Jabi Salcedo and Dunia Reverter on K2K’s 10 keys to becoming a self-managing organisation

Lisa: Okay so first of all thank you Dunia and Jabi for coming on the Leadermorphosis podcast. It’s been a conversation that I’ve been really looking forward to having and I know that a lot of listeners are really excited to learn more about the K2K and Museondo story. So perhaps we could start by each of you if you could say something about your role in K2K and also if one of you or both of you could share what is the mission, what is the purpose of K2K Emerson?

Jabi: Okay thank you for inviting us. We are happy to be here. Well, I believe that we all of us, we have the same role in K2K. We don’t have different roles according to what we are going to be doing. And really what we are doing is we are working in changing the culture of companies and all the time that we have, to adapt the companies to a new way of thinking, a new way of managing, and to have different parameters to be managed. And the purpose of K2K probably is, let’s say, following the idea of Koldo Saratxaga, which he wants to change the world. Obviously to change the world it’s a big task, so we have decided to change some companies which is like a small drop in the ocean, but it’s trying to change to a better world.

Dunia: From my side, you know me, Lisa. I’ve been wanting to get involved, I also want to change the world, so we have compatible purposes. And since I read the Laloux book I realized that my role in that change had to do with organizations and helping organizations transition to a new paradigm, not just improving a little bit but a new paradigm. And I started this quest with you and I finally found partners in crime that I could collaborate with and get involved in some of these transformations, which were K2K. So right now we work together to do this transformation.

Lisa: Thank you Jabi. When you say “some companies” I think what struck me when I first learned about K2K is the number of companies that you’ve transformed consistently and with a lot of success. How many companies is it now?

Jabi: We are not counting any longer but we are over 85 companies already.

Lisa: Wow.

Jabi: And this took a lot of time at the beginning because we were only two persons and then we were growing. Now we are already 12 people working on transforming companies, so right now really will be the timing, the time where more companies are being transformed at the same time.

Lisa: So let’s talk a little bit about the process. Could you share something about—you know, some listeners will have read the blog that I’ve written with that beautiful infographic of the ten kind of key components for this translation process and I know there are more than ten—but I’ve heard you say that those ten are kind of non-negotiable, that if a company isn’t willing to do all of those things then you say no. So can you say something about the process, what it involves, what it might look like?

Jabi: Okay, maybe before going to these 10 areas of the process we can go one step before, which is how we go into a company. Because really probably there will be others right now, but we have not seen anyone have to know that we are the only consultants that are not hired by the property. So before going to a company, we need to be with the owners, the owners need to know what we are doing, they have the freedom to go to other owners, we contact them and they can be with them alone so they can see all the process that they went through.

But once the owner comes back from this visit with us and they take a decision, they need to vote and they need to unanimously say yes. Because most of the companies are million and small companies and most of them have or has more than one owner. But once this has happened, the second thing is that we’ll request the vote of the employees. We don’t go to anyone if the employees doesn’t go through the same process, which is great, learn, go to other companies to be able to speak with our employees to see how they went through this process.

And after this happen then we go to a general meeting, we stop the activity of the company, we go out of the company, we sit in a theater for example with about one hour to explain how we are going to be working, and then we request their votes. And if they don’t vote in proportion higher than 80-85 percent, we don’t go into the company. This once happened, because sometimes this does not happen and they don’t vote at 85. I never have been in a vote where we didn’t get more than 60, but when we got 60 we decided not to go because 40 percent against this is a big proportion and it’s going to make this very difficult.

But once you go above 85 and we decided to go, it’s the first time the employees feel they have taken a decision in the way the company is going to be managed. So there is energy both ways where they are willing to share with you things and they are willing to help you to change.

Dunia: So on this point, because I’m a bit of a newbie right? So I can still speak about, you know, almost as inside and outside. And all my life I’ve been involved in transformation and this was the first time that after the vote, the first implementation I’ve been working with K2K on, after the vote the support for the change was so incredible because the people feel responsible if they vote and they’re the ones making the decision, they are the drivers of it.

Of course once time passes, change is difficult, we have to face—you know, facing cultural change is hard, we have to change our habits, and then we forget a little bit. But it gives us a huge momentum especially at the beginning because everybody is behind it, and I have never experienced this before in any transformation, so it’s so powerful.

Jabi: And maybe coming back to the ten steps, and there are two things. One is, we have a clear idea that to change the culture of a company you need to apply the 10 of them. And sometimes when we are in conversation with owners or managers they only want part of it and they don’t want the rest, but after more than 50 years from my size, from my part to be applying this, it’s clear that this is a complete circle. You cannot take any of this, if you take any of these pieces completely there are things to that you can do, but you take completely this does not go correctly.

And all of them, all these term different activities are linked, they link because we are trying to say okay, we need to get the trust of the company, to get the trust of the people, trust, confidence. To get the trust you need to be transparent. When you are transparent you need to learn to teach economic, you need to take all the decisions together all in a way that they can be part of all these decisions.

So when somebody tried to tell “okay, I don’t want to be completely transparent,” you’re not going to have the trust of the people because you are going to be hiding things and then they are going to be thinking “why you are not 100 percent transparent, something is going on that you cannot share with them.”

So basically we do—we create an environment that is transparent 100%, we go through working on the trust of the people with a no control. We don’t control anything, we take measurement of everything but together, not control. It’s something to be able to take measurement of everything allows you to evolve because then you… But these are agreed on the teams so the teams know why they need to be measurement.

We do a very specific thing which is we make a balance on the salary. This is a very important thing that sometimes this create some kind of stress before we are going to do the change in culture. It’s one of the things that many times, mainly for the managers, make them not comfortable at the beginning.

We share the results, we split the results automatically on all the employees, and we don’t lay off, layoffs, any one for economical reason. This door is closed, which means that you need to think another solution when you have a bad economical situation. And I don’t remember Dunia if I forget any of them, probably one or two…

Dunia: Ah, and we take decisions altogether. All the decisions and the important decisions related to numbers and related to labor on social issues are taken among all of us in meetings. And obviously there is not many companies who have this operational system before we get there, and this is a process that takes some time to be applied to change their minds.

Lisa: What of those 10 things, what are the elements that—you mentioned that the one about salaries tends to create anxiety. Could you say something about that a little bit more and also what are the other elements where companies might say to you “can we just—can we not do that one but do the rest?” What are the ones that are most scary for people?

Jabi: Well, one thing that we do is we don’t—let’s start all over and all the contrasts are related to two things. All the labor contrasts are related to two things: one is the time that you are selling to the company—you sign the contract based on number of hours per year—and in exchange of your time they give you money. So all the labor relation is time and money. So both things are always on the focus of all the management teams when you go to normal hierarchy companies, and they need to renew the conditions with the unions every two years, every year, three years, always the two main topics is how many hours and what is going to be the increase of salaries.

So we do the two things and we say one: we don’t work extra hours, we don’t want to work extra hours, we eliminate the extra hours.

Lisa: Overtime.

Jabi: Overtime? Yes, okay, all right. And the second thing is we want to have a balance on the salary. And the balance on the salary is because we’re going to make everything transparent. As we’re going to make anything transparent, doesn’t have too much sense to say “all right, we are going to be working as a team all together in different teams.” All right, the teams they are supposed not to have bosses, they are not going to have any boss, they are going to choose their own leader.

And “we are going to keep the salaries structure that we have in the past.” Because when you go to review the salary structure of the companies, is like the radiography, x-ray of the company. You can read the history of the company on the salary structure, because you can see that people doing the same kind of job they don’t have the same salary and even with big difference because of the history or because they—how they negotiate.

But then we go back transparency. I’m working on self-management. If you don’t change this in the salary structure they are not going to be working as a team because one of them can have probably 30% more salary than the other and the only reason is the history of how he is able to negotiate with the manager.

So this is the first thing that normally we need to explain to the property or to the ownership, to trying to avoid that they feel some kind of worry about this. The second thing is not having any control, not having any control and not having any kind of jerk because no one of us has been studying in the university or has been working in a previous company with no jerk. All of us, we always have been working with jerks.

So for an owner to say right now “okay, we’re going to be transparent, we’re going to be a balance of the salary and we’re not going to have any control and bosses,” this is something that makes them nervous. They don’t see how this system is going to be working.

But the point is it’s clear: you cannot apply one without applying the other one. You cannot be able to only to choose any of them. The reality is that once you go through the balance of salary, this is probably—there are two moments that are very good when you do one of these transformation. And one of them is when you go and present the ideas so they are going to vote if they want to go ahead or not. And you see the kind of questions because we go to a general meeting, we make a presentation with basic ideas and then we allow obviously them to ask questions, and you see that the questions are always related to the same three, four, five points, always thinking with the previous system with the old system, but it’s impossible for them to change.

But the second nice moment is when we—after two months that we have been analyzing the organization, we have been working with all of them—we do the balance of the salary, we eliminate any control and we make the general meeting to present all this so they see how they are going to be working. And the way we do it allows you to see all the salaries but not to have those identification, not to have the correct identity of each one. You have an idea if you ask, if you raise your hand and you ask we tell you who is this, but the way we have—you have all the names down there, you see the point. So you see that there are somebody out there and all of them are trying to understand “why some of these people were so high, why they are in this, where I am located?”

Because when we do the balance we explain how we are going to be doing, where are you now and where are you going to be in the next two years. And once you go through this, probably the next two months you have some kind of talking and somebody who wants to speak with you, but once you do this is something that you forgot for the rest of the, of the next five, ten years. You don’t need to speak about salary any longer. And if you go to hierarchy companies every year or every two year you need to speak with salaries about salaries with all the people, because somebody wants to grow, somebody feels that he needs to negotiate because now he has a master in Italian and he wants to be paid for this, or with a union you need to see because the price are changing, this kind of things.

So is one of the most difficult things to do but once you do it you solve a problem for—and you create—once you solve this problem, you create an environment, an area where you start thinking as a collective, not as an individual. Because when you negotiate your salary individual with your boss every day, every year, so you go to your boss, you sit over there and you say “Lisa, I want an increase in my salary, because this and this and this.” You are thinking for yourself and against the company. The company is like something that is against you.

But when you are in a system that Lisa, Dunia and I we are doing the same kind of work and we are going to have the same kind of salary, we start thinking as a collective because really we are not trying to have a differentiation because Dunia is smarter than myself and she can go and ask for some kind of inclusion. Sorry, I don’t know if I explained what I wanted to say. Dunia, probably you can help me out this?

Dunia: No, it was perfect. We—for the implementation I started working on, we did that announcement that Jabi talked about and many people knew where they were, others were not too sure, and everybody was shocked at the differences that there were for some people. And then we had individual meetings with each of them to say what it meant to each of them. And once we did that—and I’m not sure Jabi if you know this—but we actually disclosed everybody’s salary, so everybody knows everybody, there is a list that everybody has access to and it’s okay. Once we have that conversation with everybody, it’s okay.

And back to your question, Lisa, on some of the things—we are currently, we have attention now that we are kind of processing and assimilating as a team. And it’s already attention coming from a self-managed team, so it’s not—it has not to do with the owners giving power etc and negotiating at the beginning, but more as we—transparency right? We were talking about transparency—as we move along and people gain that confidence of collective decision making, we have this issue where if I am, if I tend to be more conservative right, more risk-averse, and you’re more optimistic, I’m not gonna show you all the information to make sure you don’t make any stupid decisions, right?

And we have this tension going on on “let’s share the facts, let’s share all the information, not just your interpretation,” and then we talk about the risks and opportunities opening. Right? But we all need to get used to—yeah, we are all adults, we’ll all understand it, and if we don’t we’ll ask questions until we do, and then we’ll decide. But don’t worry, you know we know if you think it’s risky, make sure you know we will all know, but it’s okay to do it together, right?

So I think it’s funny because the team, the self-managed teams themselves sometimes wanna not share everything so that they don’t build false expectations from the others, right? And it’s okay how do you work with that so that you know “don’t worry, it’s okay, we know that you’re not gonna sell everything you have on your pipeline, it’s okay,” but giving that visibility is good for the other things. You know, there’s so many examples of that that I found interesting because it’s kind of, I think on the next phase right, once we’re operating like this, the next culture area…

Lisa: It reminds me of my project manager days where if there were people I knew in the company who tended to do everything at the last minute or were not so great at deadlines, I started to build in false deadlines—

Dunia: Buffer.

Lisa: Buffer, yeah. And so yeah, I can see that that’s kind of my parental version of—you know, rather than giving some feedback and saying “you know, here’s the reality and I have this concern that what might happen is this. What can we do about that together? How can we make this work for both of us? Here’s what I need…” And yeah, it’s interesting.

Jabi: Maybe following this conversation right now with this COVID, there is a very difficult situation in many companies and some of them they already went through the process with us and ten years ago, eight years ago, four years ago. So all of them are sharing all the information so they are able to take decisions about “how we are going to go the next four months because we don’t have orders, because we don’t have enough work, how we’re going to be doing these kind of things.”

But the companies that are used in the transformation phase and we’re another less than one year, one year and a half, you can see how the owners and some of the previous managers, they don’t want to share all the information because they feel people is not ready to get all the attention or to have all the information to see what they are going to be facing. Which from my point of view is a mistake, because we have the COVID at home, we have all the risk wherever we go. And here is “okay, let’s put all the information together, let’s see what are the alternatives and let’s try all together to see which one is the right decision.”

And still this week I am working with some of them where they want to give this by pills, small pills today and then in two weeks we have a different meeting and then in four weeks. And really I mean we need not to stress people, need to learn, and I made a lot of mistakes when I started to change culture in the organization. So “all right, let’s try to learn on the process,” but really information need to be transparent 100% because this make things easier and faster. This is true.

Dunia: And safer.

Jabi: Yeah.

Dunia: I wanted to add—more robust decisions if we have that.

Lisa: Yeah, I—when you when you share that Jabi, what it makes me think of as well is that my sense is that one of the key obstacles to this transformation being successful, you know, even with the perfect structures and processes and even though former managers are no longer bosses and they have no formal power so to speak, but if my—if my mindset or of my way of being and maybe unconsciously I’m doing things still like holding back information or being in a way that is a little bit controlling or—then I can imagine that that would be really in the way for a team or an organization to really be self-managed. How do you—how have you navigated that challenge over the years and how have you supported former managers on that journey?

Jabi: I think—oh, when I started—

Lisa: You froze a little bit there, you froze, so maybe to start again.

Jabi: Okay. We have evolved, we have evolved. If I think when—where started in—when I started, what, the year 2005, first speaking of an organization based on person was like being—how do you say, estranged?—and somebody came from from the out of the war. Nobody understood this language, neither Koldo. I must say even myself at the beginning I didn’t understand too much how was this, his focus.

But there was a resistance for from, from part of the managers and we were very hard. I must say we were her—we have a way of doing things more or less that “all right, we need to look after the common good, so don’t be in the middle because I’m going to not—whom not to eliminate, but then I’m going to not to take too much in consideration and being focused on what are you doing.” So not not be in the middle.

But now we have evolved this and we understand that we—first thing we try to give them time so they are able to understand that they, not—they are not, how do you say, necessaries, and for this decision they needed, needed for this decision, that there is a collective intelligence that can cover any of the individual intelligent, so don’t worry, don’t don’t be in the middle.

And the other thing is, before we used to take decision when we were doing these changes and transformation and somebody was in the middle, we used to say no and “let’s go in this direction.” Because we came from the management, all of us we have been many years in the management and we were able more or less, we make mistakes like everyone, but to keep going.

Now even and what we do is, even if it takes time, we wait. We take time with these people and we get more time with the team so they are able to understand why this is not going in the right symptom or in the right line. And lately in the last three years we have started to take from, let’s say, the market some kind of applications. We have a friend here called Christian who told me something four years ago, five years ago, who was—okay, this is the first time he has been close to us many in many years, and he told us this is the first time I have seen a operative system, making a comparison with the computers, that really works in a collaborative mode. And he make a comparison of in the Windows and the MS-DOS.

Lisa: MS-DOS, yes.

Jabi: And so he made this comparison and he told us “but there are many applications on the market that you need to add because you have been developed all the different things.” And obviously and this is clear and I say “yes, there are other people who has developed things that can be applied perfect to what we do,” right?

So now in this aspect, we have teams that they don’t have a boss, they have a leader. But we have started to use things like the consensus and decision by consensus. Do you know what this is?

Lisa: Yes, from sociocracy, correct?

Jabi: Correct, correct. For example, this is something. So with this you avoid this kind of situation because if the manager is in a situation where he doesn’t feel comfortable, we need to work a lot with him, but we work with him, he feel that we are working with him and we are not pushing him to go away.

So it’s true that in the last 15 years we have changed a lot in this aspect. Nevertheless, I can say and Dunia can enjoy me—join me in this—there are some managers that, because they have been working 30 years in this way and they are in specific areas, and one of the most typical areas on this will be the financial area where they speak a different language that sometimes I will explain this like an old tribe in the caves where you have the boss—which now there is no boss—but you have the, how do you say, magic man, the medicine man. And the financial guy is like the medicine man.

And then when when you are in a meeting and you are trying to construct something, he says something, he’s a “cash flow” and everybody go down with it. We don’t know what is cash flow, cash flow, and then this person is able using these two, three words—“cash flow—we have a bad cash flow,” everybody stop, everybody stop.

And and it’s clear that this person is not doing this because he wants to go against what we are doing, but he feels that his knowledge is not shared with the rest. All the rest cannot understand what what his role or his knowledge supports. So this takes a lot of energy because you need to devote a lot of time trying not to erase this person, right? Work with with the person or with the—maybe it’s a two person in the same department and the rest of the people not to be stupid because they don’t have the support and the right support that they need to get. And I cannot—one more thing—is in many companies for example, financial area is like a control area, and with us need to be in the other way around.

Financial area, economical, is a support area. You need to give all the information, you need to be able to explain all the things so people who are doing the service or producing the products, they need to understand the economics of this but they need to take decisions. You are not supposed to take decisions on this.

Dunia: Yeah, and this is a huge learning for me. And remember, Lisa, we talked many years ago about you know, if we want this to spread we need to have lots of coordinators, lots of facilitators of this transformation, and what are the sort of skills or what are the sort of tools they need to have, right? And definitely things that have to do with inner work and with people skills, facilitated skills are really important, coaching.

But I’d say that good—for example financial understanding of a business actually is important because in this phase of transition, it’s almost like you’re the gate to keep a safe space. You actually need to understand it and be at the level of that finance person and then articulate with the finance person why that’s okay in their language so that you know, and spots when you see times when the information is not flowing in the right way or in a clear way, and kind of work with the with finance to get them to open up. And it’s okay, but it’s a lot of work because it’s really challenging the paradigm. It’s really challenging the paradigm on how you know what good financial controllership is.

Jabi: And once this happen, once the employees understand the numbers, these financial peoples they live a lot better because then the companies focus on the other things, but this focus on producing with the gross margin correct, with the profit correct, so then they can make investment. So their life is a lot more easy, I will say.

That many times when you go to think from outside in a company who is going to be the, let’s say, body of the company who is going to live better in the future, you have the property, you have the managers, high management, the interim management, intermediate management, and the rest, the rest of the work. And we always think that the rest of the workers from outside are the ones who are going to have more information, they are going to be able to co-create, they are going to not to have control.

But really, when after five years or seven years, the people who fit better in this new organization are the previous middle management. Because when you are middle management you are not the managers and you are not employees, and you are working in a hierarchy where you are in a land of nobody and with pressure from down and pressure from the top down. And this disappears, this thing disappears.

So meaning that these areas, once the transformation is creating a culture and you go four years, five years, or years, really they love how they make the change. But they have been—and how do you say, they have been studying—they have been—their teachers told them that they need to do what they are doing right now before we get there. They need to control, they need to be the owner of the numbers, they need to have information, they need to—all these kind of things, so the only thing they do is what they have been told.

And we are speaking on finance but we can go to sales, we can go to production and we can go to…

Dunia: I was going to give another example that was really interesting for me personally. Another of my learnings was putting together a budget for next year collectively, right? The first collective budget that we had to put—of course there was the challenge because we had just started in the new organization, so there was a challenge of everybody being on board in terms of understanding the the financials so that we can actually put together the budget.

But then there was—it was really funny because I had this old part of—I’m thinking that when together a budget, people turning numbers, they tend to be conservative and then we have a bit of a gap. But where it would be ideal, and then there’s some sort of stretch. But who puts that stretch? I’m not gonna do it. You know, I’m not the boss. So actually there’s no—nobody’s stretching them and they’re being super conservative because they’re afraid of not meeting the target.

So I’m like “what do we do?” So I tried to apply pressure and then it wasn’t working and I was seeing how people were just closing down and becoming more defensive. So it’s like “okay, whatever, we’ll be—we’ll have a conservative budget and then we’ll sell more than that, and then we’ll redo it. It’s okay, then let’s put there what we feel comfortable. Once we achieve that we’ll put something else together.”

So for me it was important, interesting because I had to let go of old patterns, but also to observe how this is a journey of building that trust. And the first time we go, we go you know a little bit, and then as we learn and as we get comfortable we become more, more daring on our projections. But it’s very iterative and it takes time.

Lisa: I’m—so many places I want to go with this conversation. I think what I really, what I would really love to hear and perhaps Dunia you can share because you’re, it’s very fresh for you in in the midst of this fairly new transformation that’s underway that you’ve taken on—what are some of the results? Because I think that was another thing that struck me when I first heard you talking about K2K was was the the impressive results often in a short space of time, often with companies on the brink of bankruptcy, you know, becoming profitable and and all sorts of incredible results. And that and also kind of human results too, like not just those ones, but but what for you Dunia has been most kind of positive in terms of the shifts you’ve noticed?

Dunia: Yeah, I was shocked at how fast that came. So this company has had difficulties, and difficulties that came from a big drop in the volume forecast, right, of our main client. And the speed at which POs started coming and execution, execution went along, and we managed to save a year that was going to be a loss-making year most likely, actually made a nice profit. And then you know, filled up the next year with orders—I didn’t expect this speed and I’m thinking “is this coincidence, it’s like was this gonna happen anyway?”

I don’t know because it’s just such a combination of all these different factors that you know you cannot attribute it to one specific thing. There’s just many little decisions, but I do think—I do think it has to do with everybody being more focused, like more excited about going on this on this journey together. And it just creates this huge energy release at the beginning.

Now one of the challenges I found was so that people see that, like to play that back to people because you’re in the midst of the battle and you just—you come across the next problem and it’s the next one and the next one, and it feels like “oh everything is…”

I remember being at one meeting and everybody’s saying “I’m worried, I’m worried, worried” like as we were doing the check-in. I’m thinking “guys, there are problems, okay, yeah we have, let’s play a project here this…” But do you realize what happened? Can we just kind of like stop and go back and check, because this is crazy I mean like how much we’ve been able to to move forward in such little time? It’s incredible, so let’s celebrate.

And yeah, so I was very, I was very shocked at how quickly the results came and how abrupt the turnaround was, and the sustainability of the of the company going forward. You know, the forecast that we see it’s really healthy now. So it’s quite incredible.

And then in terms of people, you know, we’re working with this coaches that were working in this company before, and I was just having a conversation with one of them today and she’s saying “you won’t believe the difference”. There’s a lot of work still to do in terms of maturity and people being able to to to work through tensions in a constructive way. But from where, from where the teams were before to where where they are now it’s it’s a huge difference.

People now are speaking up and before you didn’t see that in this sort of meetings. So I was really happy to hear that.

Lisa: All right, I was just waiting to see if you wanted to add anything Jabi. From I mean you have many, many, many years of experience of working with a number of companies so you’ve seen all kinds of remarkable results I imagine.

Jabi: Well, maybe I will repeat myself from previous ideas, but the point is if you have most of the people with a common goal, is impossible that you have worse results than in the previous. If you have an organization where there are different layers and each layer has a different goal, it’s more difficult to get with a common sense where to go.

So really the idea here is if you put all together looking to the same point, it’s going to go faster and it’s going to go better. And I can probably, if I start thinking, I can review companies where we, they came to us in situations where they were maybe four months not paying the payroll, all right? So in this one probably it took us two years to to ahead, but they are still living and they have a good salary right now and they are giving profit. Not any more on this.

Lisa: I would say I remember something you said as well when I, when I attended your workshop in Portugal, which was sometimes when people are shocked by how quickly the results happen and they ask how that’s possible, you said this great kind of provocative thing that “well, before 15% of the company were managers and they were spending all of their time, you know, controlling people and supervising and stuff, and suddenly that fifteen percent of people are now all working on the same goal and adding direct value to the company.” And so I thought that was great observation as well.

Jabi: Well, we still use this, you know, in the same way, but says colleen—how do you say “gracias” (grasa)?

Lisa: Grease or?

Jabi: The fat, area of the fat, area of the body that you have over there. We change this in Moscow, we change these. You have a big—and then this is more easy to run or this is more easy to roll, this is more easy to… So this is true.

And one thing to be clear that’s metaphor—I like that one. The fault is not of the fat, the fault is the brain. The brain has created the body and they have it in this way, so they go to—they are called to do a part of the job that somebody is thinking that this is the right way of managing this company.

So this need to be clear because many times when we go to a company and we speak with the with the media management and they think like they are doing something wrong, they are not doing anything wrong. They are doing what they are told to do, to do, nothing else. But when you ask them “do you think these people can do their job without you being here in the next six months?” and all of them tell you yes. And if you go to the people and you say “do you think you can do your job without the middle management here the next six months?”, “we do better”.

So this is something that is clear but the brain, the brain is thinking that this is needed because they want control and they want to, to let’s say, to make or to pass the order from the top to down.

Lisa: Yeah, this is where—still use this. I’m thinking about what you were saying before Dunia about it really the the breadth and depth of skills it takes to support organizations on these transformations, and that it’s you know tough, that it’s hard work and there’s so much kind of learning and unlearning for people to do. So I’m curious about how long K2K spends with an organization and how, how do you build the capacity so that when you then kind of step back it doesn’t just go, you know, revert back to the traditional ways of doing things?

Jabi: Okay, well normally we spent three years in each organization. This is the average time, with a different intensity. It’s not the same intensity at the end than the beginning, all right? We have three different ways of changing the culture. One is a company to the manager. If we think that the manager of this company, he has the structure in the mind that he wants to do this, he doesn’t have too much history doing the hierarchy kind of model, then we say “all right, we can help this person” and let’s work. We do all the process but then we work with him.

The other one is we see that the general manager or the owner who has been running the company, he has created this culture, even he wants to change everything that we’re going to be doing. He’s going to be taking this as something against what he did in the past. So we try to to say “all right, you can devote to other things” and one of us will be the coordinator, the general manager, and at the same time we are going to be changing the company culture.

And the third step is, now we don’t go every week and we are only once a month sitting with the pilot team. And once they have gone through the cultural change and we see if there are some things that are changing or some things because—one thing about this style is that all the rest of the world is going with a different operative system. So all the conversation outside of the company with your suppliers, with your customers, with your brother-in-law, with whatever, you want a conversation that try to make you to go back to the right path, which is the general key path.

So if you go out of a company and there is not any kind of support, new people that they are hiring, their customers, orders are giving the inputs try to go back to the previous situation, right?

But in these three different ways of a company—a company, we make clear that we are not going to leave one company if we don’t see that they are ready to live. I have been in one company eight years and I have been another company five years. The reason I have been eight years in a company is because they—when we started they were in 100, they were 100, they only have one plant, and through this change of culture we buy two more plants, we create two new ones, and we grow up to 450. So every time that we were changing the culture we were growing and there was no point—there was not a possibility to live this in in any of these moments.

So we—one thing that we do is after the third year every year we request everybody to say “all right, do you want us to keep going? All right, we keep going.” We don’t want to be many years in one because if you are many years in one, you don’t apply this energy to others, all right?

And in in another one I work five years because after three years it took us two years to find the person who will coordinate this. There was no one inside and we tried with one person outside, but this person outside really, I don’t know, this was for him this was a—neighbor?—because he was a real nice person and well prepared. But obviously he didn’t know anything about the product itself because he was coming from outside. And all the rest they, they, they—once after four years, once we changed the culture of the company, they were looking at him as if he was a person who didn’t understand anything.

Because one thing is to understand—I always say the same thing, if I read a book for a, be a pilot of an airplane, I can understand what is in the book, all right? But if I tell both of you “okay, can go with me? that I read the book, I’m going to be a pilot in a plane,” you will tell me polite “no, no, I don’t think I’m”—even not polite—“I don’t think I’m going to!”

So this, this one he read everything, we sent him to other companies, but really he was not able to feel what was going on, and the pilot team after six months with him they needed to give the green line to this guy to say “all right, you are going to be our general manager, coordinator for the next five years because we want to to to focus the future with you.”

And this was a very tense moment because they were telling “you are a great person, you have a lot of abilities,” and people with a—people from the workshop, people—because the pilot team they were something like 12, and any of one they didn’t want to to to create any kind of problem with the person or make him feel bad. But they knew that this was not the right one, and then we need to go to another process again and then the second one this this happen.

But going to your question, one good thing is we do now. I told you that we are many doing many because we are 12 people. In the past we only were seven, for many years, but we are not trying to go too many. We are trying to go too few but trying these companies really to change the culture. So we are not in a hungry, we don’t need to jump from one place to another. It’s more important maybe to stay another two years, but this one will be some reference for the future.

Lisa: You’ve mentioned pilot team a couple of times. Can you explain to listeners what the pilot team is?

Jabi: Yeah, well Dunia can do this.

Dunia: Yeah, sure. So you know, as as you’ve talked in many other podcasts, it’s really important to have a strong structure in self-managed themes. So so the two sort of themes that are created through representatives of all the other teams that get sent to these meetings are they, we call them the “compromiso” or commitment, planning, commitment, and uh, which is steering so there’s the steering team which is more like a governance sort of team that is made up of representatives nominated by all the teams in the company.

And then the uh, the commitment, which are more the tactical sort of meetings in sociocracy for example. The planning meetings. And these are two very important rhythms that the company needs to have for things to move forward. So very important to have healthy, healthy rhythms, good frequency and healthy meetings.

Jabi: Yeah, so kind of getting those calibrated until they work really well is very important and it doesn’t come on the first day.

Dunia: So the pilot team is the the kind of the governance team or the steering team, made up of representatives. So basically all the other teams in the company—imagine liars production engineering—send those two reps to to represent.

Lisa: Thank you. I yeah, I’m trying to think how to start to wrap up our conversation. There’s so many more things I would like to ask, but I guess I’m curious to to hear from you both what you hope for in terms of the future of K2K and the transformations. You know, we started with you both sharing this desire to change the world, you know, one company at a time. And Jabi, you’ve talked about how K2K has evolved over the years and now you’ve changed your methodology to perhaps be more involving with the managers and and sort of less, let’s say controlling or directive or something. What what is the sort of next phase or what are the next questions that you’re exploring?

Jabi: I will say that is not related to changed thing in the way we do the transformation. The way we are doing the transformation probably will evolve because we—but we right now, and Dunia were explained before, that maybe we need to devote more time for finance or things like that, having a support team to do these kind of things. But it’s not about how we do it, really is about how we are able to share this knowledge and not only to share the knowledge with more, which we are—we started three years ago more or less and is going in a good path.

We are creating what we call a network that we call a “nerf” universe, where not all the companies need to be at the same level and not all the person can be, person not only companies can can join to this universe, all right? And this trying to create like a movement, trying to create a some kind of… Really in the Basque country, which is a very very teeny country, is only three million people, we already are how do you call—they call—like the unions or the “patronal,” which is the the ownership, whenever there is something they call us that we are—we are like a body that can give some ideas and they take our opinion. But this is another three million in seven thousand years is nothing, but but the intention will be, this will be how we are able to share more and how we are able to create some kind of of a network or universe where we can share things and we can allow to a spent, expand what we are doing.

You always take the risk sometimes because obviously when you go too fast and you try to cover too much, probably you can have many, how do you say, not success, many failures, all right? And each failure that you have is enough for many people not to try to to to follow what what you are trying to do. So we need to balance among both things.

Let’s try to—which is what we are doing now—let’s try to to share what we are doing and then trying to create a good, among many others, but let’s take some kind of a vision where we don’t make many failures.

One thing is we have made failures, I haven’t been making failures in the past, all right? Which for us has been some learning process, it’s clear. But you cannot have the same learning process one after another, we already did some. So let’s try not to do the same right now. And Dunia is now working on this in both areas.

Dunia: Yes, the seminars we might have one in English coming up…

[Laughter]

Dunia: Yeah, I I think everything that Jabi said. So you know that for me it’s how do we make this contagious, right? So and and it does, it’s hard to find—it’s hard to find people that can be, that can have it all in them and and have that energy and that vision to to transform and it’s a it’s a learning process. And so how do you—how do you make sure you you grow that but without sacrificing the quality that can be quite bad for the movement itself, right? So how do you get the scale without jeopardizing the quality and the depth of the transformation, so that we make sure it’s truly a change of relevance.

Lisa: Any other final words or thoughts you’d like to share with listeners?

Dunia: Well, there’s for me there’s one…

[Laughter]

Dunia: …because we talked about the good things, right? Like you didn’t ask us about some some bad things and not bad things, but one of my big learnings has been the—I completely underestimated in this, in this transformation what Jabi mentioned before in terms of the the the importance for the owner of letting go and how hard this process is.

So so it’s almost like a double dance that we’re doing when we’re doing this transformation, it was my my major realization just last week. We have to have two dances, we have to dance with the organization that it’s becoming self-managed and we have to dance with the owner who’s stepped aside but it’s still there, he hasn’t gone anywhere, right? And in in our case I’m feeling okay, we needed to dance more…

[Laughter]

Dunia: …with our owner. So it’s a double dance and in many cases it’s hard for one person to do both, so you dance with one of it. So that was a big reflection as well in terms of some of our learnings from from this transformation and going forward, right, and things that we could do differently in the future.

Jabi: Double dance. Well, really what I was thinking while I was visiting Dunia is that what we do, what we try to do, have a lot of common sense. When you explain what we are doing, I don’t see anyone thinking “no, this is wrong, no, this is wrong.” No, what they are thinking is “no, this cannot be done, no, this cannot be done.”

But sounds in a good way sounds—what makes and what we want for our environmental in my house—I have people who has freedom, who is creative, who goes in the same direction, right? So in the companies is the same thing. But the point here is that looks like if you are going to try something, this change with us, you have a big risk of a failure—in any case, if you change, to if you try to change, you always are going to be better than you were before, no matter if you go to 10, to 9, to 8, to 7.

I will say that you have a scale from 0 to 10, you always will be in in a in a better situation. And there are things that somebody can do without—some of this scale, some things that you can do in a company, not not not the whole process but part of the process, only having common sense, all right?

So I want to thank you to to allow us to explain this in English because we really, we are a lot we’re focused in in Spain and Portugal or Latin America. We have done things outside in India, but anybody and this, I believe, is a good opportunity for people to to listen us to try and explain what we are doing.

Lisa: Well, thank you so much, both of you. I so—I was blown away at Teal Around the World, and I’m blown away now just by your humanity and your honesty and your humor, and just how openly you share this story. I know it’s going to really, really resonate with people listening and really inspire people. So thank you for how you show up in the world.

Jabi: Thank you.

Dunia: Such a pleasure.

Jabi: Such a pleasure, so much fun. Thank you.