Bettermeans

Open Enterprise Governance Model

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941 Warfield Ave.
Oakland, CA 94610
www.bettermeans.com
1 OVERVIEW
An Open Enterprise is a meritocratic community-based organization. Every aspect of the Open
Enterprise is governed by an opt-in engagement model: Anyone with an interest in its work can join the
community, contribute to the enterprise and participate in the decision making process. Decisions and
control are shared based on contribution and peer-review. This document describes how that
participation takes place and how to set about earning merit within the community.

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2 ROLES AND RESPONSIBILITIES
2.1 Users
Anyone who is a stakeholder in an enterprise is a user. This includes (but is not limited to): customers,
investors, neighbors, and anyone in the enterprise's community. Anyone can be a user; there are no
special requirements.
Users are welcome to participate in an Open Enterprise as much as possible.
User contributions help ensure that the enterprise succeeds in accomplishing its mission while
remaining true to its values.

Common user contributions include (but are not limited to):

• evangelizing about the enterprise (e.g. a link on a website and word-of-mouth

awareness raising)
• providing feedback : informing the organization of strengths and weaknesses from a new
user perspective, and keeping the Open Enterprise accountable to its mission and
values
• providing moral support (a 'thank you' goes a long way)
• supporting other users
• adding new ideas to Workstreams
• participating in the discussion: commenting on Work Items, and in the forums
• starting or joining Work Items

Users engage with the enterprise through the Workstream dashboards. They can start (or join) any
open Work Item.

In addition to starting and joining Work Items, users can use the dashboard to vote in the following
ways:

• prioritizing existing Work Items

• voting on new ideas (agree/disagree)
• estimating the effort for suggested Work Items
• accepting completed Work Items (accept/reject)

All these votes are non-binding (see below)

Users who continue to engage with the enterprise and its community will often become more and more
involved. Such users may find themselves becoming Contributors. Once a user has worked on a Work
Item that has been completed and accepted by the community, they are automatically considered a
Contributor.

2.2 Contributors
Contributors are users who have completed work in an enterprise. Any user can become a Contributor;
there is no expectation of commitment to the enterprise, no specific skill requirements and no selection
process.

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Contributors are eligible to be nominated for Membership:

As Contributors gain experience and familiarity with the enterprise, their profile within, and commitment
to, the community will increase. At some stage, they may find themselves being nominated for
Membership, as described in the next section.

2.3 Members
Members are Contributors who have shown that they are committed to the continued development of
the enterprise through ongoing engagement with the enterprise and its community.

Any Contributor can become a Member; there are no special requirements, other than to have shown a
willingness and ability to participate in the enterprise as a team player. Typically, a potential Member
will need to show that they have an understanding of the enterprise, its objectives and its strategy. Most
importantly, they need to demonstrate that they are aligned with the enterprise's core principles and
values. They will also have provided valuable contributions to the enterprise over a period of time.

A Contributor can be nominated for Membership by any existing Member. Once they have been
nominated, there will be a vote by the Core Team (see below). Once the vote has been held, the
aggregated voting results are published on the public forum.

Nominees may decline their appointment as a Member. However, this is unusual, as the enterprise
does not expect any specific time or resource commitment from its Members. The intention behind the
role of Member is to allow people to contribute to the enterprise more easily, not to tie them in to the
enterprise in any formal way.

By the time a Contributor is invited to become a Member, they will have been guided through the use of
the enterprise's various tools as a user and then as a Contributor.

In addition to their actions as Contributors, Members will also find themselves doing one or more of the
following:

• nominating Contributors for Membership

• voting on Core Team Membership (see below)

Also Members' votes are binding.

It is important to recognize that Membership is a privilege, not a right. That privilege must be earned
and once earned it can be removed by the Core Team (see next section) in extreme circumstances.
However, under normal circumstances Membership exists for as long as the Member wishes to
continue engaging with the enterprise.

A Member who shows an above-average level of contribution to the enterprise, particularly with respect
to its strategic direction and long-term health, may be nominated to become a Member of the Core
Team. This role is described in the next section.

2.4 Core Team

The Core Team consists of those individuals identified as 'enterprise representatives'. The Core Team
has additional responsibilities over and above those of a Member. These responsibilities ensure the

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smooth running of the enterprise. Core Team Members are expected to participate in strategic
planning, approve changes to the governance model, and formally represent the enterprise to the
outside world. First and foremost, they are the guardians and keepers of the enterprise's principles and
values, and are accountable to all stakeholders.

Core Team Members do not have significant authority over other Members of the community, although
it is the Core Team that votes new Members in. In addition to their actions as Members, Core Team
Members will also find themselves doing one or more of the following:

• voting on nominated Members

• voting on changes to the governance model
• nominating Members to the Core Team

Membership of the Core Team is by invitation from the existing Core Team Members. A nomination will
result in discussion and then a vote by existing Members of the enterprise. Core Team Membership
votes are subject to consensus approval (see below) of enterprise Members.

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3 DECISION MAKING PROCESS
Decisions about the future of the enterprise are made through discussion by the entire community, from
the newest user to the most experienced Core Team Member. All non-sensitive project management
discussion takes place in public Workstream dashboards and forums. Occasionally, sensitive
discussion occurs in a private Workstream.

In order to ensure that the enterprise is not bogged down by endless discussion and continual voting,
the enterprise operates a policy of lazy majority. This allows the majority of decisions to be made
without resorting to a formal vote, and keeps the work agile and red-tape free.

3.1 The Process

Decision making typically involves the following steps:

1. Proposal

2. Discussion

3. Vote

4. Decision

Anyone can make a proposal for consideration by the community. In order to initiate a discussion about
a new idea, they should add the idea to the appropriate Workstream dashboard or forum (work-item
ideas go in the dashboard, big-picture strategy is discussed in the forums). This will prompt a review
and discussion of the idea. The goal of this review and discussion is to gain approval for the
contribution.

The Dashboard and the mechanism of Motions allow for work-items and ideas to be voted upon by the
community. However different level of voting and approval are needed depending on the situation. In
general, as long as nobody explicitly opposes a proposal, it is recognized as having the support of the
community. This is called lazy majority - that is, those who have not stated their opinion explicitly have
implicitly agreed to the implementation of the proposal, and those that showed up to vote determine the
direction of the work.

3.2 Lazy majority

Lazy majority is a very important concept within the project. It is this process that allows a large group
of people to efficiently reach consensus, as someone with nothing to add to a proposal need not spend
time stating their position, and others need not spend time reviewing it. This section describes how a
vote is conducted. Section 3.4 discusses when a vote is needed.

For lazy majority to be effective, it is necessary to allow at least 72 hours before assuming that there
are no objections to the proposal. This requirement ensures that everyone is given enough time to
read, digest and respond to the proposal. This time period is chosen so as to be as inclusive as
possible of all participants, regardless of their location and time commitments.

If a formal vote on a proposal is called, all users may express an opinion and vote.

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There are 4 types of votes:

• 'agree': agrees that the action should move forward

• 'disagree': disagree but will not oppose the action's going forward
• 'block': opposes the action's going forward and must propose an alternative action to
address the issue (or a justification for not addressing the issue)
• 'neutral': indicates that attention has been given to the action but abstaining from voting
one way or another

Another way to abstain from the vote is for participants to simply not participate. However, it is more
helpful to cast a 'neutral' vote to abstain, since this allows the team to gauge the general feeling of the
community if the proposal should be controversial.

The entire community, from interested user to the most active Core Team Member, has a vote. The
enterprise encourages everyone to express their opinions in all discussion and all votes. However, only
Members of the enterprise (as defined above) and/or Core Team Members have binding votes for the
purposes of decision making. It is therefore their responsibility to ensure that the opinions of the entire
community are considered. While only Members and Core Team Members have a binding vote, a well-
justified 'block' from a non-Member must be considered by the community, and if appropriate,
supported by a binding 'block'.

A 'block', when cast by a Member or Core Team Member, essentially becomes a 'veto'.

When a vote receives a 'block', it is the responsibility of the community as a whole to address the
objection. Such discussion will continue until the objection is either rescinded, overruled (in the case of
a non-binding block) or the proposal itself is altered in order to achieve consensus (possibly by
withdrawing it altogether). In the rare circumstance that consensus cannot be achieved, the Core Team
will decide the forward course of action.

In summary:

• Those who don't agree with the proposal and feel it would be detrimental to the
enterprise if pursued should vote 'block'. However, they will be expected to submit and
defend a counter-proposal.
• Those who don't agree, don't find it detrimental, and don't have a better idea should vote
'disagree'.
• Those who agree should vote 'agree'.
• Those who do not care either way or who find themselves on the fence should vote
'neutral'.

3.3 Type of approval

Different actions require different types of approval, ranging from lazy majority to a majority decision by
the Core Team. These are summarized below. The next section describes which type of approval
should be used in common situations.

1. Lazy majority: 72 hours

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A lazy majority vote requires more binding 'agree' votes than binding 'disagree' votes and no vetoes
(binding 'block' votes). Once 72 hours have passed, the decision moves in the direction of the majority.
Naturally if an actual majority of Members vote before the 72 hours are up, the decision moves in that
direction immediately.

Sometimes a lazy majority is tied with a vote threshold. This allows for decisions to be made quicker
than 72 hours if enough Members vote. If the vote threshold is reached before the 72 hours are up, the
decision moves in the direction of the majority.

2. Unanimous consensus: 120 hours

All of the binding votes that are cast are to be 'agree' and there can be no 'disagree' votes or vetoes
(binding 'block' votes)

3. Credit majority
Some strategic actions are decided by giving each credit-holder 1 vote per credit; Such actions typically
affect the foundation of the project (e.g. adopting a new governance model)

3.4 When is a vote required?

Every effort is made to allow the majority of decisions to be taken through lazy consensus. That is,
simply stating one's intentions is assumed to be enough to proceed, unless an objection is raised.
Activities that require more control are taken through lazy majority, which is still informal enough for
team to stay agile.

However, some activities require a more formal approval process in order to ensure the health and
cohesiveness of the enterprise.

This section identifies which type of vote should be called when:

• Work Item moving to open queue and Work Item acceptance is dependent on the
estimated value of that item:
o 0-1 points: Lazy majority of all Members, vote threshold: 1
o 2-4 points: Lazy majority of all Members, vote threshold: 2
o 5-6 points: Lazy majority of all Members, vote threshold: 3
• New Workstream: Lazy majority of all Members
• New Member: Unanimous consensus of Core Team
• Member removal: Unanimous consensus of Core Team
• New Core Team Member: Unanimous consensus of Members
• Core Team Member removal: Unanimous consensus of Members
• Governance model change: Credit majority
• Legal structure changes: Credit majority

Anomaly: Estimation is done by lazy averaging: Any Member can estimate a Work Item that is new or
open. Estimation is closed once the item is in progress.

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4 CREDITS: CONTRIBUTION TRACKING
Credits offer an exciting new way of tracking contribution that can be utilized as a compensation system
or merely a contribution tracking system. The Credits module is an OPTIONAL module of the
Bettermeans platform, however we believe it is a central and important module to the Open Enterprise
Governance Model. Throughout this section, we will describe this system with the assumption that it is
being used as the form of compensation for work, however know that in application is can be used
however the team chooses to.

4.1 Credits
Credits are the measurement by which contribution is tracked. A Credit typically means $1 in
compensation. Therefore if an item is estimated at 100 credits, and a person completes the work and is
attributed 100% of the contribution, than that person earns 100 credits and thus is owed $100 for work
completed.

4.2 Estimation
Each Work Item in an Open Enterprise is estimated independently, in terms of how many credits will be
awarded for its completion. Any member is free to give an estimate of how much should be given for
any open Work Item, and their estimation will affect the average estimate of that item. And once work
starts on a Work Item and it is being executed, its estimation can no longer be changed. Only the
estimates of Members and Core Team Members are counted as binding and affect the final average.
Contributors and Users’ estimates are shown and are non-binding and should be considered by
Members if they believe that the non-binding vote is based on better knowledge or expertise of the
value of that work item.

4.3 Retrospectives
In order to ensure that all Contributors to a Workstream get adequately compensated for their work,
and that compensation be as fair as possible, the compensation system in an Open Enterprise is based
on several tenants:

• There are no fixed salaries in an Open Enterprise

• Participants are compensated based on Work Items completed, not time spent - This is
to provide everyone the freedom to contribute as much or as little as they choose, and
for the Enterprise to be billed fairly.
• Contribution is assessed by one's peers, seeing as coworkers and co-team members
are the most likely to know how valuable someone's contributions were - This is to
provide the most fair assessment of one's contribution, using the wisdom of the crowd in
assessing work done.
• Peer assessment is compared with self-assessment - This is to provide an opportunity
for each participant to self-reflect and learn about their assessment of their own work, as
well as an indicator to all users of each participant's self-assessment abilities.

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This system of compensation is executed using the Retrospective, which occurs once a number of
Work Items worth a certain amount of credits are completed and accepted in any given Workstream.

During the Retrospective, each person who has contributed any amount of work to any of the Work
Items involved is asked to assess their own percentage contribution to the completion of these items,
as well as every other participant's. Once all participants have stated their opinion, each one receives
the average of their team's assessment of their work. That figure is also compared with their own
assessment of themselves, which affects their self-assessment reputation.

The percentage each participant receives is then applied to the total amount of credits associated with
the retrospective and these credits are distributed accordingly.

4.4 Credits Queue

Once Credits have been awarded, they are tracked in the Credits Queue. This Queue demonstrates all
the credits ever awarded, and in addition it demonstrates which Credits are active. When an individual
decides to retire their credits, meaning that they have been paid or they are trading in their credits, they
are able to do this from the Credits Queue. The Credits Queue is a way for people to see who has
completed what and how and when people have been compensated for their contribution.

4.5 Volunteer Credits

In addition, any workstream can be declared as a volunteer workstream. In this system, item are still
tracked and estimated with retrospectives to distribute credits. However all credits earned are volunteer
credits and are merely a recognition of the hard work that a person has donated to a cause they believe
in. Volunteer Credits give the owner the recognition and decision-making ability of a credit, but have no
monetary value. In addition, the volunteer workstreams are an important signal to participants that their
work will be volunteer in this context.

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5 CONCLUSION
The Open Enterprise governance model comes from the more democratic end of the spectrum of
control. But it is not a democracy, it is a meritocracy. It is a model that passes control on to those who
are most likely to wield it for the benefit of all, rather than a minority interest.

Work organization is (generally) emergent. People emerge to do the work by simply doing it. If they are
helpful, other people begin to trust them. In a healthy enterprise, this trust eventually results in explicit
authority and responsibilities. This is called leadership. In traditional management structures, authority
is granted from the top down regardless of any existing trust or respect. This is what most people would
call a manager. Managers may also be leaders, but this is unfortunately more rare than it should be.

Given the nature of open participation in Open Enterprises, they don't have managers, but they do have
leaders.

There is a big difference between a leadership culture and a management culture. In most
corporations, management = status = power. The people who have the most people working for them
have the loudest voices in the direction of the organization.
In a healthy Open Enterprise, the people who 1) have good ideas or 2) get things done, are the ones
that have the status and power. These are the people who tend to have lots of folks start to willingly
follow them.

First you earn leadership, and then you are allowed to manage.

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