Written by Pim de Morree - September 27, 2016
Next on our Bucket List: music streaming company Spotify. We fly to Stockholm to learn more about the unique culture and way of working of this fast-growing tech start-up.
Founded in 2008 by Daniel Ek and Martin Lorentzon, Spotify rapidly expanded to a company that currently employs 2,600 employees worldwide. We get the unique opportunity to visit the Headquarters in Stockholm to see what it’s like to work for the company that is revolutionizing the music industry.
Upon entering the office, the feeling we get isn’t anything like an everyday office. With fancy coffee corners, ping pong tables, couches, music (of course) and welcoming staff (“You must be the guys from Holland? Welcome to Spotify!) it feels like we are in the right place. But it’s not just this friendly, start-up like environment that sets Spotify apart from other companies.
A world-famous organizational structure
Spotify is known across the globe for its unique organizational structure. So don’t picture hierarchical top-down management structures filled with bureaucracy. Instead, Spotify uses squads, tribes, alliances and guilds to run its business. As you have probably never heard of this before (neither have we), let’s break down how it works and what it’s like to work in a structure like this.
In Stockholm, we talked among others with Andres Ivarsson, writer of the landmark document called Scaling Agile @ Spotify. If you want to dive deeper into Spotify's work structure, this document is a great place to start. In the first part of this blog post on Spotify, we explain the unique organizational structure by combining quotes from their document with quotes from the people we met at Spotify. The quote we liked the most: "This […] is only a snapshot of our current way of working - a journey in progress, not a journey completed."
“The basic unit of a development team at Spotify is called a 'squad'. A squad is similar to a Scrum team, composed of 6 to 12 people and designed to feel like a mini-startup. They sit together, and they have all the skills and tools needed to design, develop, test, and release to production. They are a self-organizing team and decide their own way of working - some use Scrum sprints, some use Kanban, some use a mix of these approaches and some build their own ideal way of working.
"Each squad has a long-term mission and takes responsibility for different parts of the user experience. Because each squad sticks with one mission and one part of the product for a long time, they can really become experts in that area. Most squads have an awesome work space including a desk area, a lounge area, and a personal 'huddle' room. Almost all walls are whiteboards.”
Tribes
“A 'tribe' is a collection of squads that work in related areas - such as the music player, or back-end infrastructure. The tribe can be seen as the 'incubator' for the squad mini-startups, and have a fair degree of freedom and autonomy. Each tribe has a tribe lead who is responsible for providing the best possible habitat for the squads within that tribe. The squads in a tribe are all physically in the same office, normally right next to each other, and the lounge areas nearby promote collaboration between the squads.
"Tribes are designed to be smaller than [150] people or so, with an ideal size of 40. When groups get too big, they start seeing more things like restrictive rules, bureaucracy, politics, extra layers of management, and other waste.”
Multiple tribes form an ‘alliance’. This group of tribes has responsibility for top line metrics.”
Chapters
A 'chapter' is a small family of people having similar skills and working within the same general competency area, within the same tribe. Each chapter meets regularly to discuss their area of expertise and their specific challenges. The chapter lead is a line manager for his chapter members, with all the traditional work responsibilities such as developing people, setting salaries etc. However, the chapter lead is also part of a squad and is involved in the day-to-day work, which helps him stay in touch with reality. Now, reality is always messier than pretty pictures, but the pictures should give you the general idea.”
Guilds
“A 'guild' is a more organic and wide-reaching community of interest, a group of people that want to share knowledge, tools, code, and practices. There are work-related guilds like the Java guild, C++ guild, or Android guild. But also hobby-related guilds like the craft brewery guild and photography guild.
Chapters are always local to a tribe, while a guild usually cuts across the whole organization. A guild often includes all the chapters working in that area and their members, for example, the testing guild includes all the testers in all testing chapters, but anybody who is interested can join any guild.”
No managers?!
There is a common misconception that Spotify doesn't have managers. This is wrong, there are managers in the shape of the line managers that look after people with the same skill set across different squads. However, next to their task as line managers, they are often part-time developers as well, contributing actively to a squad. To us this feels like a huge benefit since in this way your 'manager' is doing the same job as you and therefore fully understands your day-to-day work.
All of the above suggests there is a huge difference in the way of working at Spotify from traditional employers. As Johan Sellgren (HR Business Partner) puts it: "We provide our people with lots of responsibilities and trust. It's okay and safe to fail, but you have to learn from it. If you make the same mistake twice, that might be a potential sign that you're not developing yourself enough. The growth mind-set needs to come from the employees themselves, as in the end we all need to get things done".
Growth mindset
There are, however, guidelines in how Spotify tracks the development of the employees. Johan: "First of all, we don't like heavy tooling so we tend not to use it. There is no performance management or anything similar. Instead, we encourage continuous 1-on-1 coaching sessions where we tell each other the truth about the performance."*
To maintain the growth mindset they encourage regular feedback moments for everyone in the company. Johan: "The majority of the feedback derives from the continuous 1-on-1 sessions. We try to hold individual 'development talks' twice a year where we address the future (70%) the now (20%) and the past (10%). To complement all of this we also have a 'talent snapshot' and a 'salary review' at least once a year."
As you can imagine, the pioneering way of working at Spotify comes along with many challenges. Katarina Berg (Chief HR Officer): “Let’s be clear. Our way of working is unique, but it is definitely not perfect. We make mistakes and we realize that we don’t know the answers to all the questions. As we are growing so quickly, new challenges arise every day. The biggest challenges are to attract the right people and to harness our innovation, agility, and unique culture while welcoming one hundred new employees to the team every month.”
So how does Spotify handle this? What can we learn from the experiences of scaling this unique organizational model? In the second part of this blog post, we’ll come up with answers to these questions. Stay tuned to find out how Spotify fights to maintain its Corporate Rebel status.
EDIT: here's part 2 of our blog post on Spotify.
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Written by Pim de Morree
Written by Pim de Morree
As co-founder of Corporate Rebels I focus on: researching, writing, speaking, and building our company.
