Fry: The company built on absolute trust

Moving to a hybrid working model relies on high levels of trust. One very unusual UK software company has been giving its people total freedom to self-manage since it started. Could Fry be a model for more organisations in the future?

Jess Stillman

When COVID-19 first emptied offices and sent most companies scrambling to figure out new ways of working last spring, Fry, a global organisation that develops exam and CPD software for universities and researchers, wasn’t disrupted much at all.

“To be honest, COVID didn’t make any real difference in terms of how we operate,” says Zahid Malik, chief executive of the company, which is headquartered in central London.

Zahid Malik, chief executive at Fry

It’s an unusual paradigm, and Malik is open about the significant challenges involved, but it’s also a way of working he hopes to see more organisations embrace as they find their way to a new, post-pandemic “normal”.

Since its inception, Fry has been operating under the principles of maximum transparency and employee self-management

That’s because since its inception, Fry has been operating under the principles of maximum transparency and employee self-management. Since the mid-2000s, when the business started to grow from a small consultancy to the 40-person firm it is today, staff have been free to choose when and where they work, how much holiday time they take, and even, largely, what they work on. The company’s books are open to all employees (including salaries), and 25 per cent of profits are split equally among employees.

How this experiment in radical trust began

Like many entrepreneurs, Malik started his company to fill a need he himself experienced. As a young researcher, he came across the works of Brazilian industrialist Ricardo Semler, management thinker Frederic Laloux and Dutch entrepreneur Jos de Blok. All three described a radically open and co-operative way of working, where, rather than receiving top-down orders, employees decide together what to work on and take responsibility for executing these plans with minimal rules.

Ricardo Semler’s autobiography Maverick sparked Malik’s interest in democratic corporate models

“I thought, if I ever do go into business, this would be a great kind of company to work in,” Malik recalls. There was one small hitch. “I couldn’t find a company that worked like that, not in those days. So I thought, well, I’ll set one up.”

Setting up a self-managed company is the easy part

Implementing fry’s founding principles of trust and transparency has been a work in progress ever since. “It seems like it should be a straightforward way of doing things, but actually it’s incredibly hard,” Malik admits. One of the biggest challenges isn’t stopping employees from slacking off. It’s ensuring they don’t overwork.

“People honestly work too hard and they burn out,” Malik claims. At traditional companies, employees often feel like they’re working for their boss or for the larger machine. Taking time away feels comfortable. But under self-management, employees work closely in small teams. As a result, taking time off can feel like letting down your team. Without guidance about when to switch off, people end up working more, not less.

“What we’re moving to now, especially as we’ve been growing, is putting some boundaries in place to protect employees and the business as well, because if people are burning out, then that’s not good for the business either,” Malik says.

As the firm has expanded, planning and priority-setting have had to evolve. When Fry was smaller, individual teams decided what to work on based on customer feedback. But as the company has grown – and especially during the pandemic, which caused a huge spike in demand for Fry’s products – deciding which customer requests to act on first proved more challenging. Even so, Malik remains committed to self-management and is in the process of updating the firm’s decision-making systems.

He drew inspiration from an unlikely source: Amazon. While the e-commerce behemoth might be known for its tight management, it’s also intensely customer-focused, with small, innovative teams (founder Jeff Bezos’s “two pizza rule” forbids any team from being so large that two pizzas can’t feed the whole group). Amazon manages this tension by having teams write long memos explaining what they want to work on, which are discussed intensively before being greenlit or shelved.

As well as small, innovative teams, Amazon’s success is also built upon micromanaged warehouse workers and delivery drivers

Fry is experimenting with something similar. “If you want something done to the product or features, you have to write down in detail what should be done and why, and then that gets discussed every month as a group,” Malik says. Executing this new system is a work in progress. “I don’t think we’ve got it 100 per cent right yet,” Malik adds, but the system, however labour-intensive, has the significant advantage of allowing frontline workers, who are actually closest to customers, to make decisions about what will best serve them.

Will self-management catch on in the post-COVID world?

With all these challenges, does Malik sometimes pine for a more traditional management structure? Not at all. Instead, he’s hoping to see more organisations and managers embrace self-management after the disruptions of the past few years.

It’s very difficult for your ego when you start moving away from being included in everything and asked for decisions

COVID-19 has highlighted the ability of most knowledge workers to manage their time and get their work done outside the office. Malik is hopeful that managers will extend this lesson in trust as more employees filter back to the office.

“You can probably take a risk and say, well, certain things, within certain limits, let people decide on what they think is best. On the whole, we find that trusting people works really well. What you don’t want is to have an organisation that is geared around that one per cent of people who might abuse the system, because then you’re sending a really terrible message to everyone else. Give people that space and they will absolutely rise to the occasion,” he says.

But he also offers a cautionary note to managers. “It’s very difficult for your ego when you start moving away from being included in everything and asked for decisions. Suddenly people start doing more things themselves and you’re less involved. You have to learn to adapt and find something more useful to do so.”

If you can let go of some control and take a step back, Malik believes the effort is well worth it. “You’re just going to get better work from people if you start adopting more of these ways of working,” he says. The post-COVID reshuffle might be the perfect opportunity for more managers to find out if he’s right.