John Tornow
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January 24, 2015

A Year With Unlimited Vacation

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 knows 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.

Unlimited vacation isn’t truly un-limited and the term is misleading. If someone decided to never work in 2014 this would obviously be a problem. I’m using the term ‘unlimited’ lightly and would prefer to call the time ‘uncapped’ or ‘open’ vacation, but the industry term for what is meant is ‘unlimited vacation’ so I’m sticking with that. ↩︎

The only minor clause was that we asked people to check with their project teams before taking an extended period of time off and to be mindful of taking time off during major releases or significant project milestones. ↩︎

We’re mostly a consulting services-based company, and therefore all employees and contractors are required to track hourly time. Tracking time isn’t anyone’s favorite activity, but it is a necessary evil in our industry. The added benefit of having such accurate time data, is looking back in the aggregate to see where vacation time was taken and how that affected our business. ↩︎

Hiring new people presents an interesting challenge with this vacation policy. Sometimes new people want to take a few weeks of time before starting a new job. Other times new employees have previously scheduled vacations and we always accommodate the time even for someone just starting out. This presents some opportunities for abuse in the event that someone doesn’t work out in the long term. In theory, someone could begin work, take a bunch of vacation time and not pan out. I see this as low risk, but worth noting. We do our best to ensure a great fit for new people before they begin at the company, but there are always exceptions. ↩︎

December 31, 2014

Great People Everywhere

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. 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.

November 23, 2014

Fireside

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.

“Conversation” is a stretch. These were one-sided radio addresses. ↩︎

October 21, 2014

The Mediocrity Magnet

Creating special work is difficult. Special work requires extra drive, effort and fortitude. But there is an unseen force inside every one of us that drives us away from greatness, away from something exceptional and away from special work. I like to call this invisible force “The Mediocrity Magnet.” This magnet is constantly pulling on us as we try and create something new. It is pulling us away from the exceptional, and back towards our normal default of comfortable decisions, stagnant innovation and the desire to fit in with those around us.

Creating exceptional software is especially hard. Design, engineering and product leadership all have to be working at a consistently high level. The Magnet may be invisible, but it isn’t hard to see. It can start with simple corner-cutting like, “we’ll figure out a better way to do this in v2,” or “this is super hacky, but it works” or more commonly “let’s just use what those guys did and that should be fine.” Fine. It sounds like a reasonable goal, and sometimes it may be. But exceptional software is created by resisting this force, and not settling for “fine” or good enough.

The main goal of a product lead, especially in software, is to be a constant force against the Magnet. When immersed in a text editor or Photoshop, developers and designers can easily get lost in the mix of the nitty-gritty details of a product. The details are incredibly important. But product leadership needs to rise above the details and understand what is truly great and what simply meets expectations. A product lead needs to constantly rebel against the pull towards normal to keep everyone working towards something great.

How do we fight this Magnet of Mediocrity? How do we keep ourselves from settling for “fine” as we make decisions about a product’s future? The answer is to constantly ask questions.

How can this be better?
What are we not thinking of?
What can we strip away to get to the core of the problem, while surprising and delighting our customers?

And, most importantly:

What about this product is special?

Special is not doing things the way everyone else has done them. Special is not accepting the norm. Special is taking the long route, but hopefully the one that is most rewarding in the end. If we’re constantly asking ourselves and our teams “what is special” about what we’re doing, we can fight the Mediocrity Magnet that pulls us all away from our real goal: special work.

October 8, 2014

Ello and the Minimum Desirable Product

Ed Cumming, writing for The Guardian:

Perhaps the most interesting thing about Ello’s emergence has been how little time it has taken for people to be rude about it. If you can’t be an early adopter, be an early denigrator. Criticisms emerged about how private it really was and bugs in the system. The founders admitted to being surprised by the level of interest and were at pains to explain it was still in beta-testing and far from the finished product.

We’ve been chatting about this at the office for a few days, and there is an interesting consensus building: First, it is clear that a lot of people are clamoring for replacements of Facebook and Twitter. Second, it is clear that the expectations of what most of the attempting start-ups call a Minimum Viable Product is really not viable at all. In fact, in Ello’s case, it falls far flat of public expectations.

What the public seems to define as an acceptable starting point, the Minimum Desirable Product, is much more than has been attempted so far. If we’re going to get the next wave of social networking upstarts, the bar is set far above the basics of messaging and friends lists.

And really, if you launch a social networking platform without a native mobile (especially iPhone) experience, you’re just too far behind to even consider.

Ello shows us that these upstart social attempts are far from perfect, but here’s hoping these startups keep trying and eventually we can break away from two monster social networks and have more great options to choose from.

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