Interview: Mario Kaphan (Founder, Vagas)

Vagas looks like it has found the secret of managing through self-managing teams. You currently have around 150 employees organised in 30 self-managing teams serving more than 3,000 customers and you have had a similar model since you started the company back in 1999. It’s interesting to see how you’ve managed to maintain the entrepreneurial spirit in spite of the growth over the years. How did you manage to do this?

It has everything to do with our horizontal management model. People are free to do what they want but the synthesis of our model is that everyone has everything to do with it. This is the fundamental basis of our model. It means all decisions are consensually made with our 150 employees.

You’ve said ‘Although there are no formal leaders, VAGAS is not a leaderless company’. The hierarchies or decision making seems to be dynamic at Vagas. Would you say that authority shifts based on who has the most knowledge and experience in a specific context?

Yes, but there is absolutely no delegation of power. No one wears the badge of a leader. Leadership is dynamic and it changes every day. The different teams decide who they want to involve in any decisions making process that they are undertaking based on knowledge or experience required. We are always learning – we hack the company permanently.

Since you mentioned ‘Learning’ as a continuous process at Vagas, we know you always look to hire individuals who have something to teach. How does that work in practise for Vagas?

The whole hiring process can take a long time. Candidates are interviewed by several people. Competencies are only one of the aspects that are considered. The cultural fit is equally important. Sometimes that means that what people have to teach us may not be directly related to their technical skills. It may have something to do with their other interests.

We also place a lot of emphasis to discuss the future of work and we look to hire people who have an opinion or a view of what this future will look like for us and how they could help us get there. It is very important for us that someone who wants to join our company has the clarity of ‘what’ and the ‘why’ of our company’s horizontal model. It can sometimes be difficult to function within a horizontal model and for some people it is all they want and for others it is practically impossible to function in this environment. We try hard not to hire the wrong person for which we assess clearly during recruitment.

There is absolutely no delegation of power. No one wears the badge of a leader. Leadership is dynamic and it changes every day.

Teams in Vagas are responsible for hiring, developing and firing. What role does HR have to play at Vagas?

HR has an active role to play. The first phase of the hiring process is quite conventional except for the fact that the respective team which has a vacancy works together with HR during the process. But the whole process of opening a position, attracting people and the first rounds of interviews are all managed by HR.

A healthy amount of controversy seems to be normal and expected in an organisation with zero hierarchy. How do the employees deal with this and how does this affect the relationships at work?

“Controversy” is only the name we have given the main methodology for our horizontal decision making process. For every decision, no matter how big or small, it begins from this point of ‘controversy’ and is lead to consensus.

The process starts by defining a “minimum and appropriate” group (of one or more persons) for the controversy that builds the consensus and publishes it on our intranet, so that anyone who disagrees may bring it back to the controversy phase. This simple process can be more efficient than the vertical process: it may be better because the group is not tied to hierarchy, faster because it does not have to rise to the necessary hierarchical level, and decisions still come with broad engagement.

It sounds like sometimes it may be difficult conversations to be had. How do you prepare or train your employees to have these difficult conversations?

Perhaps it’s more difficult in Brazil than in UK for instance because Brazilians don’t like to confront others. Even so it’s not so complicated. We conduct workshops to help people to learn how to have the pleasure of having these types of conversations. The word ‘Controversy’ really is just the name we gave the process, it really is the process of how we decide. It is important to say that we are absolutely ‘imperfect’, sometimes decisions take a very long time, sometimes they will consume too much energy and people will not be happy. But in a majority of cases we don’t struggle with these problems.

It has more to do with understanding what is being done and being in an environment which is safe. People know that expressing their opinion does not bring any threat to them. When you visit Vagas, you will see that the spirit here is very high because it is made up of a group of people who value freedom and are fully engaged in building a purpose which is meaningful to them. It may sound like a utopia from what I’ve said but this is what objectively happens. We are closer to it than many other companies.

We believe it is not our duty to motivate our employees. We think that is a very paternalistic approach. They should be engaged and self-motivated by our purpose.

Having an engaged workforce is what everyone strives to achieve. How do you encourage your employees to perform when you don’t have pre-determined targets?

Our focus is not to maximise profit or to grow. Our focus is our purpose. Profit and growth comes as a consequence. It all has to do with our values that are alive and are lived and shared by this community of 150 people. Our values are not a list hung on the walls. It’s what gives shape to our decision making. We are horizontal because it is the best environment to live values. So the values are alive for each person making decisions. In a vertically managed company most important decisions are made at the top and that is where the values are lived not with the majority of their employees.

We have found that the main reason for our success is because the market recognises the authentic living values of Vagas. That’s what helped us grow until now. It is so pragmatic – we are horizontal because it is the best environment to live shared values and this is a strong success factor, where success for us is realising our purpose.

In a world where everyone is keen on climbing the corporate ladder, what do you think motivates your employees to stay in a role without any future of linear progression? Do you have a reward and recognition mechanism and how does this work?

We believe it is not our duty to motivate our employees. We think that is a very paternalistic approach. They should be engaged and self-motivated by our purpose. Compensation is not a form of motivation. It is only compensation for their time and effort. We believe that employees need to feel that salaries are internally fair and at least aligned to the market. Today, if someone thinks their salary is not right they will open a controversy which will lead to consensus. Their motivation should come from the fact that they are helping build something relevant with a bunch of likeminded people.

It’s the same for development and professional growth. We don’t determine anything for our employees because we believe it is an individual’s decision about how they want to grow. It isn’t always as simple as that but we are on a journey of constantly learning to improve and better ourselves.