Why this model works

After many years of experimenting, several organisations like Crisp (in Sweden) have developed and evolved an operational model that works really well for us! …and it works for a number of reasons.

• First, adopting something like this fits our lean thinking and brand. Much like developers forking code on github, we can do it for our own operating principles and business rules …our DNA.
• This allows us to learn and build on the experience of others, to quickly build a business which has focus on more important things …like servicing our customers! rather than expending huge energy servicing internal needs.
• Building a sucessful operational model is a huge overhead and can take years to get right. Failure to get it right is probably the main reason many startup bussinesses fail quickly.

Here is Crisps discription of why this works for them, from their cause-effect diagram.

The key thing is the two loops - positive feedback cycles that keep getting stronger and stronger.

Positive feedback loops

Left loop:

1. Competent & motivated consultants do a better job, which leads to happy customers.
2. Happy customers give us a good reputation.
3. Good reputation increases our motivation further & attracts new competent people to our company.
4. GOTO 1

Right loop:

1. Competent & motivated consultants do a better job, which leads to happy customers.
2. More and happier customers leads to higher profit.
3. Higher profit means people can afford to spend time learning new things (instead of trying to make every hour customer-debitable), and feel more safe doing so.
4. Taking time to explore and learn new things together makes us more motivated and more competent!
5. GOTO 1

Measure and manage motivation. Profit is just a side effect.

The key point is that we focus on keeping ourselves and our customers happy, not profit or growth. Good reputation and profit are simply side effects of keeping ourselves and our customers happy.

Hire awesome people, or don’t hire at all

Recruitment is crucial - the model only works as long as we are super-picky about who we bring in. If we start getting below-par consultants, the positive loops above could easily turn into negative loops (bad consultants => disappointed customers => bad reputation => the best consultants leave => etc).

We’d rather grow too slow than too fast, so we pretty much only hire people that we already know are awesome. We’re a bit lazy in that sense, and grateful for other companies that provide a place for the juniors to grow and learn :o)

See Recruiting for more details on this.