintained at Undercurrent (executive assistants). Because we allow teams to restructure autonomously, we’ve seen that admin roles have become distributed and team members that work in those roles have taken a more powerful (and appropriate) seat at the decision table. Second: the development of process through teams, rather than through checklists. As a small company run and inhabited by creative types, we traditionally resisted process. By creating clear ownership of work, we’ve reinforced a more natural form of process: moving a product or service from one group to the next.


About a year ago, we drastically raised salaries to bring Undercurrent employees up to market rates for our then-new competitive set: big consulting. And while this ensured a base level of talent density, it didn’t have many other compounding effects. So we recently rebuilt our salary strategy to allow tenured specialists to stay in-role longer at Undercurrent, helping us eliminate the Peter Principle – which I think we’ll all agree is bad for everyone involved. Instead of jumping out of the role you’re good at (Senior Strategist, in this case), just say there, and keep crushing it.


Even with better salaries, a longer in-role runway, and edgy reorganization, we still had too long a feedback loop when it came to salaries and promotions. And when the feedback loop was closed, it was closed with fuzziness. So we’re moving over to ongoing opportunities for base-salary raises, in line with trimesterly success against individual OKRs. The OKRs are set with guidance and help from colleagues, and are designed to be hard-to-achieve and aligned with our purpose. This ends an ongoing cycle of UC gaining surplus value from its employees: UCers gain skills at a rapid pace, and annual salary adjustments are too slow to match their rate of improvement.


Lastly on the compensation/structure front: we have a much higher degree of salary equality in our (admittedly small) organization than other organizations pursuing similar networks. Most organizations that we know of have almost all the wealth concentrated in the hands of a few individuals, and leverage the work of many low-paid individuals. By maintaining a higher degree of equality, we’re able to offer our network a higher concentration of talent and convey more explicit trust to more people: this means we need fewer processes relative to our peers, and fewer people have the implicit “right” to exert power over others.

That’s just the first little bit. More to come later.

4 Holacracy Misses

For the past eight months, we’ve been implementing Holacracy. I think it’s great, and we’re going to continue using it at UC. Last week, I posted four great things about Holacracy. Today, I offer four things I could do without.

1. Confusing Word Choices

Having a shared pattern language for describing the organization is crucially important. But the language provided by Holacracy is hard to use. A sample:

  • “Tension” is a word that, in business contexts, leads people to think about issues instead of opportunities. Why not “Data”, “Opportunity”, or “Issue”?
  • “Circle” has some nice meaning and history, but it’s a head-scratcher for most: why not just say, “Team”?
  • Calling a “Governance” meeting guides people to think in legal, anti-human terms; we end up proposing changes to our organization like shitty lawyers with no experience writing policy, tossing “shall” and “whereas” around like we own the joint.
  • And for what it’s worth, “Lead Link” and “Rep Link” are almost always accompanied by air quotes. Why not “Leader” and “Representative”?

Word choice is important. To play the game, you have to understand the terminology. And many of the words included in the system reinforce bad behavior.

What to do: Re-think every defined term in the system with a user-focused lens.

2. The Constitution

It’s too long, mostly because it’s written in a dense, unapproachable style that comes from its intended use: to be adopted as an addition to the operating agreement of a company. The length and density of the content effectively makes Holacracy a product for org-design masters, and limits its applicability at the edge of an organization. If you can’t commit the rules of the game to memory, it’s going to be hard for the game to spread.

For example, here’s a core concept of the system, as expressed in the constitution:

4.2.2 Requests for Processing. Each Circle Member of a Circle shall engage in any processing required under Section 1.2 promptly upon a request made by a fellow Circle Member to so process a specified Accountability or Project. To the extent the Circle Member receiving such a request has no Next-Actions tracked with respect to the specific Accountability or Project so requested for processing, such Circle Member shall continue processing until such a Next-Action is identified and captured, unless such Circle Member can instead reference (a) a specific Next-Action or Project explicitly captured and tracked by another Role that must be completed before any further Next-Actions are reasonably appropriate to enact the Accountability or advance the Project so requested for processing, or (b) a specific event or trigger condition beyond the reasonable influence of such Circle Member that must happen before any further Next-Actions will be reasonably able to enact the Accountability or advance the Project so requested for processing. In any case, a Circle Member so processing upon request shall inform such requester of the results of such processing.

Here’s a minimally lossy version of that: “When a teammate asks you to process an Accountability that you hold, we expect you to consider writing down an action associated with that Accountability.”

I’ll grant you that many games have long, extensive rulesets – the NBA’s rules are hella long, for example – and I’ll also allow that rules are crucial to the functioning of the system. I’d just say that the constitution as written impedes the adoption of Holacracy.

What to do: Radically simplify the constitution. Write it for people, not for wonks.

3. Dogma

Just to take the first bit from Dogma from Wikipedia: “Dogma is a principle or set of principles laid down by an authority as incontrovertibly true. It serves as part of the primary basis of an ideology, nationalism or belief system, and it cannot be changed or discarded without affecting the very system’s paradigm, or the ideology itself.”

I think of dogma inside the Holacracy system in a couple of ways.

First: it’s an all-or-nothing proposition. As we were getting trained up on the system, it’s clear that there is a “right way” and a wrong way. A pretty good portion of the final day of the training was devoted to a discussion on the incontrovertibility of the system; to practice a bit of Holacracy was to fail at it.

Second: there’s a single, central source of knowledge. Local derivations of the practice (“house rules”) can be built into local constitutions, but there’s no clear process for incorporating those adaptations into the broader system. True, there’s a community of practice, but it’s a paid forum – hardly the type of open, branch-edit-commit communication norms that one would expect at the leading edge of a movement. And yes, all companies using the system could open up their Glassfrog accounts (make them public), but the secret sauce isn’t the record of governance, it’s what worked and didn’t. It’s the flexing of the constitution. It’s the house rules. Because the structure can change so quickly, the stuff that doesn’t work is as important as the stuff that does.

What to do: Accept that there is a massive amount of variation possible in the system, and that this has historically been a good thing. Encourage users to try new ways of operating, and see what emerges.

Which brings me to the next point.

4. Closed Source

This is the big one for me.

For better or worse, I expect the systems around me to be tended by an open-source community. The blog you’re reading this on started in 2006, originally hosted on version 2.0 of WordPress. WordPress has seen 17 major releases since then. The open-source community behind WordPress has made it an undeniably powerful tool that will be around long after Squarespace, Tumblr and Typepad are dead (much love).

Holacracy, by contrast, is closed-source: its constitution is released under the Attribution, Non-Commercial, No Derivatives Creative Commons license, which effectively prevents me from publishing my own updates to it – even if I don’t sell those updates. This is a major, always-in-the-back-of-my-head disincentive against using the system, but broadly means that the system isn’t able to be moved forward by the community. Instead, we rely on HolacracyOne’s founder, Brian Robertson to “[Draft] successive versions of the Holacracy Constitution to concretize and formalize effective patterns and core best-practices that have emerged in the practice and application of Holacracy.”

I can’t handle the idea that the core system that undergirds Undercurrent’s business will be updated when its editor has the time. To wit: at the training, the projection that I got for the next release was in the next two years. That’s too slow, in a world where Oculus Rift can go from Kickstarter campaign to functional hardware to $2bn exit in the same amount of time.

What to do: Put the constitution on Github. Let it free. Kill the licensing program and get really good at making software to support the practice.