In our quest to discover the characteristics of highly performing organisations and how to unleash human potential, we have travelled to Duisburg in Germany to meet with Alexander Kranki, one of the founders of Krankikom.
Krankikom was founded by Alexander and a group of friends in 1995 and since then has grown into a very successful company, supporting their customers in their digital transformation journeys, producing over 650 Websites, Apps, and software applications along the way. Describing Krankikom as a very successful company is not just a reflection of their growth (in employees, clients and turnover), it’s also a reflection of the high employee engagement they have achieved. Not an unfamiliar story in the world of IT and this age of the digital revolution, so why have we chosen Krankikom for this study?
At a time when many organisations and thought leaders are thinking and talking about moving away from traditional organisational structures and rigid working practices, to introducing flatter, more open structures and flexible working arrangements, Krankikom provides us with a living, breathing example of this “new” approach, as an organisation that has been built and operated with these principles at its heart. Recognising that people are the key ingredient to creating a successful business and that happy people are productive people, Alexander and his friends felt that their new company should be built in a way that would enable them to have fun working together.
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Who is Krankikom? The question is posed and answered on their website as follows:
So, what drove Alexander to take the first step of walking away from his promising career in mechanical engineering, leaving behind the perceived comfort and safety of a large blue-chip organisation, to form his own company in the new and uncertain world of the internet?
The founders of the company all have a background of starting their working lives in big blue-chip companies, huge corporate entities with over 100,000 employees. They found that working for these companies in the late 80’s and early 90’s wasn’t much fun. Alexander (who has a background in mechanical engineering) was designing trains, so working on really “cool stuff”, but although the work itself was motivating, the working environment and atmosphere was the complete opposite – “tons of rules, processes and procedures that mostly got in the way, you found that you shouldn’t talk much to co-workers and if you did that could go against you, a very cold atmosphere, you were in teams but not much teamwork was happening”. Unfortunately, or perhaps fortunately as it turns out, Alexander was not alone and found some friends were themselves in the same situation in the companies they worked for.
So, how could they get themselves out of this situation? The answer was to create their own company, but create a company that not only did cool stuff but where everyone (not just the owners) working there would have fun doing it. The web was in its infancy in Germany, so they saw an opportunity to do something new and interesting, and which would definitely be a lot easier than building trains and with much lower start-up costs! With the aid of an Atari ST computer, a PC and a desk they founded Krankikom.
Alexander strongly believes that work must be enjoyable:
“If you take away childhood and retirement, for about 40 years or so (for every full-time employee) work is the single biggest activity by far. Nobody can just ignore what happensthere. If I don’t enjoy work, I don’t enjoy most of my adult life. I probably won’t enjoy my non-working time either. Whoever suffers most of the day in their job, won’t come home relaxed and happy. Nobody has a switch in their head to go from “work: dull” to “free time: cool” in a moment. We only have one head and we take what’s in there everywhere we go.”
And it’s not only the individual that benefits from an enjoyable working environment;
“If people enjoy work, without unnecessary restrictions and feeling that there is always resistance to everything they are trying to do, working in an amiable atmosphere, then they are more productive, so the business as a whole benefits from an enjoyable work environment as well as the individuals within it.”
Not only did Krankikom’s founders want to create a fun place to work, they also wanted to make sure that the people working at Krankikom can bring work into balance with the rest of their life and can alter that balance at the different stages in life, achieving not just a work life balance, but a whole life balance. For example, when you’re starting out on your career it’s your main priority and you want to focus your energy and time on work; but then there comes a time in your life when your priorities change, perhaps because you have children or there is some project outside of work that you want to devote more time to, so you want to spend less time at work and perhaps go down to 30 or 20 hours per week. So Krankikom allows people to do just that, if a member of the team asks to reduce their hours, for whatever reason, then they are happy to accommodate them.
However there needs to be flexibility in providing a flexible approach – not everyone wants the flexibility, some people want a more structured life, the traditional 9 to 5 where you start at a fixed time, work hard, finish, go home and work ends. Others want to blend work with the rest of their life, perhaps taking a nice long 3-hour lunch and then starting work again in the evening:
“There’s a great deal of variety in what people need to be happy, so we have found that if people have the flexibility to make work fit into their lives and lifestyle, that generates a lot of energy and enthusiasm for their work and they care for the company, its projects and customers, so we give them more freedom and options to work in a way that suits them.”
We asked Alexander if they started with this life balance or did it evolve over time?
There were only a few of them to start with and, as they didn’t have children and other commitments at that time, they were happy to put all their time and energy into getting the company started. However, they knew there would be a time when children or other things would come along that would make them want to change the balance of their working life, so the intention was to work this way from the start, and not just for them, but for everyone working in the company.
“It’s what made us feel like we had no future before, although we were all on good career paths, and on some form of trainee business leader programme, and that we would make it to some higher level after about 30 years, but doing that and not having any fun along the way didn’t make sense to us.”
What was true for them back then is also true for the Millennials Krankikom are hiring today; Alexander’s experience is that they’re looking at the whole package too, not just pay and career path, “they don’t want to sell the business side of their lives to someone”, which is why Krankikom are heavily investing in the package they provide. However, that investment does pay off and Alexander feels that they do get a lot in return from their employees; not just in the form of effort, but also in terms of the enthusiasm and pride in their work and the company; the level of responsibility they take in delivering for and supporting their customers.
Alexander’s view is that more money is rarely the route to happiness, they could all make more money elsewhere (sometimes twice as much), so he accepts that Krankikom cannot keep people happy with money alone. They also have an unconventional approach to recruitment. In the early years, they had several people who joined on an apprenticeship basis, with many of them not having a formal degree. They felt that an IT degree was often not relevant to the work they were doing as they were exploring new territory and working in areas not covered in the degree courses at the time. They also took on people who had started a degree course in an unrelated subject but had decided to switch to working in IT as that was a lot more fun! To Krankikom the enthusiasm and willingness to learn, combined with ability are more important attributes than formal qualifications.
If formal qualifications are not a requirement, what do they look for in their new recruits?
There are essentially two things that they look for in all recruits, which go beyond technical skills and what’s found in a CV:
CHEMISTRY. Firstly, they need people who will fit in with the rest of the team. Alexander takes the view that you can have excellent qualifications and excel at what you do, but if you don’t get on with others and do not enjoy working as part of a team, then you will not be a good fit for Krankikom – “we want people to work as a team and we find that it works better when we have people in teams, sometimes you have to put people together who are not quite fond of each other, but generally if people like each other it works really well, so we look for people who will fit in”. This approach also has a positive effect on personal and social relationships, for example spawning many friendships that go beyond the work place.
POTENTIAL. With the innovative nature of the work that Krankikom do, they look for the potential in their candidates, so whilst what they know already is important, they want people who want to learn, experiment and rejoice in new things as opposed to people who only specialise in certain technology and will resist new things. In the past, Krankikom have not tested this and recruited people who eventually become unhappy because of their resistance to change. Technology moves on quickly so they need people who want to learn and experiment; “rather than hire people with specific qualifications we look for people who like to experiment and do new stuff, with the fast turnover of technology if you’re not careful after several years people are left behind.”
Alexander believes that if you want people to feel comfortable with change, you also need to ensure that they work in an environment where they can learn and experiment –
“you need a fear free environment, where you won’t get into trouble if you try something new”.
Now that they are over 120, they are considering how they need to shape the company as they continue to grow, to ensure it remains manageable without introducing lots of rules and damaging the culture that is a fundamental element of Krankikom.
Alexander does not believe in formal job descriptions, so Krankikom does not have any. He believes that to manage people effectively and to help them fulfil their potential you need to look at them as an individual rather than constrain them with a formal job description –
“trying to find someone who fits the job description exactly is very hard, so what we try to do in the teams is say who’s good at what and everyone brings a different set of qualities, coding, speaking to customers etc.”.
He believes that it’s essential to know the qualities of your team members and not make someone do something they’re not comfortable with, just because it’s in their job description – “management can only work if you know people”.
You won’t find job titles at Krankikom either, people play different roles and should not be constrained by a label. Alexander’s view is that if you start adding things like “senior” to a role then that will have certain expectations associated with it, which does not fit with the Krankikom’s open culture where everyone can develop based on their strengths and inclinations.
Krankikom is a very attractive environment for people who like to take responsibility and are self- motivated. However, to ensure that people do not join with false expectations, they are very upfront about the culture and structure of the company in interviews. Whilst the lack of fixed work times is very attractive, they want people to think about what that means – it requires motivation and responsibility and people need to want that responsibility.
The conversation moves to the delicate subject of gender. What is the gender split in Krankikom and is the flexible approach something that has helped to even the difference?
Overall there is a 60/40 split (male/female), however if you look at the professions within the company the ratio varies, as illustrated by the following examples:
- IT administrators – 100% male
- Developers – 90% male
- Project Managers – 75% female
- Designers and user experience experts – 80% female
- The content team is currently over 90% female
Although they consider every female applicant, when only 10% of IT students in Germany are female the number of potential candidates is limited. Alexander agrees that the flexible working arrangements at Krankikom have helped them to attract and retain more female candidates, although a lot of male candidates are also attracted by the flexibility. Unfortunately, they are very unlikely to achieve a 50/50 split with the developer teams as the numbers just aren’t available.
Although the gender split is improving; when Alexander was studying mechanical engineering only 1% of the students were female and now it’s 10%, however it has taken 30 years to reach that level, so there is still a long way to go.
Krankikom are also very proud of the diverse range of nationalities working for the company, and Alexander feels they benefit from the different perspectives that brings. Given that even Google struggle with diversity in some areas of their organisation, with 90% of their innovation team being white males, Krankikom should be proud of the diverse nature of their company.
At Krankikom everyone has a salary package that is based on a 40-hour week and even that package is flexible and “paid” in whatever way suits the individual, for example it could be just money, or it could be in the form of a car and less money, or increased pension contributions, or additional leave. Essentially, the package has a value and it can be paid however the individual wants (as long as it’s legal of course!). If someone wants to reduce their hours, then the value of the package is reduced accordingly. Although people can reduce hours, Krankikom will not pay for more than 40 hours per week, mainly because they feel the quality of someone’s work diminishes when people work extra hours and it’s not healthy for the individual. There are times when people need to work extra hours to fix a problem, however they are expected to take the extra time off later rather than be paid for it. This flexible approach and ability for people to vary their hours at different stages in their lives has been a tremendous help in building and retaining a diverse workforce, where people feel that they don’t have to leave because they want to have children.
Krankikom also feel responsibility for people’s welfare and wellbeing, so they will always try to help if someone is regularly calling in sick. People are not legally obliged to tell their employer what’s wrong, so Krankikom have a contract with a consultancy that provide free and confidential advice and guidance on a whole range of subjects to Krankikom’s employees. The service is also available to managers to provide them with guidance on how to help their team members. The provision of this service has been very well received by the people in the company and is another indication of the care and consideration that Krankikom provide for their employees.
This approach aligns very well with the approach developed by Hintsa performance, which is focused on supporting the 7 elements of a person’s wellbeing, and by supporting those elements you will see improvements in performance and productivity, which is also focused on achieving work life balance. Krankikom seem to have been doing a lot of this instinctively. You can see elements of this in the provision of things like the helpline service and the level of responsibility to the individual and their wellbeing, all of which leads to the employee feeling that the company does care for them, which engenders loyalty and dedication in return.
Whilst Krankikom cannot prevent problems in people’s private lives, they can provide help and support. When someone is having problems and they receive help from the company, other people see that and know that the company will be there for them too, which helps to take some of the worry out of people’s lives and allows them to concentrate. We come back to the fear free environment again, if you feel safe and comfortable then you will be in the right frame of mind to be innovative and experiment.
Which brings us to the subject of innovation.
Alexander’s view is that generally innovation doesn’t happen by accident, you can manufacture innovation if you have the right environment, although it cannot be forced, but you do need a framework that enables and supports the process,
“Innovation starts with a good idea and you need to make sure that any obstacles that will get in the way of that idea being developed and stifling innovation are removed”.
What is innovation?
“Some people might see it as using a new framework for their programming, but that’s not innovation, particularly if it’s not delivering any benefit to the user – you need to get their perspective, looking at what’s going to help them and improve their lives.”
Of the 120 people in Krankikom, Alexander feels that around 25% of them have the mindset and drive for innovation, to spot opportunities and be proactive; there’s another 50% who see the innovation and are happy to go along with it; and then there is the remaining 25% who resist the change and can actually find it offensive that the software or tools they love are changing.
For the people who resist change there is still a place for them at Krankikom, and they will always try to find a role that suits them. It’s about finding a place for people and with the wide range of things that need to be done on an IT project that shouldn’t be a problem!
Can Krankikom’s approach survive growth – is there a point when it becomes unmanageable?
As we conclude our discussion on developing people the subject we come back to is the challenge of scalability as the company continues to grow.
The approach has been followed as the business has grown, although it has and still needs to be refined. Scaling is the next big challenge in the company’s evolution, so far it has scaled successfully as they have grown to over 100, but will it still work when there’s a 1000 of them? Although there is plenty of time to consider this challenge, Alexander has already given it some thought and anticipates that they will move to a model where there are independent units within the company to ensure that the close connections within the teams and with management remain and support the flexible approach to work and life at Krankikom.
LESSONS FROM THE KRANKIKOM KITCHEN
So, what’s our take-away from the Krankikom kitchen? Alexander and his colleagues have certainly found the right ingredients to create a successful company that is a fun place to work and encourages innovation as well as personal growth. If you are thinking about trying the recipe for yourself, then the key ingredients are:
- Flexibility – in all areas
- Trust and a fear free environment
- Open and honest communication
- Welcoming and friendly working environment
- And make it as much fun as you can!
The recipe may not cater for everyone’s tastes and it will be interesting to see how far it can be stretched and adapted as the company grows. However, it has served them very well so far and I think everyone who works for the company will not want to change the fundamental ingredients as it grows, as that will destroy the heart of the company.
Changing an existing company to this style of management and structure would be challenging and require real desire and commitment from all concerned. But if you’re not having fun at work, wouldn’t it be worth experimenting a little with some of the ingredients and having at least a little taste?
- What does an enjoyable and flexible working environment look like for your organisation? Make a step change or indeed iterate to build a great working environment.
- Doing more to cater for employee welfare and wellbeing is the right thing to do and ultimately pays dividends.
- Recognise the fact there is strength in diversity, actively nurture it and capitalise on it.
The authors are Mike Page and Nick Russell.
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Read the previous article in Visions 2020 series:
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