A Company Culture That Moves At The Pace of AI

Johannes: So I think what happens to software engineering right now is what will happen to all other industries downstream as AI is maturing. This is, I think, the first time that I feel exponentials, like viscerally in my body. There's a lot of intensity in the market right now and a lot of uncertainty. Intensity helps you to not overthink.

Going through that and communicating through that has really, really shaped a lot of our culture. Our job as a company is to go to that drawer, open it and bring clarity into the messiness of that drawer, which is an analogy for like conflict, fear, emotions you're avoiding and so on. You need to get two things right in building a company, which is building great relationships and making great decisions. If you get those two things right, you will be successful.

Joe: Hi everybody, it's Joe Hudson and welcome to The Art of Accomplishment, where we explore living the life you want with enjoyment and ease. And today we have a very special guest. I'll be interviewing Johannes Landgraf, who is the CEO of Ona and formerly GitPod. And he has been a client with me for two and a half, three years, and he's gonna talk about a couple things. One, how the work that we do at AOA, how it works inside of a company and how it's been very effective at having him get from zero to 60, quadruple revenue. But we're also gonna talk about how to create a culture that has to change at the pace of AI, and so we're gonna explore how that happens. And welcome, Johannes. 

Johannes: Thank you. And really great to be here. 

Joe: So, tell me a little bit about, like what the market's doing right now? My experience of it is nobody really understands everything that's happening in ai. Nobody really understands everything that's happening in coding anymore, no matter who you are. And the market is different every six months. 

Johannes: Every week, six months, it would be nice. 

Joe: Right. So, tell me what it's like to be in that market. Tell me what it's like to lead a team That is constantly seeing the rug pulled from underneath them. 

Johannes: Yeah. So I think what happens to software engineering right now is what will happen to all other industries downstream as AI is maturing.

And the main reason is that the frontier labs picked coding as the number one use case. So because of that, I think coding is, like impacted first. Right. By the way, that understanding of that market and also laying that out towards the company really helped rally the whole company behind it because everybody sees the velocity.

Joe: Yeah. 

Johannes: Of change. Now, exponentials are real. So this is, I think, the first time that I feel exponentials, like viscerally in my body. 

Joe: Yeah. 

Johannes: Because every week, you know, there are new models out there. I think like two weeks ago, codex from open AI coding Model GPT five Codex from them grew within a week.

Within a week in terms of use usage three x. Now, literally today as you're recording this episode anthropic release like Claude 4.5, which is again now state of the art in terms of coding. So you have cycles that are happening on an almost like weekly basis right now. And I think, I think a lot, a lot, a lot about that because what it does naturally is there is a certain level of overwhelm, of anxiety, of stress. You know, people in the valley tell you to work now 9, 9, 6. And 9, 9, 6 means working from 9:00 AM to 9:00 PM six days a week. So there's a lot of intensity in the market right now and a lot of uncertainty as well. And I think fundamentally, a couple of the core principles of great decision-making are actually not changing.

I think it's very important both as a culture, but also like for myself, for my own, you know, like sanity and decision-making quality to come back to those things. And that is emotional clarity, like cycling actually very fast through that overwhelm, and also seeing the opportunity in it because intensity helps you to not overthink.

So intensity helps you to keep going, keep evolving, keep doing, and not like, you know, being stuck in something. I remember that, I mean, all the AOA courses in a way are structured like that. When we did the Connection Course the first time with the team, so the leadership team, the main feedback was for people is like that that's too fast. Okay. I want to keep on in that specific conversation. I'm not done yet. And I think you always replied, this is on purpose 'cause we want people to understand that they can move through things and that ultimately emotions can cycle very, very quickly through your system.

Joe: Yeah. 

Johannes: So I think getting to that like emotional clarity and cycling fast through your emotions is becoming a superpower when the rate of change is exponential. 

Joe: Yeah. 

Johannes: And I think that is like what we internally try to always, I mean, of course we're never perfect, I definitely also have fomo, you know, at some days.

If you see the yeah, revenue from Anthropic going, I dunno, to like 5 billion, you know, within a couple of months. But I think it's really understanding, you know, those basics and then playing your own game. Do not play somebody else's game. I think that is so important in the market.

So understand where your strengths, how you fit in, how you also differentiate from both a product perspective and then play towards that. 

Joe: Yeah. So that's your overwhelmed, but you have a team of people. 

Johannes: Mm-hmm. 

Joe: They must get overwhelmed. How do you as a team stop the inefficiency of overwhelm? Or work with the inefficiency of overwhelm?

Johannes: I mean, the thing I recognized is when I'm overwhelmed, the team is overwhelmed. So it always starts with leadership and that applies similarly to my leadership team. So if they're overwhelmed, their team will be overwhelmed as well. And then also the team understands each individually that if they project the overwhelmed towards their team, it impacts that team.

Joe: How do you marry that with transparency? 'Cause if you're actually overwhelmed. 

Johannes: Mm-hmm. 

Joe: Okay. I'm not gonna put it out there, but then I would be non-transparent. Like, how do you marry those things? 

Johannes: Yeah. So over the last months, we've as a leadership team done the experiment with the AOA team to actually be one of The Council groups.

So Council is a program of AOA that is a lot about building high trust relationships within a certain group and learning to embrace also conflict, adding data points, learning and understanding more about yourself ultimately. And that has been extremely helpful, specifically within leadership.

So to the extent that, I mean, we have those monthly sessions where we have a very structured process to bring up those things and talk about them. 

Joe: Yeah. 

Johannes: But we've also taken those concepts and now have started what we call like mini-Councils. So if there's like smaller conflict between, between functions or overwhelm, we set up those mini-Council groups where we like talk about these things and bring them up.

Joe: So one of the things that we do in Council is just really teach people to be in a conversation that's deeply present, that's deeply open, deeply in view, and then give you some tools on how to do that with a group. 

Johannes: Yeah. 

Joe: And so that you can have these very deep and meaningful conversations.

And it's interesting what you're saying because one of the things that I noticed with companies that are constantly in overwhelm is their nervous system never slows down enough. They don't ever slow down enough to speed up. Right? There's that great quote that I always get wrong, but it's from the US Marines and it's slow is steady, steady is fast and like taking that time to slow down and really, especially when it's, when it's like high tension areas or if there's overwhelmed to really slow down, really speeds you up in the long term. And so, I don't have, I have no idea about the mini-Council. So like, like what are you doing there? That sounds really cool. 

Johannes: I mean, it's ultimately, literally using a lot of the same structure and principles. So I mean it starts with projection people like talk about, you know, their triggers, what they are annoyed by, you know, by the other group and bring those things up. 

Joe: Oh, that's cool. So you're basically just bringing those tools into the conflict so that people can get present.

Johannes: Yeah. 

Joe: So that's something that you've just added recently, The Council. That's maybe what, six months old or something like that? And what are you seeing happening there? Like what's that doing for your trust, your transparency, for running into the difficulty? What's it doing for business?

Johannes: As a precursor to that we've been really heavily invested, I think in AOA-type work across the whole company. So people very regularly at the company do the Connection Course. We started three years ago with the Connection Course at leadership. Then we had you at a couple of our leadership offsites work with the team.

So there's a lot of shared vocabulary. I think our operating principles are partially really also shaped by what I learned from AOA. And learned about the mind and human psychology and, and neuroscience. So there is a shared understanding, shared vocabulary that was always kind of there also pre-Council.

There is, you know, our CTO and myself, we did Groundbreakers, so that one-week-long workshop. So there is that shared vocabulary really is there. Now what The Council did is it brought that AOA experience, which a lot I think is very hard to get only by listening to the podcast and I mean, I listened to the whole thing, I think in a week two x two x feed when I first found it. But the real change then comes when you also apply those things in person, right? When you really add the human connection 

Joe: Yeah. 

Johannes: Element to that. And I think that with the first session Council, which was like a weekend in person 

Joe: Yeah. 

Johannes: That was really eye-opening, you know, to a lot of people in leadership that haven't experienced that and how efficient this can be.

Joe: Yeah. 

Johannes: And how similar we all are. Right? 

Joe: Yeah. 

Johannes: And for me, the most beautiful thing about that is if you just look at the verbatim quotes that people said throughout that, you know, weekend, like other people would be like, oh my God, that relationship is broken. 

Joe: Right. 

Johannes: They will never, ever get along with each other, ever. Right? And instead, everybody felt, I dunno, three times more trust. Like a far, far deeper, like depth 

Joe: Yeah. 

Johannes: of relationship and problem-solving than before. So 

Joe: It sounds amazing to watch you all at the end of it, it was,

Johannes: How was it for you, by the way? I mean,

Joe: To be there with you?

Johannes: Yeah seeing the experiment because like, you know, it was.

Joe: Yeah. So a little bit of a, a, a background on this is we started The Council and Johannes was, you know, did the math. And he was like, this, if, if I get my team to do The Council, that'll be cheaper than you doing offsites with us. Can we do this as a team?

And I hadn't even conceived of it as a team thing. And I was a little nervous, but Johannes reminded me of my own principles and, and one of them is everything is an iteration. And so I said, great. It was amazing to watch it, actually. It was the same principle that you were talking about earlier, which is there's a whole bunch of assumptions that you can't move at a certain speed, but if you move at a certain speed with a certain intensity, you can get through a lot of stuff really, really quickly, whether that's in a business or whether that's internally.

And so the thing that I got to see there was you did the same work that these other Councils were, that were groups of leaders who were working with each other, except for you all, work together. So you had this massive history. 

Johannes: Yeah. 

Joe: And you got to see through so much of your own patterns in a way that the folks 

Johannes: Yes.

Joe: It took a lot longer for the folks who, who are, you know, just like getting to know each other and leadership or Councils or friends. But it's like working with together, it's like a, it's such 

Johannes: bring your backpack. 

Joe: Exactly. Yeah. And it was also, what was cool about it was to see that the afterwards is that you're in a community of practice in your business, right?

So everybody in your business is interested in now who's, at least in the management team, is interested in growing as people and becoming better people, and that makes for a better business. 

Johannes: Yes. 

Joe: Because the more competent our people get, the better our business grows. But also it helps you retain people.

That's the other thing that I've been noticing in your company. Love you to talk about it. Like you're in a place where retaining great talent is really, really difficult. In the space of ai, you don't seem to have almost any problem with it. How is that happening? And what are the other benefits of this kind of cohesion? So I work with lot CEOs who are like, I don't, I don't care if my team hugs, I don't care if my team is cohesive as long as they get the job done. And typically what I'll say is, give me a winning NBA team that wasn't cohesive.

Like it's part of being a winning team, at least it gives you an advantage. What are some of the advantages you see in that? 

Johannes: I mean, the first advantage is that that's how I want to live my life. So I'm working like a lot, right? I invest a lot of my lifetime and energy into this, into this company, and I think the shift that happened for me a couple of years ago is really to see building a company as the fastest way to become the best version of yourself. That is not to become, you know, to be on a leaderboard or something. 

Joe: Yeah. 

Johannes: But just to really embark on that journey that ultimately life is about. Right? And if that is true, then of course I want to have the people that I spend a lot, a lot, a lot, a lot of time every single week to think similarly.

Right? So what happened is that a core, one of my goals for people that also leave the company is that they feel that this is, you know, their life's work that they do at Ona. And with that, I mean, one definitely the best work that they've ever done. We want to create an environment where they can, you know, really, really excel at what they're doing.

Joe: Yeah. 

Johannes: But second, that they feel, they understand themselves more, that they're more empowered, that they have more capacity to show up than they had before they joined the company. And I think that is very, very core, both at our operating principles and how we generally build and lead the company.

And that shows people really value that because they understand, look, this is, this is I can grow as a human. Like not only, you know, the revenue side, which is a, which is a function of that. 

Joe: Yeah. 

Johannes: I think almost all of business in a way is also better understanding yourself because that allows you to make higher quality decisions, that allows you to build better relationships with people, higher trust with people, which allows you to do more things. If you do not have trust and need to micromanage everything, you're just also limited, you know, in the amount of things that you can get done. And I think people really feel that. And it's not fake. I think the most feedback we get, usually when people read through operating principles, it's like, huh?

You really thought like about them deeply and throughout the interview process. 'Cause they talk with like our head of people, you know, the function leader and so on at the end with myself, that's the thing that they say that is different. That they feel like we are really authentically living by those principles.

And I think that has been an evolution, you know, it wasn't there immediately, but we are now at a point where I think that culture is very, very ingrained and feels true and right. 

Joe: Yeah. So keeping people advantage, better decisions advantage. 

Johannes: Yeah. 

Joe: Better culture advantage. People are improving, therefore making better decisions, having better relationships, advantage. Any other advantages? 

Johannes: I mean, with loyalty, we spoke about that, but that is implied I think it's just also more enjoyable. Like it's also more enjoyable for people. I mean, I think the main thing is li again, life is short, right? Like if I'm spending and dedicating like, you know, my life to this, it better be something that I enjoy. Right? And I feel alive. I think that is what is very important. I want people to feel alive because also for them, life is too short, right? For candidates as well, things go wrong when either the company doesn't know what they want. 

Joe: Yeah. 

Johannes: Or the candidate doesn't know what they want.

Joe: Yeah. 

Johannes: But if they both know it and then they are able to articulate it in our best approximation for that is in our operating principles. 

Joe: Yeah. 

Johannes: Which we can give to candidates and be like, yo, do you like that or not? 

Joe: Yeah. 

Johannes: And if they don't like it, it's great. There is another place that fits more what you authentically, you know, want ultimately. And yeah, that aliveness I think is very energizing. So that like creates a very, very vibrant energy that people want to be around with, and that is, you know yeah, has a lot of gravitational pull. 

Joe: Yeah. And so now let's talk about the operating principles. 

You've mentioned them a lot. One of the things that you implied earlier, but you didn't say it outright, which is to some degree. A lot of your decisions get made based on your operating principles. Meaning they're not really getting made by you, they're not really getting made by the CTO. It's, we make our decisions based on these operating principles.

Johannes: Yeah. 

Joe: So tell me about your evolution. Like, it started with a skateboard and then it, it's weird to say, just tell me about why you wanted operating principles. You started with them before me. 

Johannes: Yep. 

Joe: And then how they've evolved. And one of the things that you, that I think people don't get is if you're really, if you're really living by your operating principles, they will change.

Johannes: Yeah. 

Joe: They have to change. Exactly. So go ahead and tell us about the evolution of living within your operating principles. 

Johannes: I mean, at first I think we announced them, I don't know, was it like roughly six months before we met the first time? And the reason what we did is like we're in a phase of growth and I read it in a book, you know, like, you should have your, we back then they called them values, you know?

Like, have your company values. And they actually were not bad. Like some of them, you know, we've taken with us already then it was a function, hey, what do we as people also value? So one example that is still with us is like students of the game. So being like very, very curious, having that sense of wonder, being that like learning machine, that remained with us.

So we came up with a first set, iterated on that in leadership, announced that to the company. Then I met yourself and we embarked on the, you know, AOA journey. And then I think with back then we raised 25 million. We got like kind of preempted, everything looked amazing on the outset large banks, we were using our product.

We had our self-hosted offering out there. So from the outset, everything looked really, really good. But we also started challenging our limiting beliefs and assumptions. And I think when I think about also myself, back then, I was a bit more, I'm still eager and I'm very motivated, but I think I was a bit too narrow-minded.

Like when I was like, this is what I do. Let's go do it, do it, do it. Not looking at all the data points available. And I think the work with you really helped me to challenge a lot of those core assumptions. Hey, is this actually like, you know, is this actually right? So we did that a lot also within the leadership team of the Connection Course and everything, and then understood that ultimately we are here to play to win, but the product architecture we have created creates so much friction, both for our customers long term and for our own internal development velocity, so how fast we can ship product, that we have to change something. And then within a couple of months, we yeah, decided to completely change our product architecture, how we package the software. And because of that, we had to lay off 30% of the company. 

Joe: Yeah. 

Johannes: In January, 2023. 

Joe: Yeah. That decision was made at my first company offsite with you, if I recall correctly. Yeah. 

Johannes: I mean the, not the decision to lay off, but the decision to play to win. So to change the architecture.

Joe: Yeah. 

Johannes: And then we were still a bit avoidant to fully lean into what that then ultimately means for the business. So that took a couple of, I remember I read the article like see change from Howard Marks who described and what, you know, the changing interest rate environment means for boardroom dynamics and even company culture.

But that was also like happening back then. And that made us to ultimately then like really, you know, understand okay, like we have, we have to do this, this is the right thing.

Joe: Yeah. 

Johannes: For the business. And writing that email, which is by the way, public. And we spoke a lot about that because you said this will be the most important email that you will write.

Joe: Yeah. 

Johannes: To your team, which it also is, and one thing I repeat a lot also with my reports right now is you told me to write this email in a way of how an empowered, like fully empowered person would look at that. Because you know, like 30% of the company is like a lot people rely on you, they trust on you. You know, and they trust you and you make that decision in a way, you know, like you feel, or I felt like a lot of shame and guilt as well as part of that.

And going through that though and communicating through that has really, really shaped a lot of our culture. So back then we had, there was too much of, let's say, like toxic niceness in a way in the company. So walking on eggshells, you know, not wanting to talk about the hard thing. Money was so free and cheap, you know, before of that coming out of COVID. So there was a lot of it just like, you know, works and we had a lot of that walking on eggshells in our culture. 

Joe: Yeah. 

Johannes: So out of that very, very difficult decision came the operating principle of open the drawer, which is about embracing transparency and embracing also intensity ultimately. And the analogy here is, which I think I stole actually from one of your podcasts, and then you stole it back from, 

Joe: and then I stole it back from you. 

Johannes: You stole it back from me. Was that in every apartment there is a drawer where you just put all the stuff into it that you do not want to look at. Right?

Joe: Yeah. 

Johannes: Keeping it, keeping it, keeping it away from myself. And our job as a company is to go to that drawer, open it and bring clarity into the messiness of that drawer, which is an analogy for like conflict difficult, you know, and decisions, fear, emotions you're avoiding and so on. So I think that based on that very, you know, like tough decision, that really was something that came out of that, which has shaped our culture.

Joe: Yeah. It's such a good one. I remember we switched our, we had embrace intensity. We switched it to open the drawer, and one of the reasons we did it was because I was watching one of your meetings and someone's like, oh, I gotta open the drawer on that.

And it was just, it had become such a regular part of your culture for someone to say it and everybody immediately knew what it was, everybody could immediately prepare themselves to have the real conversation. 

Johannes: Yeah. 

Joe: And so it's one of the reasons that we brought it into our company, that phrasing, which, so thank you for that. 

Johannes: I think it's very powerful. So we try to phrase all of them in a way that people can say them. So raise the bar, open the drawer, et cetera, so that people can, you know, use it in their day-to-day. 

Joe: Yeah, 

Johannes: And I mean, open the drawer by now is probably one of the most used sentences in the company because it allows people to do also that. It's like, hey, let me open the drawer with you on that. It kind of gives like permission 

Joe: Yeah. 

Johannes: To have those conversations. Yeah. Another one that we iterated on was before that it was the, we had a principle that was called like we, not me. 

Joe: Yeah. 

Johannes: Which was about, you know, like yeah, always kind of put the company first. It said like, ego is not important or not helpful. There is some truth to it. 

Joe: Mm-hmm. 

Johannes: But what it also did was that people did not show up fully empowered because, yes, it's also about yourself. It's not only about others, it's like about yourself. It's about having end-to-end ownership of things. Right? Really, really, you know, driving those results and thinking also what you want as a person. 

Joe: Yeah. 

Johannes: And say that, so we changed that and iterated that to Connect, connect, connect. Which keeps the, you know, connection part, both with our customers and similarly connecting with each other, but also, and we spoke about that previously, connecting with yourself.

I mean, I think that's the whole, the whole thing. If you really, really understand yourself, it would just be way more effective in everything. And that applies to the CEO, that applies to leadership, that applies to everybody, every person, even, I mean, outside of companies. 

Joe: So what made you want to become a CEO? Not a choice everybody wants. 

Johannes: I think, at the core of it is that I fall in love with the CEO and found a job when I really understood that this is the fastest way to grow me and myself as a person. I don't think there is another job that confronts you with that frequency, with problems such as your bank doesn't exist from one day to the other. You have to make the call to ultimately lay off 30% of people. 

Joe: Yeah. 

Johannes: That, you know, really put a lot of trust in yourself. How do you communicate that? I think those things bring up so much about also who you are. 

Joe: Yeah. 

Johannes: As a person that I am very grateful for the role and the job because I believe it's, yeah, the fastest way for myself to ultimately become a better version of myself.

Joe: What's the story that made you interested in becoming a better version of you? Tell me about like how that formed in your system. 

Johannes: I think when I was so I grew up in Germany, very academic household, small city in Bavaria, like constrained, not fully free-thinking, independently thinking environment. And when I was 16, I read a book from a Harvard psychologist around like a growth mindset, a very American way of saying things, but it really like hooked me and it instilled that feeling into me that whatever I want to do, I can do. And that ultimately I'm on a journey to become the best version of myself.

And I think that always stayed with me. So after I did my computer science degree. I went to a Vipasana retreat in Myanmar for 11 days, continuing to open my aperture and learning different things.

Joe: Yeah. 

Johannes: And that now went from only becoming or wanting to become the best version of myself. Became now to, to a point where I really want to build a company where other people join and after they left, they feel that they have more capacity, are more empowered, better understand themselves, and also become a better version of themselves.

Joe: Yeah. It's funny how that works, 'cause my experience is anybody who is really interested in a, I'm gonna truly understand myself. 

Johannes: Yeah. 

Joe: A better version of themselves. Anybody who goes down that eventually lands in the same place, which is part of me becoming the version of myself that is deeply aligned, that is who I want to be, is contributing to other people also becoming better versions of themselves.

Johannes: And in a way, building a company is, you know, in a way like growing a child that is growing up. And if you are in deep, authentic alignment with your own principles and the company's principles, I think it's a lot of fun. It's very invigorating. And it really helps you a lot to grow.

Yeah. 

Joe: Yeah. So many people don't see it as fun, but see it as overwhelming and, we'll, but we'll get to that. 

Johannes: I mean, that is also part of that, but that's part of the growth journey, right? 

Joe: It is, yeah. So tell me a little bit about what's been the journey of what was GitPod, which is now Ona. 

Johannes: So the purpose of the company is really to multiply human potential in a world that is defined by software.

And concretely, that for us, means that we want to build the future of software engineering. And as that future became very apparently linked very closely to ai. We internally discussed and said, look, if this is all true, what the folks are saying, and agents will be at one point able to take a task and write software in a similar fashion as humans can do, we should be prepared for that moment. And at that point, I think the first thing that we did is we just got along it's like a one month road trip in a way to just learn and be very curious and very quickly it became clear to us that the impact AI will have on our business and on the core experience and the value that we can deliver to our customers will be very, very high.

And at that point, we internally made the decision, all right, we will go all in. I mean, it took like six, seven months to get everybody behind that include customers on that journey. As AI is really shifting and disrupting what the role of a software engineer means and the workflow behind that, it's a big, big shift and there's quite some, let's say identity crisis with a lot of software engineers.

Joe: Yeah. 

Johannes: As that shift is happening, we want to make that transition from being a software engineer, to being a software conductor where you're not like writing and crafting every single line of code when you're orchestrating different workflows, we want to make that transition as enjoyable, as exciting and as fun as possible for all software engineers out there.

Joe: So you have a guy in revenue who's like, I'm selling one thing, now you're gonna ask me to sell another. You have a CTO who's built one thing, just built a really beautiful version of that thing and now, whoa, now we gotta change. It was a massive switch. 

Johannes: Mm-hmm. 

Joe: You're building prototypes literally two or three months after like the first decision to explore is made.

Johannes: Yeah. 

Joe: You're selling product month or two after that, like just massive change very quickly. 

Johannes: Yep. 

Joe: How do you have those conversations with people who were thinking they were heading to Georgia, so to speak, and now they're heading to California? 

Johannes: Yeah. One caveat there is that it is a very logical evolution of the product. So it wasn't like a hard pivot. It was more using the primitives we have built and kind of repositioning them in a bit in order to create more value. So I think that is, that is important because that was the reason why we could take our customers on the journey. And we have, I mean, our customers include the oldest bank of the United States, the Bank of New York, largest alternative asset managers, largest pharma companies. They're more than 2 million developers on the platform. So big, big organizations trust us. So it was always important that, this is not like a pivot, but an evolution. 

Joe: Yeah. 

Johannes: The core decision making then ultimately I believe, is and was rooted in a deep level of trust that we have both in leadership and with the rest of the company.

So you famously told me you need to get two things right in building a company, which is building great relationships and making great decisions. If you get those two things right, you will be successful. And I think over the last three years we invested a lot in establishing that very authentic trust within the company. And that allowed us to bring all data points to the table to then make a decision based on all available data points. And I think we have a very high level of comfort to live in discomfort. 

Joe: And how did you build that trust? Like when I saw what happened in your organization, you sat down, had some very hard conversations living by the principal that you call open the drawer, and had some very, very difficult conversations that people were not particularly happy or unhappy with, but they were in it, they were in the debate with you. And then seamlessly, almost after those conversations were had, consensus was built. It's not even consensus, it was alignment was built. And boom, you all were off to the races. 

Johannes: Mm-hmm. 

Joe: And when I think about it, I was just in another company recently.

Johannes: Mm-hmm. 

Joe: And I was telling them alignment always beats effort. Meaning like if you have a, a bicycle and you're doing the tour de france and you have the best bicyclist on a cruiser, single speed with the wheels wobbly and the chain loose 

Test: mm-hmm. 

Joe: They're never gonna beat an average biker on a completely aligned 15 speed, 18 speed, whatever it is these days, vehicle. Right? And so you created that alignment just incredibly quickly. How did you build the trust? And I know that the conversations are, that there's debate in the conversations but what I know about the way you work is it's very not top down. It's not, you're not just telling them, this is what we're doing. So how does the decision get made and how does that work? 

Johannes: Really, everything is ultimately rooted in the principles and I think over the last three years specifically, after working very closely with you and the team, we developed in a way a deep resilience in our culture and are embracing change in a way where we don't look at it from a perspective of overwhelm, but more from a perspective of, okay, hey, there is tension. Let's run towards that tension. 

Joe: Yeah. 

Johannes: throughout the whole organization. And that tension can be in interpersonal relationships within the company. That tension can be with the product architecture. The tension can also be in relationships with a customer. But whenever we feel that friction, we kind of immediately run towards that. So that is, I think, very deeply rooted in and learned also as part of the culture. So this might sound, I dunno, not real, because we kind of renamed the company and it's like people feel ah, that's like a drastic decision. But in a way it felt very, very, very natural to us.

There were actually harder decisions we had to make in the past. And again, I think number one is trust and trust also stems from transparency. So, for example, our board packs, so the information we write for our board meetings, we share with the rest of the company. Our big decisions and we had a couple of them throughout the years. And we write what we call RFCs. So request for comments where there is a clear problem statement. It's, I think another thing we refined over the, over the years together with, with you and the AOA team and then talk about success criteria. So what does a good solution look like, you know, to that problem. And then speak about the proposed solution as well. And we take that as a basis, oftentimes a written basis where people then can talk, about and leave comments and add their data points. It's still clear ultimately somebody has to make the decision. I think that is also very important 'cause oftentimes, you do not want to have decisions by committee. I think that slows you down. So it needs to be very clear who ultimately owns the decision. And on that case, it was me and for, I mean, it's kind of a one-way door decision. We are not renaming the company again. Right? So I had to make the decision, but everybody felt heard because they were able to add the data points to the table. 

Joe: So that, that, so you just named three of the things that I think are beautiful, like running towards the friction. 

Johannes: Yeah. 

Joe: Which I would say builds trust, but is your second thing, which is builds trust.

My experience is that if a team can go into difficulty and then come out feeling like they're better people or they've made a better decision, trust gets built. Trust and then transparency. Like those three things are exactly how I see you move in the world. And what allows this, this, transition the transitions, many transitions very quickly in the company and the culture to stay aligned in these massive transitions. Which is amazing. And so, but what I, if I'm listening to this and I have no idea what we're talking about, the first question would be, what do you mean running towards friction? Before, during, and after. 

Johannes: So let's start with the, the, the business logic and rationale. On the business side, there is a really good quote from one of the Spotify founders who says, the value of your company is the sum of the complexity of all problems solved. And I think there is a lot of truth in that.

So the bigger the problem, the more meaty the problem, if you solve those things, there is a lot of value. Right? And the biggest problems are usually where you feel the largest amount of tension, of friction. Right? And that stands in between efficiency and the simplest like logical argument for me always was if there is, for example, interpersonal conflict in the leadership team, you know, usually that's like product engineering and sales sometimes, and there should be there, it is always, I mean, some natural friction that you want to have there, but if they stop in a way talking to each other, if they stop thinking that they can add all relevant data points in order to move the whole thing forward. They limit the amount of data that ultimately you as an organ organization require to make the optimal decision.

Joe: Yeah. 

Johannes: So I think for me it's just If you're avoiding tension, if you're avoiding your fears, if you're avoiding conflict in your organization, you're limiting the amount of data points that can help you make a better decision as an organization. 

Joe: So one of the things that you've done really well is you've made the principles known. For most companies, it's like, if I went around the company, nobody could tell you what they are. I go around your company, everybody knows, everybody knows what the operating principles are. So two part question. First part is how'd you do that? Second part is most CEOs think that's not a good investment. 

Johannes: Mm-hmm. 

Joe: They say, oh, I have to spend all that time to, to like sell these principles. To some degree I want you to tell me about the ROI as far as how much time did it actually take you and how much time has it actually saved you? Like so ROI as far as time with operating principles? 

Johannes: Yeah, I think, first one again, is that this is what I want in life. So the operating principles are in a way also how I live my relationship with my fiance. They are how I, you know, build relationships with my friends. They're very, very much related to what I want to have, you know, out of life, which I think is very, very important. And that again, not only applies to to, to a founder or CEO, but also from a leadership perspective, if your alignment is not strong with the principles of the company, there will be too much friction. And again, life is too short. Right? There will be other places where you can be more in alignment with what is important to you. 

Joe: Yeah. 

Johannes: Generally, they are aligned a lot with a couple of the, you know, AOA principles, because this has really also shaped, you know, my, my life both professional and personal. So I wouldn't say that the process was, you know, endless. It was like, you know, very, very natural. There was like big moments and the company's history happened. 

Joe: Yeah. 

Johannes: Where it was for me also a way to communicate to the company. So when we did the layoffs, for example, I spoke a lot about embracing intensity.

Joe: Yeah. 

Johannes: As a way to like get people also in, you know, in that mindset and thought a lot about, okay, whew, how do you actually, you know, communicate? How do you lead through that? 

Joe: Yeah. 

Johannes: So they've become very, very helpful as part of that and became and we shaped them also, you know, because of those things. So they evolved and time-saving-wise. So with recruitment, big time and with making also decisions when things are not working out. 

Joe: Yeah. 

Johannes: with employees as well. So after we hired them big time, we have a process which we call quarterly touch bases. So we're you have very, you open the drawer.

Joe: Yeah. 

Johannes: You open the drawer with your manager, and they're also fully guided by the operating principles. We had a culture that was very, very documentation-heavy initially, because we followed a bit what GitLab was doing, and that. Led to a lot of also outdated documentation. So we kind of had this very prescriptive, you know, slack guidelines and you know, all of those things. 

Joe: Yeah. 

Johannes: And ultimately, when I think about a lot of those things right now, it just should be the operating principles. They're the essence 

Joe: Yeah. 

Johannes: Of decision-making. So why do I need to have those hundreds of documents when I can just like codify 

Joe: Yeah.

Johannes: You know, culture, which is how to build relationships and how to make great decisions. 

Joe: Yeah. 

Johannes: In that set of principles. So there is a lot, a lot, a lot of efficiency that we gained. 

Joe: Yeah. That's the thing that I think people don't quite grok, both in personal life and in business. If you have a good set of operating principles, 80% of your decisions get made almost automatically.

Johannes: Yeah. 

Joe: And they get made well consistently. It's just an amazing efficiency for probably, I mean, focus time on operating principles, would you say 40 hours every two years? What would you say? Just generally? 

Johannes: We have kind of a recap at every offsite, which happens twice a year. 

Joe: Yeah. 

Johannes: As part of the leadership of-fsite, but right now they're very stable.

Joe: Yeah. 

Johannes: So that, you know, for a couple of off-sites we always did that, you know, iteration process, look them again, that right now they feel very, very natural. And I think part of that is that we, you know, each, as people have grown, we've seen like a couple of things as a company. So they're quite like stable now. They will, for sure, you know, change, evolve. But I think the foundation is very true. 

Joe: That's the thing that I think people also don't get about operating principles is that it's like a lot like training a dog. 

Johannes: Yeah. 

Joe: If you don't spend the time up, it's a lot of time up front, but if you do it the rest of your dog's life is a lot easier. 

Johannes: Yeah. 

Joe: But there is upfront cost to it. 

Johannes: And you push down also decision-making in a more decentralised fashion to the company. Right? It's like my life is way easier because of that as well, you know? 

I mean, still get frustrated from time to time. Of course. Yeah. but usually, you know, people are really aligned with those principles.

Joe: Yeah. Cool. Johannes, that was a great conversation. It was so good to have you here. 

Johannes: Thank you. 

Joe: Yeah, thanks for being here. 

Johannes: After three years, I made it on the podcast. Can cross off one thing from my bucket list. 

Joe: And yeah, I hope to have you back to where we can find out what's happened to your company and how the culture is progressing. That'd be great. Yeah. 

Johannes: Very grateful for the work that you do and the whole team, really grateful. 

Joe: I feel incredibly fortunate that we get to work together. 

Johannes: Me too. Thanks. 

Joe: Yeah. 

Johannes: Looking forward to the next three years. 

Joe: Thanks for joining us, and it was great to have you here, Johannes. And we're gonna put in the show notes the operating principles, if that's okay. And we are also in the leadership newsletter, we'll send out that email that Johannes talked about that was that very difficult defining email for him. As well as we're gonna give you a link to join The Council if you're interested in that. So anything else that you need, hopefully it's in the show notes.

This podcast is co-hosted by Joe Hudson and Brett Kistler, and it is produced by Mun Yee Kelly. Thank you very much. Please subscribe and have a great day.