Unlimited vacation policies are surprisingly controversial. The name sounds too good to be true. The skeptics have the same basic argument: unlimited vacation policies will make employees take less days away from work and are therefore bad for employees, but good for the company.
The theory behind the argument is that companies have a set amount of vacation time and it expires at the end of the year. Basic human tendency dictates that we don’t want to “lose” something that we’ve earned, so people try to use all of these earned days. Employees use their vacation days - but not too many - and everyone is happy. A set number of vacation days is safe, predictable, and is the industry standard for benefits.
In contrast, an unlimited vacation policy lacks a fixed number of days and therefore lacks the urge to use vacation days before you lose them. The popular belief is that without the fear of losing vacation days, employees will take less time and end up working more hours and more days. With this belief the company ends up getting more overall output under the disguise of a new employee benefit. Is this theory true or is this the skeptical Human Resources manager working hard to justify a complex and limiting benefits package? There is also the general fear of the direct opposite: employees will abuse the privilege and take entirely “too much” vacation time.
Both arguments had a hint of paranoia, but I couldn’t be sure until we tried it ourselves.
A New Policy
Prior to beginning 2014 we decided to change our vacation policy from a fixed number of days to an unlimited policy1 of “take what you need” with no strings attached.2
At the beginning of the year, I was concerned about the basic negative arguments on unlimited vacation policies. Many questions crossed through my head: How can I keep a culture that thrives on results but also encourage a great work/life balance? How would I approach situations in which people abuse the policy? Did I have a hidden meaning of what policy abuse meant to me, that was unclear to everyone else? How could I encourage vacation for those people that tend to not take breaks and were made worse without the fear of losing vacation days?
When we created our unlimited vacation policy our thinking was that we are all adults, and we are all working hard towards our personal goals and the goals of the company. We specifically hire people that have a passion for great work and results. We know that we have great people that work hard, but we also wanted to reward that behavior with less process and restrictions around personal time away from work. If someone is crushing it all year, I don’t want to hold them back from taking all of the vacation they want. We are adults and professionals and we know what it takes to make something succeed. Each employee also know how much time off they need to rest and recover. Let’s leave the decision of when and how much vacation to each person and trust their judgement, just like we trust them to do great work.
A Year in Review
Now that 2014 is in the record books, I took a look back at the numbers.3 For comparison, before instituting the unlimited vacation policy in 2014, we had a very reasonable policy already in place during previous years. In 2013, we offered around 4 weeks of paid time off. I don’t believe in forcing people to accrue vacation time, the practice always seemed weird to me, so from the time you start at the company you could have taken up to 4 weeks time before 2014. The average actual amount of vacation taken in 2013 was just over 3.9 weeks. The least amount of vacation time taken by any employee that was with the company for more than 6 months was 3.2 weeks. Roughly, vacation time was about 8% of the total hours logged for the entire year. During 2013 no one took advantage of vacation, and everyone took what they were allotted or just a bit less. It is also worth noting that only one employee took time off for a new baby paternity leave during 2013. More on this later.
Starting with January 1, 2014 we began the policy of unlimited vacation. The average number of weeks vacation across the company was just under 6 weeks for those employees that were with the company for the entire year. The average for all employees in the company, regardless of starting date in 2014 was about 5 weeks. Across the board, people took more time off away from work in 2014 than 2013. Even those that tend to not take as much vacation ended up taking more time during 2014 than before. The least number of weeks taken in 2014 was 4.3, barely up just a few days from 2013 but still overall better. In 2014, the time spent on vacation was about 13% of the total hours logged for the entire year.
For both 2013 and 2014, the time of year when vacation time occurred was fairly predictable. Most people spent a few weeks of vacation during the summer, and a few weeks towards the end of the year for the holidays. Then the rest of the year was sprinkled with weekend trips and the occasional week away. Overall, the lack of limitation on vacation time did not negatively affect a single project or product milestone. In general, people were respectful of their project teams and scheduled time in advance or around these milestones to avoid conflicts.
In contrast to 2013, where only one employee took paternity leave, we had 5 employees take several weeks off for paternity leave. The vacation policy was a blessing to these people as they were able to be with their families during these times, without having to sacrifice their entire year’s worth of vacation. I was excited to be able to let them focus on their families, knowing they could take the time they needed then and throughout the rest of the year without penalty.
Does it work?
The numbers for unlimited vacation met my expectations and overall the policy has been an incredibly positive experience for the company. The time spent away from work increased incrementally for most people, and in very few cases did anyone take advantage of the policy.4
There are a lot of criticisms of the unlimited vacation policy. Every company will be different in how it handles and manages time off for its employees. In our case, we had nothing but success with the policy. People had more time away from work to spend with their families. The company met its goals, and shipped great work. As with anything, we’ll continue to work on our vacation policy and adapt it over time to ensure we have a sustainable great place for people to work. Despite the criticisms, an unlimited vacation policy can work, and we’ll be putting it to use again in 2015.
The great Teehan+Lax agency is shutting down, and its leadership is joining the Facebook team:
We have made a big decision that in 2015, we will join Facebook and the Facebook Design team. This is a significant move for us, professionally and personally.
Good news for the partners, but what about the rest of the company? From the outside it is difficult to tell the full story, but the appearance is that about 40 people were let go as a result of the move.
Most of all, software as a whole just isn’t good enough. There have been a few magical leaps in the evolution of software, products and operating systems that dramatically improved productivity and yes, joy among users. But given how cheap (compared to cars, building materials or appliances) it is to revamp and reinvent software, and how urgent it is to create tools that increase the quality of what we make, we’re way too complacement [sic].
Fix all bugs. Yes, definitely. But more important, restate the minimum standards for good enough to be a lot higher than they are.
We need better design, more rigor and most of all, higher aspirations for what our tools can do.
Time to get to work.
David Ulevitch, CEO of OpenDNS:
I’ve recently started talking to investors again and one of them asked me this highly poignant question: “Is what you do hard?” I don’t know. Is anything hard? If anything, things are easier now. You have frameworks for frameworks for frameworks. SMTP was hard. TCP/IP was hard. SSL was hard. Today there are truly amazing development tools like Meteor and Parse. You have AWS! Most applications and services I use on the Internet are mediocre, at best. The bar to be simply interesting is low. The bar to succeed isn’t much higher. It’s not depressing, it’s an opportunity.
This one is a bit old but it popped up again a few places today. Well said then, and now.
Nolan Caudill on the Slack blog:
At Slack, we want to work with people that have the skills to do their job and the gumption to do it well. They possess great empathy, as designing and building a great product is made up of countless acts of empathy, not only for the users but for those you do the work alongside. Diligence, persistence, an unrelenting bull-headed pursuit of Quality - this drive is what compels the kind of person we look for.
These traits are not intrinsic to any category of sex, creed, origin, race, or any of the other petty reasons others have used to determine who is able to do this kind of work. We believe that the above qualities are a deeper, better, and truer measure of what makes someone successful at Slack.
Specifically, our industry has for decades been directed and built by a mostly homogenous group, and has downplayed the accomplishments of others not in this group. We recognized our own shortcomings in this area and thus wanted to be explicit about what Slack stands for, what we are trying to build, and who we want here to help us build it. By focusing on how we build Slack first, we can hopefully improve the greater industry, in whatever measure.
Last year we topped 40 people at Basecamp. And that’s when I began to notice that we didn’t know as much about each other as we used to when we were smaller.
When any group gets to a certain size, it naturally begins to splinter into smaller groups. Cliques form and conversations often stay inside those cliques. That’s natural and OK, but I thought it would be nice to force some cross-clique personal conversations so everyone could get to know everyone else a little bit better again.
So I had this idea to bring together five random people (plus me and David) once a month for a one-hour free-flowing anything goes conversation, and then share the conversation with the rest of the company after it was over.
I admire the folks at Basecamp, specifically Jason, for constantly striving to know each person in their growing company. Once you are past a few dozen employees it becomes a big challenge, but it doesn’t mean you have to give up. Focusing on knowing people just needs to be an intentional part of your daily work.
Brian Cardarella, CEO of Dockyard on the company’s 2014 year-in-review:
This year’s story is one of how we nearly went out of business twice yet still managed to pull off our most successful year yet.
His entire story is very transparent and clearly presents some seldom-discussed aspects of small software companies. I’ve dealt with most of his same issues personally as I grow my own software consultancy. Hiring is hard. Maintaining a quality rate is hard. Building a business development team is hard. Maintaining sufficient margins is hard. Culture is hard. But when it all pays off that hard work is rewarding. Here’s to another great year, Brian.
I wish more people would share the real stories of small companies like this.
The problem with time, though, is it’s not actually measuring value. It’s measuring cost as a proxy for value.
Advertisers don’t really want your time – they want to make an impression on your mind, consciously or subconsciously (and, ultimately, your money).
As the writer of this piece, I don’t really want your time – I want to make an impression on how you think. If my rhetorical skills let me do that in less time (for me and you), all the better.
Great piece. This part sounds a lot like actionable vs. vanity metrics too.
Cabel Sasser on the Panic company blog:
Panic is a multi-million dollar business that has turned a profit for 17 years straight.
It just hit me, typing those words, that that’s a pretty insane thing to be able to say. (And, sure, we barely qualify). Believe me, I know it won’t last forever - but wow, what a kind of crazy deal.
If you’re curious about some business stuff, our setup couldn’t be more cut-and-dry. We still have no investors or debt. The overwhelming majority of our revenue goes to employee salaries and benefits, which is just the way we want it. Then there’s our rent, our internet, some donuts and chips, etc. Anything left over goes into the magical Panic Savings Account for future projects or emergencies - we’ve always felt it was important to have some wiggle room for who-knows-what. (In the past we’ve actually reduced that warchest by simply distributing it to employees as a bonus.) We also continue to operate on standard office hours, avoiding weekends and crunchtimes with ferocious overprotectiveness, for better or worse. Maybe the most controversial thing we have is an open office, but since we have no sales or marketing teams things are usually library-quiet.
Panic is the gold standard for software development shops doing it right.
Steven Sinofsky also responds to the recent discussion on remote working and hiring:
Overall the big challenge in geography is communication. There just can’t be enough of it at the right bandwidth at the right time. I love all the tools we have. Those work miracles. As many comments from personal experience have talked about on the HN thread, they don’t quite replace what is needed. This post isn’t about that debate-I’m optimistic that these tools will continue to improve dramatically. One shouldn’t under estimate the impact of time zones as well. Even just coast to coast in the US can dramatically alter things.
The core challenge with remote work is not how it is defined right here and now. In fact that is often very easy. It usually only takes a single in person meeting to define how things should be split up. Then the collaboration tools can help to nurture the work and project. It is often the case that this work is very successful for the initial run of the project. The challenge is not the short term, but what happens next.
Sinofsky knows a thing or two about this. As a long-time Microsoft employee and former head of Windows and Office, he’s overseen two of the largest sustainable engineering projects of the past 30 years. He touches on an important point here that I agree with: at first, remote working can seem to work very well.
Anyone can work remotely for a few weeks, or on one small project. Sustaining a high-quality work ethic remotely over time is very difficult. I previously mentioned that my company has had good success with remote working, especially in engineering talent. The reason I think we’ve been successful: we’re a services agency and work on many new projects each year with small, focused teams. We are in the exact sweet spot Sinofsky alludes to where the workload is new, the team is typically always in the ‘initial run’ and we’re all working towards a concise common goal. Our formula and business model fit well with remote working but, as Sinofsky clearly notes, this doesn’t mean it works for every business and every model.
Collectively, I believe that we, the engineering leadership community on the Planet Earth, have done a poor job supporting each other. I think for every manager who has taken the time to find and regularly meet with a mentor, there are 20 managers who like the sound of mentorship, but haven’t done anything about it because they have no time. And even if they did, they wouldn’t know where to start.
I think that there are well-intentioned HR teams who are building leadership training without partnering with their engineers. Similarly, I think there are legions of engineering managers who have been asked very politely by their HR teams to partner on building said programs and those managers have politely and repeatedly said, “I’m too busy.”
I blame everyone. We can do better.
Rands nails it again. And, he proposes a simple survey to research and mine for solutions. I’ve filled in my response.
Paul Graham’s latest thought-provoking essay has touched a nerve in some circles. His basic premise is spot on:
The US has less than 5% of the world’s population. Which means if the qualities that make someone a great programmer are evenly distributed, 95% of great programmers are born outside the US.
The solution to this dilemma according to Graham: Let’s reform immigration to “let” these programmers in so that they can be in San Francisco. I’m paraphrasing the last part a bit, and Graham doesn’t come out and say as much, but this is what is being implied.
Almost everyone agrees that immigration policies need some work in the United States. I also believe that we’re only hurting ourselves by refusing to allow talented people to legally enter our country.
Graham’s point is valid, but he misses on one mark that Matt Mullenweg, creator of Wordpress and famously remote-only Automattic, writes this week:
If 95% of great programmers aren’t in the US, and an even higher percentage not in the Bay Area, set up your company to take advantage of that fact as a strength, not a weakness. Use WordPress and P2, use Slack, use G+ Hangouts, use Skype, use any of the amazing technology that allows us to collaborate as effectively online as previous generations of company did offline. Let people live someplace remarkable instead of paying $2,800 a month for a mediocre one bedroom rental in San Francisco. Or don’t, and let companies like Automattic and Github hire the best and brightest and let them live and work wherever they like.
Graham’s basic premise is solid, and I completely agree with it. However, I’m with Mullenweg and most of the related Hacker News thread that people should be able to live where they are happiest, and work remotely.
Over the past year, I’ve worked with many people in our Dallas home office. In that same time period I’ve worked with people in Argentina, Germany, London, Canada and a half-dozen other states outside of Texas. We’ve sponsored visas for some and have just worked with others on a contract-basis. We use many of the technologies that Mullenweg mentions: Slack, Google Hangouts, Skype, Screenhero and good old-fashioned phone calls. It works great. We ship software, we produce great work for our clients and we don’t rely heavily on finding perfect people just in one town of one country.
We’re lucky to have a strong base of great people in one location, but we wouldn’t be the company that we are today without great people outside of our base.1 One of the reasons a small shop with a quirky name in Texas can compete with much larger companies is because we’re not biased by where we find great people. We’re not limited by what’s in our backyard and we hire the best people we can find.
Immigration policy needs reform in the United States, yes. But let’s not wait for that to happen to start hiring great people from around the world. Great people are out there today and they’re ready to make companies awesome.
Speaking of Amazon, The Verge’s piece on its hardware design lab is a good look into one of the least seen aspects of the company. It also has a nice history lesson of the Kindle:
It’s been a decade since “Fiona” was first imagined, the codename Amazon gave to the first iteration of the Kindle. As recounted in The Everything Store, Brad Stone’s rollicking 2013 history of Amazon, Jeff Bezos commanded his deputies in 2004 to build the world’s best e-reader lest Apple or Google beat them to it. To Steve Kessel, who was put in charge of running the company’s digital business, Bezos reportedly said: “I want you to proceed as if your goal is to put everyone selling physical books out of a job.”
It took three years for Kindle to come to market. The first model wasn’t particularly beautiful: a $400, off-white chunk of plastic with a full QWERTY keyboard. But before the world had ever heard of an app store, Amazon had integrated its bookstore directly into the device. For the first time, you could summon almost any book you could think of within seconds, no matter where you were.
The accompanying photography is also great. They, of course, do not reveal anything secretive or particularly groundbreaking here but a glimpse into the secret labs of large technology companies is always of interest.
I have no major complaints on the Kindle hardware, but its software still leaves much to be desired. It’s encouraging to see so much research being performed on the tiniest details of the hardware, but it would be great to know why the typography and formatting controls are still primitive at best. John Gruber put it best, back in 2012:
Amazon’s goal should be for Kindle typography to equal print typography. They’re not even close. They get a pass on this only because all their competitors are just as bad or worse. Amazon should hire a world-class book designer to serve as product manager for the Kindle.
This entire interview with Jeff Bezos conducted by Henry Blodget at Business Insider is excellent. Some of my favorite parts are where Bezos discusses the public challenges to his company. For example, his viewpoint on the recently launched and less-than-stellar Amazon Fire Phone:
Again, one of my jobs is to encourage people to be bold. It’s incredibly hard. Experiments are, by their very nature, prone to failure. A few big successes compensate for dozens and dozens of things that didn’t work. Bold bets — Amazon Web Services, Kindle, Amazon Prime, our third-party seller business — all of those things are examples of bold bets that did work, and they pay for a lot of experiments.
What really matters is, companies that don’t continue to experiment, companies that don’t embrace failure, they eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence. Whereas companies that are making bets all along, even big bets, but not bet-the-company bets, prevail. I don’t believe in bet-the-company bets. That’s when you’re desperate. That’s the last thing you can do.
According to Cards Against Humanity’s letter to participants, the company bought the island for the following reasons: “1) Because it was funny, and 2) so we could give you a small piece of it. Also, 3) we’re preserving a pristine bit of American wilderness.”
The company also contributed $250,000 raised through the campaign to the Washington, D.C.-based Sunlight Foundation, which promotes transparency in government.
Cool story. Also, check out the wonderful photos and writing over at Everything Will Be Noble about exploring the same island.
Kevin Plank, CEO and Founder of Under Armour, on how the company was named:
My next idea was Body Armor, and I thought that was the perfect name. Back then, it took a couple weeks for the trademark process, and by the time those two weeks had gone by, I had told everybody I was going to name my company Body Armor.
One morning, I got a call from my friend saying we would never get Body Armor, because there were some body shops up in New Jersey and some ballistic vest manufacturers all named Body Armor. I was a bit dejected, but I had lunch plans that afternoon with my oldest brother, Bill. So, I show up to pick him up, knock on the door, and he looks down at me the way only an older brother can look at a younger brother, and he asks, “How’s that company you’re working on, uhh…Under Armor?”
Whether he was just messing with his younger brother or whether he was intentional with it, it doesn’t matter at this point. I cancelled lunch, went back to grandma’s house in Georgetown, filled out the paperwork, sent it to the patent and trademark office, and three weeks later, we were clean and clear.
Oh, and the reason we added the U in Armour is that I was skeptical at the time about whether this whole Internet thing would stick. So I thought the phone number 888-4ARMOUR was much more compelling than 888-44ARMOR. I wish there was a little more science or an entire marketing study behind it, but it was that simple.
Fun story. The entire article is a great glimpse into one of my favorite companies. Looking at today’s sports apparel market, it is hard to imagine a world with just basic cotton t-shirts and gear. What Plank and Under Armour did completely disrupted the entire industry and sent athletic giants like Nike and Adidas back to the drawing board.
Todd Olson, writing on Medium:
The idea of disruptive technology has been with us since Clayton Christensen released The Innovator’s Dilemma in 1997. Since then, we have seen not only major companies disrupted, but entire industries. We have observed incredible disruption in a very short time, but can we learn from this history how to reliably cause disruption? In this regard, I want to examine the premise that:
It is design innovation – not technological innovation – that causes disruption.
Ryan Hoover, Founder of Product Hunt:
Someone at the CMX Summit asked me how we measure the effectiveness of these efforts. It’s hard to quantify but we know these bits of delight have helped cultivate a loyal community of people who have hunted great products and given us great ideas. These small things are important and regardless of its “ROI”, we’ll continue to try to delight those that (quite literally) make Product Hunt.
I love this idea. Yes, you can’t quantify these moments of delight but they can have a profound impact on your business, your culture and how your company is viewed by the world. Being special in your business doesn’t have to be a huge thing. It can be something small like this, but even these small gestures of delight can add up to something great.
Why? I think there are several reasons. One is that being mean makes you stupid. That’s why I hate fights. You never do your best work in a fight, because fights are not sufficiently general. Winning is always a function of the situation and the people involved. You don’t win fights by thinking of big ideas but by thinking of tricks that work in one particular case. And yet fighting is just as much work as thinking about real problems. Which is particularly painful to someone who cares how their brain is used: your brain goes fast but you get nowhere, like a car spinning its wheels.
Startups don’t win by attacking. They win by transcending. There are exceptions of course, but usually the way to win is to race ahead, not to stop and fight.
In the years following the stock market crash of 1929 and during the course of the Great Depression, President Franklin D. Roosevelt delivered a series of radio addresses that became known as “fireside chats.” The goals of these chats were to inform and convince the American public about various concerns of the day, new government policies and the direction of the country during an extremely difficult period of history. After Roosevelt, the radio addresses were not as prevalent or frequent until 1982 when Ronald Reagan began the longstanding practice of a weekly Presidential radio address that is continued today.
The history lesson is an important reminder, but it isn’t the moral of the story. What is the goal of a radio address or fireside chat? It was a time for everyone (with access to a radio) to listen directly to the President discussing the topics of the day. An open and candid conversation1 with all interested parties. We can apply this same concept to the way we work with our teams and in our company.
Several times per year, and usually in 8-10 week intervals, we gather the entire company — in-person and over video chat — to participate in company-wide fireside chats. In larger companies I’ve worked with in the past, these events are labeled as ‘all-hands’ meetings, ‘town halls’ or some other corporate name. We use the term fireside chats. We put a digital fireplace up on the television and talk about everything important to the company.
The content and direction of these chats vary. Often times, there is a new direction in the company, a new venture, a new major client or just some big news. These chats are more one-sided as we explore the vision and ideas behind a new direction. Other times, the chats are a conversation. We’ll email the team a list of questions or topics a few days before the chat, and open it up to the floor. Company news, updates and general questions often follow regardless of the opening format.
The importance of the fireside chats can’t be underestimated. We’re all incredibly busy. We’re building a business, growing steadily and forging ahead into new territories daily. The chats give us a time to — even for a few hours — work on the business instead of always working in the business. Or, put differently, we’re working on our company rather than working on our business.
Working in the business is easy: we plan, design, develop, measure and iterate on software. This is what everyone in the company is good at. This is why we’re here. There are millions of tiny details we can choose to focus on every day. We can busy ourselves with these details and get lost in their mix incredibly easy. If we’re not careful, we wake up months (or years) later and wonder why our business is where it is. It is incredibly difficult to focus on the big picture, and overall company direction when we’re in the weeds.
By focusing during the fireside chats, and the preparation in advance, we force ourselves to focus on where the company is going. Where do we want to be? Can we clearly articulate to ourselves and the entire team what our goals are? What defines success for our business? How do we align everyone with a common goal and direction so we can achieve success?
Yes, these are all-hands meetings. Yes, they take up precious time when we could be building software. That’s exactly the point. If we don’t know what we’re building towards, what things are the most important and what defines success then we’re not aligned and moving towards a consistent vision as a company.
Comparing the day-to-day operations of a small business to the country’s economy as a whole during the Great Depression can be seen as a bit of a stretch. However, it does illustrate the extreme ends of the challenge of unity, alignment and belief in a common goal. Clear articulation of vision, open-communication and focusing ourselves on the bigger picture aren’t lofty goals. Whether it be for a business or an entire country, when we’re working together on a consistent vision, the future is brighter for us all.