Leadermorphosis Episode 61: Topi Jokinen on levelling up a construction firm with self-organisation

Leadermorphosis Episode 61: Topi Jokinen on levelling up a construction firm with self-organisation

Lisa: Topi, I thought maybe we could start by, I’m curious to know about Vertia and how you started on this journey towards becoming a self-managing organization, and perhaps that’s also interconnected with your own journey, but kind of set the scene for us. How did this start?

Topi: Yeah, if I go to the very beginning, the whole Vertia was formed actually after the lectures of a Finnish philosopher called Esa Saarinen. We were students at the Aalto University, and those lectures were very inspiring, and then we continued to discuss all sorts of things. And then we had the idea to form a company, but the lectures and Saarinen and philosophy was kind of how to live a better life and how to deal with human things and stuff like that. I cannot explain it so clearly, but these lectures had affected how we started to think about the company.

So maybe we started to think that we would like to make a company that would be a really great place to work, and where it would be nice for us to work, but also for others. So that was kind of the beginning, even before we knew anything about self-management. And we also thought from the very beginning that we would like to do things differently. We wanted to do things our own way and not like everyone else. So we just started developing the company, and eventually it led to the direction of self-management.

We formed the company in 2011 and then I was the CEO for the first four to five years. And of course, we led the company together with my co-founders, and then I went away for two years. I first started a new company, new startup. So I left Vertia for a while, and that didn’t work out quite well. So then I had a little pause, I actually did some music and traveled. And then we ended up forming this Teal Finland community.

It was almost a year before that I read Frederick Laloux’s book, and I just thought that after reading that book, this is exactly how we were kind of thinking about these things in Vertia, but this was just much further. Frederick had taken things much further, and that was really inspiring. And I could immediately kind of connect with that. So then we ended up forming, with a small group of people who were also enthusiastic about that book, we formed the Teal Finland community and I was also doing some coaching for teams.

And somehow I just had this feeling inside that I should be doing this by myself and not coach others. So then, at the beginning of 2018, I was discussing with the current CEO of Vertia. And then after that discussion, I decided, or we decided together, that maybe I should come back. And it was, in retrospect, the best decision I could have made. And there actually started the transformation - we thought that now we can take Vertia even further than what we had before. And then we started transforming the company to a truly self-management way of operating. We had had something before, but after that, we just thought that this is the way where we wanted to go.

Lisa: Yeah, thanks for sharing that. I want to come back to this idea of you as a coaching kind of CEO, because I know you’ve done a lot of personal development work, so I want to come back to that. But before we go there, I wonder if you could paint a bit of a picture for listeners in terms of what Vertia looks like currently, as a self-organized company, what are some of the key pieces, practices, principles that you’ve been able to develop?

Topi: Yeah, and maybe before that, I can even explain what we do, so it might help.

Lisa: Sure, yeah.

Topi: Actually, Vertia, we are in construction industry, so we want to develop the quality of construction and buildings, and we do Quality Assurance like air tightness measurements and thermal camera measurements and humidity measurements and stuff like that. And currently we employ 27 people, and all together with our contractors, we are 50 people altogether.

So we have some, or quite many self-managing structures put in place already. First of all, we are organized at the moment in cells. So people can be a part of actually many cells. And these are kind of, we call them cells because they are more breathing than teams. Teams would kind of be more locked, so people can be a part of many cells and actually, they usually have many roles. And those roles also develop quite naturally. So there’s no kind of strict process about how you can have a new role, or anything like that. So we don’t have titles, we just have roles, and it’s a natural thing for us.

Lisa: So people might energize multiple roles, yes, and those might change over time?

Topi: They might change, yeah. And everyone in Vertia can make any decision. So we have this process, we use this advice process that Frederick Laloux introduced in his book, but we have our own version of that. But the basic principle is that you can make any decision if you just first consult your colleagues this affects or has an effect on, and then you also have to ask for some advice from people who know something about that.

For big decisions especially, we have this model that you have to think also about our mission and values and also economic things, in the short and long term also, but that’s kind of a framework in the background so people don’t necessarily tick all the boxes and stuff like that, but there are some sort of guidelines. So that’s the basic principle. And, of course, when people are in certain roles, they tend to make decisions that affect that role.

Lisa: So you have a cell-based organizational structure where people have multiple roles that are kind of more fluid, it sounds like. And a key practice is the advice process. You have your own version of that, including some sort of more important guidelines the bigger decision it is to kind of take into account the company mission and things like that.

Topi: Yes. And also in our company, we have taken it even that far that people can decide on the salaries, not so that everyone decides on their own salaries, but we have this kind of salary committee. So we choose seven people every year to discuss about the salaries, and then they can make decisions on the budget and the salary budget and also who’s going to get what.

But we have the system where people first say what they think they should have, and everyone can see everyone’s suggestions. People suggest their own salaries. And then they also write some contributions they make. And then the salary committee, they go through this, and they also set the budget, and then they have to make some adjustments there, and then they kind of make suggestions back to the organization. And then people can still discuss about their own salaries if they want to, and then after that, the committee makes their last decision about salaries.

Lisa: That’s really interesting, because I know that a lot of people ask me about self-managed and transparent salaries, and find it challenging, especially if there’s a legacy in the company of salaries not being transparent and perhaps being decided with different criteria, or how well you’re able to negotiate. So how was it in Vertia? Was that a big shift? How did that happen? Did people find it challenging?

Topi: Yeah, for where we started, in 2018 the practice was that the founders, we decided on the salaries, and we were the only ones who saw everyone’s salaries. So that was the starting point. And then we started discussing about self-management. And then at some point, we discussed about having open salaries.

We were first developing a completely different kind of model for deciding the salaries. So we first had these stages, and there were descriptions of every stage and stuff like that. We used it for one year, but then we let that go because we thought it was too restricting.

But then at some point, I recall I made a phone call to every person that works for us, and asked if it’s okay that we share your salary with everyone. So everyone accepted that, there wasn’t anyone who was like, “I don’t want to share my salary.” And then we decided to open everyone’s salaries, including the founders.

After that, after the first rounds of salaries, there were conflicts born out of those. So some people thought that they were earning way too little, and then we had a lot of discussions. And it was really kind of almost tiring for me to have these salary discussions. And even after we had made a decision, some people thought that they needed more salary.

That led to conflicts, that was part of the kind of bigger conflict that we had, that ended up with 4 or 5 people leaving the company in the end. So there was this kind of cultural clash between those individuals and the others, and also the salary discussions were with those people mostly that they were not satisfied with their salaries.

Lisa: That’s interesting. And I’m curious about how you deal with conflicts in general in Vertia, and how you know in the example of the salaries, like, how were you able to navigate that, because it can be quite painful in my experience for people, especially. I think money makes it very real. It can be very personal for people.

Topi: Yes, it is. I would say that even in our last salary round, there were very emotional discussions and we were almost fighting. So it’s really difficult to talk about salaries so openly. But at first, because we didn’t have experience, and we didn’t have any kind of processes in place how to deal with conflict or anything like that. At first, we kind of had, but it was not implemented. So we had, in theory, something, but that didn’t work at first.

For my part, I tried to just do the right thing, or try to solve those problems. And then I learned that the ways that I was dealing with some things were not the best ways to deal with them. For example, I had some conversations where we were discussing about some person who is not in the conversation at the moment. So I started to realize this pattern, that this doesn’t work. It always ends up in difficult situations.

If I try to solve this, if I’m with people discussing about some problem where the key person who is part of the problem is not in the conversation, it just didn’t work. So actually, just a few months ago, we enforced this kind of rule that all the people should always be part of the conversation that they are affected by.

There are some exceptions when we, for example, want to have some advice, but then you always have to be conscious that it doesn’t turn into bad mouthing or something like that. So it’s just you can ask advice: “How should I deal with this situation?” But not try to solve the situation with some people without the person that is causing some problems. So always try to first talk to that person. Or if you cannot, then you can arrange a meeting where you can invite some colleagues and the person, and it’s kind of mandatory for everyone to attend, who are invited. So it’s not like you can decide not to come to that meeting if there is something serious that should be discussed.

Lisa: It also sounds like there was a shift there, that you had an insight that it didn’t work so well when you were being responsible for trying to solve it. It sounds like you were doing an awful lot of work, and now it sounds like you’re trying to support other people to have the conversation themselves, where it needs to be solved between those people, rather than you being responsible for solving it.

Topi: Yeah, that’s exactly how it is. I learned that it doesn’t work if I try to solve the problems or try to be part of that. In general, I try to find ways where it’s not necessary for me to be a part of solving the problem. And if I am sometimes involved, I always try to think, how could we do this in a way that next time I don’t need to be part of this anymore? So people could solve it by themselves. And that’s how some things have developed in our company. So first I’ve been a part of solving something, but then I will have thought together: How could we do this better?

Lisa: Yeah, maybe then on that note, we could dive into your kind of personal development journey, because I was really quite amazed by just how much personal transformation work you’ve done. I think it’s maybe the most I’ve seen of a CEO and I feel like that’s been quite influential in this kind of mission of yours. And so maybe you could share some things with listeners about your journey and some of the things you’ve been learning, some of the challenges you’ve been facing as a kind of founder, CEO, trying to work in a self-organized way.

Topi: Yeah, well, don’t know where to start, because it’s quite a long story. But yeah, that’s true that I have done quite a lot of things, and maybe too much, I don’t know. But actually, I think my personal development started - of course not started, there were many things happening before that - but I was having depression in 2008 and it was something that I felt was the bottom. I couldn’t wake up in the morning, stuff like that.

And that’s the point where it started to transform. That was the point I realized that I need some help. And I was at one night, I was walking outside because I couldn’t sleep, and I decided that tomorrow I’m going to get some help. And I went, and then I ended up in therapy, and it helped. And it was like less than half a year, and I was kind of okay, and then I went to Finnish military service, and there I got some hold of my life.

But in the meanwhile, we formed Vertia, but then in 2012 my mother died of cancer, and that was truly life changing for me. And I had already submitted to this philosophy seminar of this philosopher, Saarinen, which he held in Cyprus. And it was two or three weeks after my mother died, and there I could kind of discuss about this experience with people, and I felt I got a lot of compassion, and also the seminar itself was really inspiring.

So it was kind of somehow I felt that after the seminar, my operating system kind of updated, or something like that. I was completely, I think, almost a new person reborn after that seminar, and after my mother had passed. And then I started kind of obsessively to read and meditate and wanted to - I had this kind of experience after that, that I had this almost like enlightenment state. I was, it sounds maybe weird, but I was completely calm for like two weeks. I didn’t really sleep much, but I didn’t feel any problem with that. I was full of energy but calm and no stress anywhere in my body or stuff like that. And it was a really amazing kind of state, but it lasted for like two weeks or something like that, and then passed.

And then I started obsessing about that state, and I wanted to go back there, and that’s why I read and meditated and went to different courses and seminars and everything. And it lasted for like three years, that kind of obsession, before I could kind of let go and I realized that this is not leading anywhere, that I want to have this state back, that there are some more important things in life also than trying to chase this one state.

And yeah, after that also, of course, I have done many things like went to some retreats now and then, and also meditated daily, even after that, but without that kind of obsession. And read an awful lot. Nowadays, I still - I started actually meditating again, because my first child was born one and a half years ago, and then my life kind of transformed in a different way. After that I didn’t have the energy or time or something, not time, but it just dropped. I just dropped the meditation and many other things also, all those good routines that I had. And now I’ve just been meditating again for one month now, and it’s really good.

And also, for two years or three years, I’ve done some coaching, and I have my own coach, and she’s been really helpful for me with this transformation journey that we have taken. Because sometimes it’s really hard and it’s nice to have someone to talk about those things.

Lisa: Yeah, thank you for sharing that. I think it’s really - I’m really touched by how open you are at sort of sharing both the very personal things that have shaped your transformation, as well as this perhaps kind of intellectual appetite for learning and reading and training and so on. So I’m curious, how has that served you as the CEO and co-founder of Vertia and trying to hold the space for this transformation and this group of people? How do you use those experiences and insights to help you in supporting your colleagues, for example?

Topi: Yeah, I think it’s helpful. That said, I feel like even after everything I’ve done and like been meditating for so long, still I have these reactions coming within. And still, I react and sometimes say things that I regret afterwards, when I was reacting. And still, I even have had a couple of burnouts in the last year or so. So it’s crucially important, and at the same time, it doesn’t save me from everything and being human.

But I think I have developed some understanding of systems. I mean human systems, not like mechanical systems only, but how we work as a system. And I think quite a lot about systems from a systemic perspective, and it helps, I think, in general. That’s what I many times try to improve. I see our organization as a system and I try to improve the system.

I’m not doing anything really operational except for some IT things. Previously I did quite a lot of sales, but nowadays I don’t do it at all. Actually, when a customer sometimes calls me, I might be a bit lost. I have to say, “Sorry, I have to ask my colleague to call you, because I don’t know about these things so much.” So maybe sometimes it would be better to actually do something concrete, so I wouldn’t lose touch on some basic things.

But still, I think it’s good to have this position - I don’t mean like positional in that sense that of course I have this position like CEO position, but I mean that position where you can not be so attached to those operational things, and you can really look at things from a broader picture. But of course, you have to also be somehow in sync with the organization, so you cannot go too far, but have some distance still. So I think it works better when I have a little bit of distance from those everyday things.

Lisa: Yeah, it sounds to me like over the last few years in particular, there’s been a kind of evolution of the company becoming more resilient, more self-sufficient, and you’re seeing your role increasingly as being more coaching, holding this big picture, but less operational, less hands-on, less responsible, perhaps. And it sounds like the system is becoming more resilient, stable somehow.

Topi: And also, at the moment, we are doing quite a big shift in our system. So we have realized that we have to make some changes to the structure, because we have just grown out of this structure. So we have to have some kind of - as I said at first, we have these cells that are kind of breathing, but we have still try to maintain that, but at the same time, have some kind of structure that people would belong in some more stable teams or cells, which would be also multi-functional, so they could do everything by themselves, most things.

Because when we have approached 30 people, then the complexity of the whole thing has gone through the roof. And people don’t know each other anymore and stuff like that. So before we were like a family, and it’s really nice to work as a family, and now we’re not anymore. But I have started thinking that maybe it’s possible to have many families. So it’s still nice. I think the Laloux book maybe has some impression that it’s somehow dysfunctional, but I think it’s also good somehow to be part of something like a family. So we’ve been thinking that maybe we have a network of many families, that everyone belongs in their own families, and then the whole company is like an extended family.

Lisa: Extended family, yeah. So you mentioned there that one of the main challenges recently has been, as you grow, how to kind of manage the increasing complexity. What are some of the other main challenges you are facing currently, and how are you starting to navigate them?

Topi: Yeah, well, that’s, I think, the biggest challenge. And actually we have many challenges, but many stem from that. When people don’t know each other very well, there might be some cliques. I have been in the middle of solving those because people don’t know each other, and then it’s hard to talk directly. So it would be easier if people would work in smaller teams, instead that by themselves. The teams would be complex but the whole system would be a little bit less complex. So it would be easier to navigate a little bit. So that’s one problem.

And the problem we have had, actually, it’s related to COVID. We didn’t have the courage to hire enough people one year ago when COVID started. So after summer, we’ve been totally full, there’s just been too much work. And then it takes some time to hire new people. So now we’ve been hiring since November or something. We have tried to hire one new person every month, and sometimes even two. So we have been hiring quite a lot now, but that’s the other big problem we have, that there’s just too much work for our headcount. And that also makes it difficult. At the same time, the company should develop and go forward. So it’s hard sometimes to put those things together and have the time to think about other things than the actual work.

Lisa: Yeah, I wonder if you could share an example or two of moments that you’re proud of, like moments where you felt like, okay, this self-organization thing is really starting to make a difference now.

Topi: Yes, one moment in particular comes to mind. It was some time ago. I got a phone call from one of my colleagues, and she said to me that we had hired a new person, and she said to me that “we think that we should let him go. He’s not right for our company” and she explained to me very well why. And then she said, “but don’t worry, we handle this. We handle this.”

So at that point, I just said, “Okay, I think that’s good,” and the reasons were good, but I gave her a number to a lawyer just to check with him that this goes right. So it was, of course, not so nice to let someone go, but when it comes from a person that has no power over anyone else - just a normal colleague, not any of our founders or something like that - and she took that kind of responsibility, which is really hard.

Even for myself, I’ve had to let some people go, and have to sometimes have these difficult conversations, and it’s so difficult. Those were part of the reasons why I’ve had some burnouts, because I’ve had to do those things. It’s really not a nice thing to do, and sometimes you still have to do it. But she did that all by herself with her colleague. They were doing the onboarding and helping the new person to learn the job, and they realized that this is not the right person for us. So at that moment I felt, at the same time, of course, sad but really proud that people are taking that kind of responsibility.

Lisa: It kind of reminds me of David Marquet and “Turn the Ship Around,” the example of the submarine that he created as a more or less self-managing team. And he talks about the ladder of leadership that, at the bottom, is people asking you for permission, or asking you to solve it for them. And once you kind of build a capacity in people to be more self-reliant, it goes all the way up to someone saying, “This is what I’m doing. I’m just letting you know, I’ve done the work, I’m sharing with you all of my reasoning and stuff. You don’t need to do anything, I’m just letting you know.” And that, I think, is such a great moment as a leader to be like, “Wow, that’s a result.”

And I think especially when it comes to those difficult conversations, because I’ve worked with self-managing teams and organizations where employees are like, “Yeah, we want freedom and we want total responsibility,” until they get to something like that that feels really difficult and not always pleasant, and then suddenly they’re often like, “Actually, can the board take care of that, or can someone solve that for us?” So I think that’s really a positive sign also, like the maturity and the courage and the integrity of those colleagues to be like, “We’ve got this.”

Topi: Yeah, yeah, that’s true.

Lisa: So what are your hopes for the future? What is your vision for how this will continue to evolve in Vertia, this kind of culture, this way of working and being together?

Topi: I have this - it’s kind of a joke, but it’s not a joke - that I want to make myself unemployed. So now we’ve been taking steps towards the new kind of team structure that I was talking about. So I’m hoping that with the new way we are organizing, the teams could take more into their own hands, even the whole strategy. Even now we do that together, but I think that it could be possible that the teams could make their own strategies for their customers. They would be kind of customer-facing teams. So it would be even more out of my hands, everything.

So it would evolve more organically, the whole organization, and now we’re still kind of centralized, I think. Even though we are not, but still, for big decisions, we gather a group of people to make the decision, and of course, using the advice process, but still somehow centralized. And also the strategy is kind of centralized, even though it’s based on volunteers. But I think less centralized, more autonomous, and at the same time, of course, still collaborate with each other. I think that would be great if we could go in that direction.

And what I hope that this does, is that we could focus more on the purpose and the mission to develop the quality of construction. And we do focus on that, but somehow we still just kind of more do the work. And I think it would be great that people could be thinking more about the whole purpose and how can we together as a team help our customers and do that more. So that would be maybe my hope for the future, at least.

Lisa: Yeah, I think that’s often one of the stages of development with self-managed companies, is that the work of strategizing, envisioning becomes more and more distributed. Not necessarily, and there will be some who are more engaged in that than others, but people become more co-responsible for that, I think.

Topi: Yes, yes. So I think it’s more possible with smaller teams. It’s hard if you’re one out of 30, it’s harder than if you’re one out of 10, and then 10 of you have your own kind of strategy, or something like that, and your own direction. Even if it’s a part of the whole direction, it’s easier for you to contribute to that than the whole 30 people. It’s just more difficult, because not everyone can or need to even take so much responsibility for the whole. They can take some, but we are just normal people that work for us.

Lisa: Yeah, it’s easier to contribute. So I guess in closing, what advice would you give to listeners who are on their own journeys to becoming a self-managing organization, perhaps especially to people listening who are perhaps founders or CEOs or senior leaders? What tips for the journey would you share with them that you’ve learned from this experience so far?

Topi: I think for me, first of all, not to get too attached to some structures or something like that. Even though we have very similar structures to other organizations, we still have our own way everywhere. We have developed our own way of doing things, and it’s different to anyone else’s. Even if I now describe it, it’s somehow similar, of course, but find your own ways of working and develop them together.

And at the same time, it’s not easy. You have to do some bulldozing or something like that because not everyone will think that this is such a good idea. Or when something happens, then it’s maybe like, “Well, maybe this is not so good,” or anything. You have to kind of believe in that.

And then the third thing that I would advise is to take space for thinking. I go for walks, that’s my thing. And also I compose music. So it’s something that takes me away from my work. And also the daily walks, they take me away from the things that I have to do and they give me the space to think and reflect. And also it helps to have someone like a coach, or anyone to help you to think, and also someone that you can just complain to when things are not going well.