Co-management is a radical and fair way to run a company. One company’s approach of having no hierarchy and no bosses has allowed for a more collaborative and communicative environment, where teams can solve problems together.

Matt Perez is the co-founder of Nearsoft, a software company that practices co-management. Instead of having bosses, they have leadership teams that solve problems and make decisions. They also have a unique approach to dealing with poor performance before it comes an issue.

Matt’s tip for a happier workplace

Workplace happiness involves being true to oneself and respecting others' boundaries. By finding common ground, differences can be resolved, creating a more collaborative environment. Face-to-face conversations are especially effective in resolving issues and finding common ground.

Links

• Connect with Matt via LinkedIn
• Radical Companies: Organized for Success Without Bosses or Employees – Matt’s book
• Maverick: The Success Story Behind the World's Most Unusual Workshop, by Ricardo Semler

Welcome to this edition of the Happy Manifesto podcast, and today

we've got Matt Perez of Nearsoft, a self-managing organization.

I'm Henry Stewart.

And I'm more Egbe.

And what's been joyful for you

Oh my gosh.

This may not sound like it's a big thing, but it's a big thing to me, Henry.

It's big.

Big, big, big.

Big.

I managed to fix a puncture tire for my bike.

Excellent.

Maureen.

Yes, yes.

You know that since I was a little kid, when I had my first bike, I stopped riding

my bike because I couldn't fix a puncture

Oh really?

Totally, totally.

So, um, Yes, I fixed that puncture.

I found out where the hole was.

I'd done the whole service, Henry, I did.

I had my brother watching over me who was just touching as I gleave

excitement, so how well I was doing.

Excellent, excellent.

And what's been joyful for me is the Happy Check survey at Happy, because

we've, uh, carried this out for 27 years and this was the highest score ever.

the previous best was August, 2001, but we beat that.

what?

What schools, Henry, do you know for it?

the overall score was 86.7%, but remember that we don't just go

for good and excellent, we go for fantastic as the, as the highest score.

because we do have fantastic people at Happy,

We do Indeed.

Absolutely.

And uh, one of the key, I think one of the key elements is,

has been the four day week.

because there were a lot of people that commented on that, cuz we've

done the four day week for a full year, and people are, are really,

are really enjoying it, aren't they?

Well, it's, that's amazing how quickly time goes.

Absolutely.

And they've, of course, point of the four day week is 180, a hundred, isn't it?

Um, which is you get a hundred percent of the salary for 80% of the hours as long as

you are a hundred percent as productive.

Shall just tell you some of the comments that people made about the four day?

The best bit is having a day to do things for me, like activities,

life admin, and just chill time.

I have never felt so consistently fresh and full of energy starting the week.

Also the freedom it gives me, both in terms of structuring my day and working

times, but also getting chores Owens done and without impacting the ability

to switch off and enjoy the weekend.

Or someone just wanted, just have I have more time with my

Oh, lovely.

That's what joy looks like.

Yes.

Anyway, what been happy for you?

Okay, so, um, oh yeah, just to share a thought or, um, an idea.

And I was just thinking, um, about dreams, things that I would like to do

and what the workplace allows me to do.

Um, and that is fulfilling my personal development.

And one of the things, it's just to share one of the things that we do at Happy

and, um, other, other organizations do similar things, but at Happy we pro, um,

we're given developments, money, you know.

So we're given money so that we can choose what it is that we wanna do with it.

And I have decided that I want to read more.

So I am going to, you know, take a me a membership, Audible books.

But the thing about it is, it's like how do organizations help

people develop themselves in areas that they want to be developed?

And it doesn't necessarily have to be connected to their job,

their role, or the organization.

Exactly.

Exactly.

So which Audible books are you going to buy?

I don't know.

The choice.

choice, that's the thing, the choice.

So I'm gonna be smart about it.

I'm gonna have something, one that is relaxing and then one that's around, I

have a confidence building and so on.

Cause I'm, I'm really keen about that

Okay, well, we'll hear from you later about those.

So now over to Matt Perez.

Hi Matt.

It's so great to have you here on the podcast.

So we'd like to get to know you more about you.

So can you tell us more about you, about the business that you're in?

About Nearsoft?

sure.

So, uh, I'm an old man.

I'm, uh,

No.

ancient.

And um, but in 2007 When I was 55, I started a company called

Nearsoft, and then soon thereafter I found, oh, we found each other.

My partner and I found each other.

He had a small company in Mexico.

I had a smaller company here in the US and we merged in 2007.

And the company was co-managed from day one.

Meaning there was no bosses, there was no hierarchy, none of that stuff.

And it grew to about 300 people.

When in 2017 we sold it to another company, which eventually became Encora.

The whole premise of the company was, okay, India's way over there

on the other side of the world.

People literally get up when we go to sleep and we get up when we go to sleep.

Wouldn't it be better to have developers here in the same time zone?

Nearsoft was a, a co-managing organization.

What, what does co-managing mean?

So co co-management, uh, more popularly known as, uh, self-management.

And the, and the main thing is that there's no.

There's no hierarchy.

There's nobody on top and nobody in the bottom.

that's so fascinating because as you said, right at the beginning, at the start

of the business, there were no bosses.

So normally, I mean, at the moment we are talking about self-management, but

people are coming from management to self-management and you started with

that, no hierarchy from the beginnings.

So what was the thought process?

How did that come about?

So first of all, the difference between co-management and self-management is

that, we realize that there's no self, the company doesn't manage itself, The company

doesn't exist without the people in it.

So what do we do?

Oh, right now we're co-managing the space, You're not my boss.

I'm not your boss.

And that kind of thing.

We're co-managing the space.

When she talks, I shut up and when I talk, shut up and, and like that.

And we both all stop.

You ask a question to motivate the thing.

I have worked in corporate all my life, and I knew the game of, you know,

getting ahead and pushing the other guys to the side and all this stuff,

but I knew how, useless that was and how, how, um, it just, it barely worked.

And so I didn't want titles.

I, I didn't, I was at 55, I guess I was old enough that I retired titles.

And um, my partner said it's a thing, uh, significant thing, thing.

He said, um, I wanted to build a company that works for everybody.

And I said, that's it, that's what we want to also.

And so we started with that approach.

But, you know, we were like blind boing in the dark.

And then my son, uh, my oldest son read a book by Ricardo Semler.

Oh, yes,

That's one of Henry's favorites.

And he said, you gotta read this.

And I said, yeah, yeah.

I said, no, you gotta read this.

Okay.

And I started reading it and reading it and reading it.

And I read it from beginning to end, but about 10 pages

into it, it didn't take long.

I told my partner, you gotta read this.

But he read it in one city.

And next day he, he sides bloated and all this stuff.

And he said, wow, that's, that was different.

That was really different.

And for listeners, that book is Maverick by Ricardo Semler, and I'd say it's

the best business book ever written apart, apart from Matt's and mine.

So do you still implement those learnings in the business today?

Is there anything like

okay.

I'm make a distinction between business and company.

and company.

Okay.

So a business is an organization with one metric, money, So if you make more money,

you're ex exciting growing business.

If you make less money, you're a bum.

Company comes from the Latin co pain, pain being bread and co meeting together.

And um, these are people who broke bread together.

but I thought that company spoke more to what I wanted to say, which was people

working together, coal management, coal company com, stuff like that.

So, to answer your question, we did apply to the business.

This gave more of a, a structure.

Some things we didn't do, we didn't follow the, um, the thing we did about salaries.

That was a big mistake, but we didn't do it.

but most everything else we did.

The infant vacations, which in Mexico you have to have two weeks vacation if you

have certain seniority and three weeks vacation, if you have certain seniority.

but the whole idea is that people could take time off and they

would know when to take them off.

And, um, I mean, people went to work from their houses or went to work

from their, their parents' houses.

Mexico's more of a family oriented thing and the kids live with their

parents until they get married and so they're very attached to

their families and their cousins and their friends and stuff like that.

And we figured people would know better than anybody who were to

go work, rather than us saying.

Having said that, we had a very nice office just south of, uh, Arizona.

and so, One of the things that we did there is we had a kitchen.

And my partner did that in the zone.

I, I was very fast from the building and um, he said, no, that way you have

to go down and do things together.

And I thought that was brilliant.

And again, in Mexico is, is very common to make food for one another.

So people bring all the groceries and cooked there.

And anybody will come in and and go, Hey, you want some tamales or whatever?

Yeah, yeah, yeah.

I'll have some, well, there's a little bit left and a little bit of this and a

little bit of that, and they feed you.

And that was very good at, at getting people that normally wouldn't talk or, or

get together whatever, to come together.

And, uh, we have lots of marriages and, people dating and, and stuff like that.

So tell us about some of the details.

So you didn't have bosses, but you had leadership teams.

No leadership team is, basically, uh, I wanna change something.

I noticed that there are three glasses broken in the door.

And again, the heat does funny things with glass.

And it hasn't been fixed for a week, and I'm I want it fixed.

So I announced in, in over email that I'm gonna start a

leadership team to fix the windows.

And people respond and say, yeah, I wanna be part of that, or whatever.

Another one that we had that was very significant is we had, money

distribution at the end of the year.

So we took a certain percentage to next year, and that was, that

was the decision that we make.

my partner and I.

But the rest was the dispute.

And my partner had a very, Complex formula is that, that's a kind way word to say.

And it got to the point where nobody understood it.

Then this guy announced to the world that he, he wanted to understand the formula.

And, uh, he announced it to a world.

And he shows up, I think about nine people in the end.

So from that point on, it's a group thing.

And so they first came to me.

He said, Hey, what do you think if we do that?

And, and the thing that I learned by then was to ask, Are you asking for permission

or are you asking for an opinion?

If you asking for permission, the, the word is not, no, you can't do it.

Whatever it is, you can't do it.

Now, if you're asking for my opinion, I think you should talk to the

people that get affected by this,

Eventually they came up with something that people could understand.

A few people didn't buy into it.

but again, it's consent, it's not consensus.

We don't all have to agree.

We have to agree at least to try it out and live with it.

So how do you get to that point?

Because if you have a few people who disagree, how do you get to that

point to know what you're gonna do?

What is the

So, so the whole process is facing this, your mouth and your ears.

You have a conversation with her and you explain what you're gonna do.

And they say no, because my mother and my dog and my sister, you

know, they get their anxieties up.

And then they say No, because I, I spent six years in school and

you didn't, and blah, blah, blah.

Okay.

So can you live with it where we're gonna do it?

Yeah.

So anybody can stand up and say, I want to create a leadership team?

Anybody can, identify a problem and answer an email, I'm gonna solve it.

The, the usual thing is, the way this guy did it was, I don't understand the whole

bonus thing, and I want to understand it.

And then people said, oh, I want to, I don't understand it either.

I want to join you on it.

And it was too many people.

It was a bunch of people.

So that tells you that the problem was widespread.

It wasn't one or two, people that weren't, unhappy.

It was widespread.

But he couldn't handle everybody.

So he came to me and said How many people should I have?

I go are you asking for permission or asking for my opinion?

And they said, look, I don't know how to handle more 60 people.

But whatever worked for you.

So he ended up with nine and that was it.

From that point on, he's not the leader, he's not the boss.

He's the guy that brought everybody together.

And people voice their opinions and they come with with ideas.

And so they came up with these solutions.

and eventually one of the guys told me afterwards.

Yeah.

The simpler we made it, the easier it got.

And it came very with a very simple solution, divide by n.

So it's just a hundred dollars and a hundred people.

Everybody gets a dollar.

That's it.

As simple as it gets.

Now, money, money's the funny thing and, and people have with it and

stuff like that, but most people would say, yeah, we can live with

that for a couple years, because it was so simple, you could trust it.

So that's the most significant, decision that was made.

But there were many others, and I mean, from trivial to the very soic,

you know, everything in between.

At one point they wanted to, um, bring in new games into, we have a game room

in one of the buildings and they wanted, uh, new games and stuff like that.

And, and there was a big argument.

And, and, and so they formed in the game room, they form a game

Leadership team.

Oh.

And, uh, and somebody el not me, somebody else said, oh, you have to announce that.

Oh, nobody cares.

You have to announce that.

And so they announced that.

Nobody care.

And that's what they made the decision by talking.

And, and you get to talk and you get to say your, bring

your demons out, so to speak.

And it's very important to people.

And normally we react to the demons and we learn to not react to the demons.

That, that's the nice thing about a smaller team.

It's very hard to call somebody an idiot when he sitting across from you.

So, so if you don't have bosses, your co-managing workspace, how

do you deal with poor performance?

I don't the team does.

So, we do programming mostly.

And, um, if somebody's not doing check-ins, which is the way that you track

what people are doing or, doing too many check-ins, you have a conversation with

'em, and if they refuse to talk or, you know, they, they're just not part of the

team or whatever, then not necessarily the whole team, but some of the people

on the team have a conversation with 'em.

Hey, what's wrong with you?

How come you're doing so many?

And oftentimes people are scared to ask.

We, both him and I are very good at saying, well, I don't know that.

How do you do it?

How, how does that work?

How does that, and that's kind of pervaded their organizations,

you know, where you can say it.

And, people ask all kinds of questions in Slack and stuff like that.

But some people, particularly coming from the outside, are

afraid of asking questions.

And sometimes that that conversation, starts to break that.

You know, they, they latch onto one or two and, but it starts to

break that process of being afraid.

And that's a question, you know, and, we can solve the problem

before you have to, check it in, you know, a hundred times or whatever.

if on the other hand, okay, I'll give you a case.

There was a case of a guy early on before, we had a lot of things in place

that very much believed in a company and Microsoft shall remain nameless here.

And, uh, if, if it wasn't Microsoft, it was gross.

The first thing got together, talk to him.

And initially he said, you know what?

We don't want you on the team.

And he was out of the scene.

Now he's stayed in the company, and another team took him on and, uh, I

grumbled and, and, but it doesn't matter.

Another team took him on.

And, and about a mo a couple of months later he was out.

And then a third person took him on as an assistant or something

because he was a smart guy.

He was a very smart guy and very good at solving problems.

But didn't, he couldn't handle.

At one point he said, no, you gotta leave.

And he told him, you gotta leave the company.

So it is not the I fire you and you're gone and you get your siren, off you go.

It's a slower process, but I, I think it's a more fair process because

not only, If he fails three times to join the team, he's gotta realize

whether he realize or not he's failing at join the team, not the smarts.

He is joining the team.

But not only that, the group learns, here's an example of

somebody who can't join the team.

Because it is gotta be a learning thing for both parties.

And so, that was, that was one case.

There've been the opposite.

There's been people that were bumped outta one team, taken up by another

team and done very well in there.

I only fired one person early on, And it's because the team didn't

dare tell him and I didn't know how to tell him, to tell him and stuff.

So I became the big man in the middle.

And I walked up with this guy up and down the hallway and when we

came back I told the fine people in front of him, I said, he's out.

In, in Mexico, you have to liquidate people.

Not liquidate people, but

Okay.

You know, you have to give him a month for a year.

It is a severance formula meal.

And we could hardly afford at that time.

And my partner said, no, no, because we can't afford it, I said

we can't afford to keep him here.

The team doesn't wanna, but they don't know how to push him out.

so saying that because everything, and I love the whole concept of, company

people together, everyone making the decisions, you know, and stepping up.

What would be your advice to anybody that wanted to set the same values

that your company has in terms of self-managing and how would you encourage

people to talk more and listen more?

Get started, and you know, you can, there are books that you can read.

There are people you can, uh, contact or whatever, for support.

But the thing is to get started.

If you really believe a happier company and a better company, by bringing

everybody in and giving everybody's opinion, and that was hard, hard for me.

I had been a boss for 30 plus years before that.

So it was very hard not to give orders and say, no.

And somebody would tell me, Hey, you're being an asshole and stuff like that.

So I learned over time to not say no, but say, well, maybe not, but it's still hard.

So If you believe that you can make a better company that way, get started.

You're gonna make mistakes guaranteed.

But get started.

And there's no formula that applies from what we did to

what somebody else would do.

There are guidelines that I can give you, and like I said, Maverick to this day is

a very good book in terms of guidelines.

your, your book is also good, Matt, Radical Companies.

Is, is Matt's book.

And one thing I particularly like about, uh, I love the quote.

Don't let an obsession with arbitrary financial targets

take presence over people's joy.

And not joy, like at least have a party joy.

But, It's the feel good kind of joy is the, is the ability to, to make

your own decisions and stuff like that, is the ability to, to speak to

anybody in the company about anything.

Yeah.

And not being your cuic or you're a cog in the machine.

If you try to get outta there, we hammer you back into it.

No, I, I mean there are people that have been programmers ended

up in people development and people have gravitated to different

places because they've spoken up.

There are people that I bet want to gravitate to other

places and don't dare say it,

So, the system that we live in today, we're fish, fishing, water.

Okay, and we don't see it.

We don't see it.

So we, you know, water?

What the heck is that?

It's, we go up, we go down, we go sideways, we breathe.

Yeah, but that's water.

No, no, no.

don't, don't, don't grab that shit.

No, no.

I, We live in a system like that and we call it fiat.

meaning, because I say so.

Okay.

You guys change processions.

Why?

Because I say so.

And a lot of people try to change aspects of that system.

You know, the, the climate change is one thing.

The, the, the women's thing is another thing.

And you know, it gets better.

It's, there's been progress.

It's not, we're not at the inter 18th century anymore,

but it's still the system.

It's still somebody at top and somebody the bottom.

Very few people at the top, lots of people at the bottom.

Lots of people at the bottom.

So we've gotta come to a close now, but, what I generally ask is your three top

tips for creating a happy workplace.

But I think you've got a different take on that, haven't you?

Yeah.

Happiness to me, like I said, it's not a party and less soul

smile and stuff like that.

It is more of, of having that space to be more yourself and

it's, it's not an infinite space.

It is limited by what the other people, the other people's

spaces and stuff like that.

But when you find an area of common ground between me and, and Maureen

for example, we figure out that if there are differences, we figure out

the differences or commonalities.

And it's a lot easier for people face to face to resolve those issues

and to have that conversation.

Matt, that's been brilliant.

Yeah, it been great.

and as, as we say, his book is Radical Companies, check it out

wherever you find your books.

thank you very much.

Thank you.

When I think about the whole culture of it all, it's about company.

You know, when you made that distinction between business and company, that it's

about everybody, company coming together, the importance that everybody had a

voice, and were part of the company.

Absolutely.

And this whole co-managing thing, um, the idea, as you said, you don't have bosses.

and it sounds like that the decisions are made by the leadership teams.

And that's, and that's the company, that's

That's everybody.

So you can just set step up and say, I want to, you know,

do something about this.

And just

make it happen.

That's it.

Cuz he has no rules, So I'm still getting my head around that.

but the only way to, as he said, to make to see whether it

can work is just by doing it.

Cuz there is no script.

And of course, consent rather than consensus.

Which is, which is a big thing in the self-managing organizations, but, um,

that, that whole idea that you don't need everyone's consensus, you just

need to make sure they give consent.

Yes.

so yeah, Right.

well, first of all, um, he spoke about Ricardo, and I know that you love that

Oh, I do.

I love Maverick.

All right.

So go check out the books, check out our other episodes on, the Happy Manifesto.

And if you wanna leave a comment, please do so on your, whatever you use, Spotify

or whatever podcast platform you use.

Leave a comment, let us know what you think.

And I think, what's the strap line, Henry?

Creating joy at work.