Welcome to the Pandacracy Guidebook. The Guidebook will help guide you on your journey to manifesting your best self while engaging in lifelong learning, earning, and problems solving.
This is an evolving Guidebook to maintaining the energy and focus of self-managing teams and organizations. Since teams are made up of individuals, we place a strong focus on each individual's journey.
One of our Core Values is respect for individuals. Part of this is to help push humanity forward beyond the practice of grouping/stereotyping people based on certain traits -- whether that be gender, tribe, nationality, skin tone, etc. "Don't judge a book by it's cover," as they say. We recognize each person's strength and capacity to contribute to better communities, and apply a growth mindset to developing that strength and capacity every day. Another part of this is to recognize that each of us is different, and that's awesome. There's no evidence that Einstein said:
"Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid." - Probably Not Albert Einstein
But it's a great quote anyway.
This Pandacracy Guidebook is based on the personal experience of growing our team from 2 people to more than 30 between 2014 and 2017 and making a lot of big mistakes along the way. During that time we also had a lot of successes, graduating over 200 young people from our intensive tech, design, and business training courses and opening 2 full-time training facilities in both urban and rural parts of Kenya. We draw on a wealth of knowledge by thinkers such as Carol Dweck, Frederic Laloux, Wangari Maathai, Lex Sisney, and many more. Awesome things can happen if we 1) properly align the team's Purpose with the Purpose of the individual, while 2) organizing and energizing our projects and processes properly. WARNING: manifesting awesomeness is not easy, it requires a great deal of energy and focus.
This Guidebook has been specifically designed for Tunapanda Institute, a training and digital services organization based in Kibera, Nairobi, Kenya. It is published under a Creative Commons (BY-SA) License, so do with it as you wish. Our Purpose was redefined in May 2017 as the following:
Tunapanda Institute trains young people in practical tech, design, and business skills so we become lifelong learners, earners, and problem solvers.
We have not yet defined "young people" -- but suffice it to say that with enough creativity and curiosity, you can be 100 years young.
Values are an important part of helping people develop in the context of a team. They help people figure out what to do and how to do it without being told what to do or how to do it.
Responsibility. Operating openly and transparently to each other and the world.
Collaboration. Working together to transcend boundaries.
Innovation. Creating value through continuous innovation.
Respect. Respecting each person as an individual.
Growth mindset. Always learning. Always teaching. Together.
The importance of combining Values with Purpose cannot be overstated. It's worth reading a bit from Laloux's Reinventing Organizations wiki on Culture and Values.
Pandacracy is an emerging flexible, light-weight, and portable "management operating system" that can help your team grow to the next level while encouraging people to bring their full selves to work, share their ideas, and innovate in line with your team or organization's Purpose.
Think of adopting pandacracy like upgrading your computer from an outdated system like MS-DOS to a modern, open, powerful, flexible operating sytem like Linux or Android.
Linux is the open source operating system that powers more than 95% of the world's supercomputers, most of the internet, and even most mobile phones (through Android).
This is an explanation of management processes and tools that are used by Tunapanda Institute to achieve a wide range of goals with a relatively inexperienced, but extremely high-potential, team of young people from around Kenya and the world.
Pandacracy is a "holacracy-like" open management operating system. Like other similar systems, much of our work is based on other systems like Agile development. Unlike other similar systems, all the supporting software and tools we create are open source and designed not only for highly-experience top professionals to work better - but also for young and inexperienced people to become top professionals.
Pandacracy is currently (05/2016) used by only two organizations: Tunapanda Institute and Tunapanda Institute Kibera CBO.
Tunapanda Institute is a small but relatively complex ("full stack") non-profit - but revenue-generating - group that aims first to understand the world and second to spread access to high-quality learning experiences. Our current focus is on enabling young people in East Africa to develop skills related to problem solving and value creation in technology, design, and business.
We see 3 primary functions of our team:
- Training and learning. This is who we are. We run a training facility in the outskirts of Kibera, a large Nairobi informal settlement. Training and school operations are now largely performed by graduates of our 3-month basic training program and the 25 young people who are accepted into a cohort pay no fees and even receive a small stipend to take part.
- Powering and partnering. This is how we send energy out into the world. We buid open source software and create open learning resources that digitize and extend our core training so that other individuals, groups, and organizations can copy our model and help improve on it.
- Producing and selling. We provide a range of digital services to clients. This brings energy in so we can keep being who we are. In order to maintain our reputation we have to execute well on work for clients by performing work creating curricula, digitizing materials, building software, peforming research using human centered design (HCD) methodologies, and consulting for others who wish to copy/modify our model.
In order to accomplish this we divide our organization into various circles, which operate semi-autonomously, some of which are connected through "strategic grouping."
Soon we'll draw a diagram, but for now look at it this way:
- Tunapanda Core Circle
- Tunapanda Team
- Trained by Tunapanda
- Produced by Tunapanda
- Powered by Tunapanda
The assignment of energy points allows peer-to-peer evaluation of roles within a given circle. The points take on meaning when bonus money (usually from work performed for clients) flows through the energy points system.
The process is as follows: [TODO]
“The way to wealth is as plain as the way to market. It depends chiefly on two words, industry and frugality: that is, waste neither time nor money, but make the best use of both. Without industry and frugality nothing will do, and with them everything.” - Benjamin Franklin
Every individual and team needs to have and practice skills of managing one's own time/energy and money. On top of those foundations, we need strong communication and other teamwork skills in order to excel.
Money is a very interesting technology. It serves a variety of functions, which we'll discuss elsewhere.
Some people think of money as a way of keeping score. Others think of it as an object. We recommend that you not think of it in those ways. Instead, think of money as a tool or "social technology" that can help remove obstacles and enable you to shape the present to grow the future you would like to have. You need to develop the right Knowledge, Skills, and Attitudes (KSA) about money just as you do any other tool or technology.
For those interested in the topic, there are several resources to help you think about money as a technology, rather than an object.
My recommendation is to learn about the history of money, and to begin with the work of Niall Ferguson. He wrote a book, "The Ascent of Money". That book was turned into a 6-episode documentary series which you can watch online.
The above documentary series should give you enough perspective about money to speed up developing your money skills.
Understanding and managing money is a very important part of being a responsible member of society, team member, and family member. So please take it seriously, and don't be afraid to talk about how money works with other people!
Managing finances in a responsible, transparent manner takes a bit of time, energy, and focus:
- First you need to set up the right systems. This includes:
- Ways of storing money and handling transactions. This is some combination of bank accounts, M-Pesa (mobile money) accounts, cryptocurrency wallets, and secure places to keep cash.
- A transaction log for tracking revenues and expenses. Without tracking expenses it is very easy to overspend (which can cause you to run out of money) or to be a victim of fraud, theft, or mismanagement from within your team. Tracking expenses is normally done using paper, a spreadsheet, or another digital application connected to a database.
- A way of creating and following a budget. This allows you to predict your expenses, and minimize the need for individuals to make every financial decision. This is also normally done using paper, a spreadsheet, or another digital application connected to a database.
- Once the systems are set up, you need to work your systems by repeatedly practicing our normal 3-step process:
- Plan with clarity. Try to predict how much money you will have coming in (revenue projections) and make your budget at the beginning of the month or quarter so that you know how much you'll need to spend. Know how long your runway is (that's how long it would take you to run out of money). The first time you make a budget it might take some time, but it's a skill that you and your team will develop quickly with practice.
- Execute with commitment. You need to follow the budget, and record every single revenue and expense transaction in your transaction log as it happens.
- Reflect with composure. You'll need to undergo regular reconciliations of accounts, where you compare your expected amount with the actual amount. You'll want to review your budget toward the end of each budgeting period to see how well you did.
That's it to start with! Once you're good at the above, you'll also want to start generating other financial statements (like the Balance Sheet, Income Statement, and Cashflow Statement) which can help you understand your business better as well as receive grants, secure investment, form better partnerships, and get bigger clients. People prefer to work with individuals and organizations who know how to execute on a plan and aren't likely to become insolvent (run out of money). So engaging in proper bookkeeping can really help.
Personal and team finances are a bit like breathing:
- In
- Out
When you level up your skills and start using money mindfully, the pattern changes a bit:
- Money comes in
- (+) Money is assigned a job
- Money goes out
Learning to manage your money well is one of the most important things you can do in life. By managing your money and your time, you can grow wealth and improve your life significantly. It's also much easier to do better work when your finances are under control -- it's hard to do your best work when you're worried about the future and paying bills.
- Plan with clarity. Make a personal budget. We recommende the You Need A Budget (YNAB) system. It's easy to learn, just follow these steps:
- Read the webpage www.youneedabudget.com and try to memorize the 4 rules of budgeting on the method page.
- Sign up for the free email course. It will take you at most 15 minutes per day for 9 days to read the emails and take notes (here are my notes and a wiki on Reddit).
- Make your first monthly budget!
- Execute with commitment. Just record all your transactions somewhere and spend what you've budgeted. Try not to spend money you haven't budgeted. But don't forget to roll with the punches!
- Reflect with composure. Be honest with yourself about how well you've done, what went well, and what could be improved. Reflection is a really important part of the learning process, so enjoy it.
Note that there is a sub-reddit (/r/YNAB) devoted to YNAB where you can ask questions and a helpful starting guide.
If you are running a service business (where you provide services for clients) you can quite easily follow the You Need A Budget system with your team as well. If you have a lot of inventory (things you're planning to sell) or other capital assets (like equipment used to generate income) then you might need something more complicated, and it's probably worth hiring an accountant.
So, for a service-based organization or school, you can:
- Plan with clarity. Make a team/organization budget. We recommende the You Need A Budget (YNAB) system. It's easy to learn, just follow these steps:
- Read the webpage www.youneedabudget.com and try to memorize the 4 rules of budgeting on the method page.
- Sign up for the free email course. It will take you at most 15 minutes per day for 9 days to read the emails and take notes (here are my notes and a wiki on Reddit).
- Get your team together and make your first monthly budget!
- Execute with commitment. Just record all your transactions somewhere and spend what you've budgeted. Try not to spend money you haven't budgeted. If someone wants to spend something that's not in the budget, they'll have to justify it using a combination of storytelling, solid arguments, and data to support their opinion that the money should be spent. This can encourage everyone to take part in the budgeting process and think more clearly about money.
- Reflect with composure. Have regular reconciliations (you should start with daily or weekly reconciliations until you get good at it) to make sure you haven't forgotten to record any transactions and that your accounts are as full as your records indicate. Be honest with yourselves about how well you've done, what went well, and what could be improved. Reflection is a really important part of the learning process, so enjoy it. We recommend sending your team notes about the budget, and keeping the budget and transaction log as transparent as possible. Everyone on the team should understand the importance of budgeting, and how it works. But their may be a group of people, such as a Finance Committee, that has the ultimate responsibility for budgeting and recording transactions.
Note that there is a sub-reddit (/r/YNAB) devoted to YNAB where you can ask questions and a helpful starting guide.
[TODO]
The Produced by Tunapanda Circle is all about performing quality services to solve problems and create value for clients and partners. This is an important part about what makes the Pandacracy model sustainable, and enables us to freely provide high-quality, intensive learning experiences to members of the community (Trained by Tunapanda).
The skills developed undertaking client projects and energizing roles in Produced by Tunapanda are vital for your career in the knowledge economy. Anyone who wants to be an entrepreneur, freelancer, or independent consultant needs to have experience in selling ("gig-finding") and producing ("gig-doing"). If you want someone to give you their money to grow your business (i.e. get investment) they are certainly going to want to know what you've done to bring in revenue to Tunapanda. If you want to form a paid partnership or secure a big client, you will have a much better chance if you can show your track record of creating value and leading projects at Tunapanda. We want each of our team members to be able to proudly demonstrate the value they've created when they take further steps in Tunapanda or afterwards. If Tunapanda's reputation grows, it will reflect well on you. If you do well in the future, it will reflect well on Tunapanda. It's very important to remember that knowledge economy business is not a zero-sum game: one plus one can equal three.
The revenues earned in Produced by Tunapanda are used in several ways:
- Paying the gig team (this includes gig-finders and gig-doers)
The percent that goes to the gig-doing team changes based on how well our overall organization is doing financially. The more our revenues exceed our expenses, the higher the percent that goes to the gig team (and the lower the percent that goes to Tunapanda). This is a classic cooperative model.
Working on gigs is a great way to hone your skills and solve problems in your community or around the world. Someone who works on gigs on their own is called a "freelancer" and a team of people is called a "consultancy" or "agency". Pandacracy, in it's current form, involves a team of people performing gigs together as a consultancy or agency.
Gigs are normally short-term, but they can also be long-term. Pandacracy involves practice proper project management, often in an Agile manner, even in our smaller gigs.
As with most activities in Pandacracy, it is important to follow the 3-step process:
- Plan with clarity.
- Execute with commitment.
- Reflect with composure.
Running a business or startup requires two basic skills:
- Selling
- Producing
Ideally, selling is about forming relationships and solving problems. Often, big clients start out as small clients. They'll give you something small to work on and see if you communicate well, do the work effectively, and complete deliverables on time. "Gig-finding" is all about closing deals and helping to manage client relationships. Gig-finding is a prerequisite to gig-doing. If you can't get someone to pay you for something yet, you can help them solve problems for free. Just be sure to "label your concessions" -- that means that you tell them clearly, "Well, it's going to take quite a bit of time and sacrifice for me to do this, but I know you'll be appreciative and make referrals." Failure to label your concessions can make people devalue your work; sometimes they'll think that they are the ones doing you a favor. We humans are a strange bunch.
Producing is about creating something that solves a problem for another person, group, or business. Normally, it is a business problem that will help them earn more or spend less. In the case of impact-focused organizations (like NGOs) it will help them spread the word about their work and/or rise in stature.
Anyone can find a gig which can help keep Tunapanda Institute going. It's not easy, though -- it requires tough skin, the willingness to hear "no" (a lot), and a true growth mindset. However, it is an indispensable skill that will help you in all walks of life. If you sell a lot of gigs for Tunapanda that will not only help keep our training free, but it will add some real substance to your CV that can help you
Here's the basic process: 1) a) Meet someone socially or at an event. Show that you're passionate and competent and care bout your work/team and they'll assume that Tunapanda is also passionate and competent. Make sure to ask questions to learn about them. b) Find someone. Another option is to have develped your business model and then go out and find people/businesses who match your criteria. For example, you might want to build websites for travel companies. You can then look for sites that show up late in your searches and offer them new websites or improved SEO. You still need to communicate well and learn more about them. 2) Once you've identified a problem they have, tell them you and your team can solve it. Sometimes they know they need a website, other times they aren't aware that SEO can help improve their online presnes. Be clear about the value for them. Remember: this is usually business value (they earn more or spend less) but can include other value, such as more impact, improved visibility, better reputation, etc. 3) Write up a short proposal to make sure you're on the same page. This can be called an LOI (Letter of Intent -- we have a repository of past LOIs in our Team Drive you can learn from). There is also some negotiation that needs to take place during this phase. You should be talking to the team to make sure we have the right skills and that they key team members will be able to deliver in the timeframe you're suggestion -- if they're busy on other projects, or aren't interested for some other reason, they won't be available. Also, if you've screwed them over in a past gig (accidentally or on purpose) and haven't patched things up, they might not want to work with you again. 4) Clarify the details, especially if it is a fairly large gig. Thic can be called a TOR (Terms of Reference -- we also have examples of these for you to learn from) and might also include a contract. Again, more negotiation. You want to start having a project plan with estimated timeframes 5) If you've negotiated an up-front payment, send them an invoice. Once they've paid, ensure consistent and clear communication. Remember: good business is about relationships, not just transactions. You are helping to create a great experience for clients as well as solve problems for them. 6) Remember that you're going to want to help the gig-doing team as best you can, and ensure consistent communication with the client. The higher the team's expenses, the less money you'll make. If they don't do a good enough job, your reputation will suffer with the client and (potentially) other people in the client's network.
Currently (September 2017), 50% of the gig money goes to Tunapanda and and 50% to the gig-finding and gig-doing team. It would be great to see this shift to something like 20% going to Tunapanda and 80% going to the gig-finding and gig-doing teams. In order to make this happen, we need much higher revenues (and/or much lower expenses).
Note: the money is only divided AFTER expenses. This means that the burden of each gig expense is shared by the gig-finders (25%), gig-doers (25%), and Tunapanda at large (50%).
As you think about the profit that comes from gigs, you should think in terms of both time/energy and money spent. Spending more time can help develop skills, but it can also be wasteful. This section deals with financial expenses.