Firm thrives by putting staff in charge
AgBiome upends workplace hierarchy, bringing employees together in ‘ commitment model’
When Eric Ward and Scott Hawkins were preparing to launch their new agricultural biotech start- up back in 2012, they set an ambitious goal: To bring about the next agricultural revolution in everything related to biological pesticides.
After some 30 years of experience in the agriculture industry working for large as well as growth companies, they knew exactly what kind of culture they wanted to avoid — one that involves big egos and star employees. To articulate what they were actually looking for, Scott recalled a 2002 article in the California Management Review about a study that looked at reasons for the success of young start- up companies in Silicon Valley.
In the study, the researchers classified some 200 companies into five categories: companies whose success depends on the exceptional talent of key employees; companies in which employees are challenged by specific tasks they have been assigned to execute; companies with traditional hierarchy, with room for promotion; companies with strong central control and close supervision; and lastly, companies in which employees feel they have a long- term relationship with the organization, as well as identification with its goals.
The research showed that the companies that operated according to the fifth model, known as the “commitment model,” were more likely to survive crises, and ultimately to be financially successful.
The model resonated with Ward and Hawkins, and when they set up AgBiome they created a company without hierarchy, thinking that such a structure would help achieve a model of commitment.
So at AgBiome. no one has a boss. No one reports to anyone. Employees come together to form teams around different projects, and decisions are made on the recommendation of the company’s internal experts. There are no personal bonuses, only a common profit- sharing program, so employees are aligned and don’t compete with one another. Every week, the entire company meets, and employees are updated in full transparency, including on the company’s financials.
“I do not believe in the carrot and stick method,” Hawkins said in a recent lecture to students at the University of Illinois Urbana- Champaign.
“Ultimately, what really motivates people and makes them committed and satisfied is not a monetary reward. Employees want to have a lot of autonomy at work, they want to be able to choose the topics they work on, those they find really interesting,” Hawkins said.
“Second, employees want to become masters of a skill, experts in something. I think everybody should enjoy that type of personal power, when you feel that you are so good at something,” he said.
“The third element in the equation is purpose. If you have a purpose that you’re motivated for, and that aligns with your company’s goals, that’s just wonderful, and it creates a power that you can hardly replicate in any other way. The result of these three factors is a very high degree of autonomy,” Hawkins concluded.
A prerequisite for creating such a culture is to recruit the right people. “We are very careful when recruiting new employees,” said Elizabeth Claypoole, AgBiome’s HR person, in a Zoom interview from the company’s headquarters in North Carolina’s Research Triangle Park.
“We do our best not to recruit people with big egos. It’s just not going to work in a collaborative model like ours. Our recruitment process is long, and all employees are welcomed to participate. We need to make sure that they have both the required technical skill and the willingness to participate in our special culture,” Claypoole said.
Each of the company’s 90 employees is fully responsible for planning how his or her day will look.
“If you’re hiring a bunch of people who are smart and capable and they manage to operate as fully functioning adults outside of work, then why is it that when they come to work, we can’t and shouldn’t expect them to be fully functioning adults as well? It sounds trivial, but most organizations do not do it this way,” Claypoole said.
AgBiome is thriving, but can its model be replicated in other companies that are larger and less research intensive?
“Absolutely,” Claypoole said. “W. L. Gore, which invented Gore- Tex, the technology of waterproof fabrics, is a much larger company with close to 8,000 employees and has a similar culture.” Indeed, Gore appears consistently ( over the past 21 years) on Fortune magazine’s list of “100 Best Companies to Work For” in the U. S.
Another key example in the world of companies operating under alternative models is that of online shoe retailer Zappos. Tony Hsieh, 46, who led Zappos for more than 20 years, died recently in tragic circumstances after being fatally injured in a Thanksgiving Day house fire.
Hsieh believed that to provide a great consumer experience, something amazing must happen among employees as well. He created an intense organizational culture, which can be classified as a “commitment model.”
Similar to W. L. Gore, Zappos was also repeatedly included in Fortune’s list of best companies to work for before it was acquired by Amazon for $ 1.2 billion ( U. S.) in 2009.
Following the acquisition, Amazon gave Hsieh full autonomy in running Zappos, and in 2015 Hsieh took his management style one step further out of the standard operating box by implementing an innovative model called Holacracy.
Holacracy is a self- managed/ selforganized model that uses a set of predefined rules and processes, checks and balances, and guidelines that an organization can use to give every employee ( instead of just management) the power to innovate, make changes and have a voice. The implementation at Zappos had mixed reviews, but according to its website, it is still being used to this date.
While a nonhierarchical model seems brilliant, one question remains: If it is indeed so great, why have so few companies implemented it?
“People just automatically bring with them what they’ve done elsewhere, and most companies follow a traditional hierarchy model,” Claypoole said.
So, if there are no bosses, are Ward and Hawkins joint CEOs, as displayed on the company’s website, or not?
“Well, kind of,” Claypoole said. “We don’t really care about titles, but what we have found over time is that people outside of the company care about titles, so we sometimes need to provide them something familiar, so they won’t be too confused.”
At AgBiome. no one has a boss. Employees come together to form teams around different projects, and decisions are made on the recommendation of internal experts