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STOK | ORGANIZATIONAL BIOMIMICRY

TABLE OF CONTENTS

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Intro

4

Organizational Structure

6

Team Accountability Roles & Responsibilities

8

PODS

10

Appendix

12

Accountability & Decision Making

14

Transparency

14

Dynamic Governance

15

Compensation

16

Salary Matrix

16

Profit Sharing

17

Human Capital Contribution HCC Survey Questions

POD Responsibilities

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STOK | ORGANIZATIONAL BIOMIMICRY

Employers of the knowledge economy are struggling to attract, engage, and retain next-gen workers on account of antiquated hierarchical organizational models and workplace designs that stifle diversity, productivity and innovation. Further, employers are failing to leverage the intrinsic and accessible motivators that exist within their own personnel. stok has identified a market need for adaptive organizational structures and workplaces, particularly in organizations with next-gen workforces geared towards outcomes that require a high-level of cognitive thinking, collaboration, and purpose alignment.

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As a response to this market need, Organizational Biomimicry was developed as a dynamic tool to enable organizations to value human capital and tap into what, according author Daniel Pink, motivates today’s knowledge worker: Autonomy, Mastery, and Purpose. Organizational Biomimicry redesigns organizations for success and scalability by taking a holistic, selfmanagement, systems-thinking, and biomimetic approach to organizational governance and corporate culture.


SELF MANAGEMENT

DISTRIBUTED GOVERNANCE

Self-Management is the movement away from hierarchy to self-organized peer groups that do not have “managers” or “bosses.” Decisions are made by groups of people using a process called “dynamic governance” rather than by one individual. This maximizes our ability to design creative, high-quality solutions to problems, while empowering each team member to contribute new ideas and solutions regardless of tenure or title.

stok’s founders are driven by two core beliefs: First, that power tends to corrupt, and absolute power corrupts absolutely. And second, at the moment power is given people feel needed and valued, because they are needed and valued. These beliefs drove us to draft an Operating Agreement which dictates a system of distributed governance. This system does away with traditional “bosses” and hierarchy, instead providing team members with structured autonomy, and the ability to achieve mastery while striving for a shared organizational purpose.

This dynamic system allows organizations to be nimble and adapt to new situations much more efficiently than a static pyramid structure that can pigeonhole and create bottlenecks. Instead, each team member has roles & responsibilities that are built upon their individual strengths, interests, and the needs of the company.

While most entities are legally required to designate one individual (Officers) to have unilateral capacity to make decisions, our Operating Agreement delegates the Officer’s authority to self-managed “PODS” which oversee the day-to-day accountabilities of the traditional C-Suite or Corporate Officers.

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STOK | ORGANIZATIONAL BIOMIMICRY

ORGANIZATIONAL STRUCTURE

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PODS

TEAMS

PODs form around critical support functions of the organization, such as HR, Accounting, and Sales & Marketing. They are governed by a selfdrafted purpose, mission, and charter outlining material and fiduciary accountabilities, decision making protocol, and advice structures. PODS set the Standard Operating Procedures (SOP’s) and Key Performance Metrics (KPI’s) to which everyone abides. Any team member has the ability to join a POD which means that everyone has equal opportunity to influence decision making within the company.

Teams form around revenue centers like a service line, a project, or an industry. Teams manage their own P&L’s, make hiring and firing decisions, decide on salaries, and are required to give each other regular, ongoing feedback instead of annual performance reviews. Teams manage their own piece of the business and are supported by PODS. Team members belongs to only one “primary” team but have the ability to work with other teams with a limitless-degree of flexibility. Teams are structured around accountability roles and are held to accountability standards recommended by PODS.

PODs are intended to include team members and provide transparency into decision making, as well as provide a platform for leadership development. PODs are not intended to create opportunity costs associated with revenue-generating activities, which is why each POD elects a Facilitator to manage the workload related to making POD decisions. PODS regularly report out to the Manager who has the authority to rescind a POD’s authority if it fails to perform its delegated duties or to achieve their agreed upon performance targets. 7


STOK | ORGANIZATIONAL BIOMIMICRY

TEAM ACCOUNTABILITY ROLES & RESPONSIBILITIES Under Organizational Biomimicry, many essential business functions such as strategic planning, hiring, and budget management live within Teams. Without bosses or hierarchy, an organization must ensure that these functions are taking place. Therefore, we have defined four essential roles for each Team, each of which is accountable for facilitating decision making in the below realms.

CASH ROLE – REPORTS TO F&A POD • • • • • •

Develop and manage annual Team budget Facilitate weekly Team meetings Ensure Team profitability Plan Team revenue and utilization Attend weekly utilization meeting Ensure Team accountabilities are being met (entering hours, submitting expenses, hitting billable and sales goals)

STRATEGY ROLE – REPORTS TO VISION POD • • • • •

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Develop and implement annual Team Operating Plan Set and manage Team KPIs Determine and facilitate Team Quarterly Priorities Report quarterly at Quarterly Business Reviews (QBRs) Team alignment with 5-year vision


EXECUTION ROLE – REPORTS TO EXECUTION POD • • • • •

Team quality control Service delivery process improvement Cross-team communication and knowledge sharing Deliverable improvement and templatization Team systems and software management

PEOPLE ROLE – REPORTS TO CULTURE POD • • • • • •

Team guidance and mentoring Team Personal Development Plans New hire onboarding Interviewing and vetting candidates Team morale and engagement Facilitate team member corrective action and/or conflict management

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STOK | ORGANIZATIONAL BIOMIMICRY

PODS

Semi-monthly 2-hour meetings

Monthly 2 hour POD meetings Annual 3-Day Retreat Quarterly Strategic Partnership Meetings

PURPOSE

At least one member of the Operations Team Sales + Marketing POD Facilitator Team Strategy Roles

MISSION

Company KPIs Accomplished POD Budget Margin

HOW ARE THEY ACCOUNTABLE?

KPIs

Develop stok’s 5-Year Plan, identify and implement new strategic partnerships and markets, and facilitate and advise teams on their annual operational plans to ensure alignment and cohesion with the 5-Year Plan.

Ensure financial well-being by facilitating company-wide budgetary, reporting, cash management, and tax practices; implementing growth strategy; and developing the business leaders of the organization’s future.

Net Income Months of Cash Fully Billable % POD Budget Margin

WHO IS THERE?

COMPOSITION

To uphold the organizational vision and ensure stok is built for future generations

At least 1 member of the accounting team At least 2 non-accounting team members Manager Team Cash Roles

WHEN?

TIME COMMITMENT

STRATEGIC GROWTH (VISION)

To maintain and grow the value of the company by empowering Teams and PODs to make informed financial decisions.

WHY?

WHAT?

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FINANCE + ACCOUNTING (F&A)


HR (CULTURE)

EXECUTION

SALES + MARKETING (HARVEST)

To make stok an equitable and happy place to work, support the team's wellbeing, implement and continuously improve upon HR processes, champion culture, and establish hiring guidelines.

To ensure client satisfaction, work quality, constant innovation, and Teams hit their annual revenue targets.

To ensure that at any point in which there is interaction with stok, the audience is always impressed and met with absolute sincerity, complete boldness, and utter joy.

Champion an equitable, thriving, and fun culture where our team doesn’t define their jobs as work.

Work with revenue teams to ensure quality work delivery, client satisfaction, work process improvement, and revenue execution.

Establish sales + marketing strategies to empower teams to effectively represent the brand and build valued relationships.

Engagement Survey Score Retention POD Budget Margin

Company Net Promoter Score Company Adjusted Rate % of Matrix Rate POD Budget Margin

Book to Full Utilization % Increase Corporate Client Revenue % Company Increase Repeat Business POD Budget Margin

At least one member from each regional office Team People Roles

Team Execution Roles

Sales Liaisons Sales Coordinators

Quarterly 1-hour meetings Sub-PODS meet as needed

Weekly 1-hour meetings

Weekly 2-hour meetings 11


STOK | ORGANIZATIONAL BIOMIMICRY

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APPENDIX

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STOK | ORGANIZATIONAL BIOMIMICRY

ACCOUNTABILITY & DECISION MAKING TRANSPARENCY Organizational Biomimicry relies on the belief that all stok team members are inherently good, but – like nature – are also heavily dependent on peer pressure. To hold one another accountable, we made just about everything transparent: Salaries, individual performance metrics, even our P&L. In order for self-managed teams to be able to make informed decisions, they have to have information and a supportive knowledge architecture.

BILLING & SELLING GOALS Our two main KPIs for measuring team member success are billing goals and selling goals. Billing Goals are calculated by multiplying each team members’ billable percentage (e.g. 90%) by the number of working hours in a year (1,928) and then by their hourly rate. Selling Goals are a derivative of two calculations. 1. A multiple on team member billing goal which gets larger as salary increases, and assumes that as a team member gains tenure and experience they will build relational capital with their clients to generate repeat business. 2. A multiple of the time spent selling (e.g. 30%), by the working hours in the year (1,928), by a team members hourly rate. The general belief is that if a team member is not billing, they should be selling. As a result, when team

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member’s fall short of their billing goals, their sales goal recalculates to make up for the shortage of billing contribution. Each individual’s performance to their combined billing and selling goals is tracked on the Status Report which is made transparent to the entire company. It is continuously updated with real-time data and is reviewed weekly in each Team’s weekly check-in as well as our company-wide weekly Utilization Meeting.

HUMAN CAPITAL CONTRIBUTION While billing and selling goals are important for covering costs, they don’t measure the long-term value that each of our team members brings to the organization. So, we developed a new KPI – the Human Capital Contribution score. This scorecard, completed by peers, measures qualities that we have determined bring long-term value to the organization, such as emotional intelligence and entrepreneurship.


DYNAMIC GOVERNANCE

1.

Choose a facilitator

3.

Clarifying Questions

5.

Amend & Clarify

7.

Integration

(to manage the process)

Speaking in rounds (go in order, no cross-talk). Anyone can ask questions to better understand the proposal. It’s not OK to use clarifying questions to give an opinion about the proposal. Proposer can say “I don’t know.”

The proposer can (optionally) amend the proposal based on the reactions. It’s not required to address all the concerns and reactions.

The goal here is to amend the proposal to remove Objections. Mostly the objector and the proposer speak, but others can help as well. When all objections are addressed, the Proposal is approved for implementation.

2.

Someone presents a Proposal

4.

Reactions

6.

Objection Round

8.

Closing

Anyone can describe a tension and make a proposal to resolve it.

One at a time, each person reacts to the proposal as they see fit. No response or interruption is allowed during someone’s reaction.

One at a time, the Facilitator asks each participant if they see any reason why adopting this proposal would cause serious or irreparable harm (is it safe to try?). Objections are based on data, facts, evidence as much as possible (not unfounded opinions). Capture the objections – they will be used in retrospectives.

Each person can share a closing reflection to improve future meetings.

*Note – this is a disciplined process. At no time does the process break down into a discussion free-for-all.

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STOK | ORGANIZATIONAL BIOMIMICRY

COMPENSATION SALARY MATRIX We’ve developed equitable compensation guidelines with the hopes of decoupling incentives from compensation. stok takes great care in attracting team members that are intrinsically motivated by autonomy, mastery and purpose, not extrinsically motivated by stuff like money and status. At stok we like to think of money as the air that we breath, but not a reason for living. Money is very important, but it’s not everything; not even close. The compensation guidelines are designed to foster salaries that are market-competitive, and meet your human needs. The goal is for you to be passionately engaged in mastering your craft, not worrying about money. The guidelines also remove negotiations from the compensation discussion to remove systemic bias, foster equitability across like-for-like skill sets, and level the playing field for different communication styles. The Salary Matrix is a tool used in the hiring process to determine salaries for team members that are new to stok. It’s developed to maximize purposeful impact, engagement, and optimum results; to provide standardized guidance to decision making teams; and to provide more transparency into a traditionally ambiguous process. The Salary Matrix provides qualifying guidelines which are intended to be just that, guidelines for objective consideration,

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as opposed to hard and fast rules. That said, there will always be some degree of subjectivity to salary decisions, because each stok team member’s contribution to the organization is unique, and there is no “one-size-fits-all” approach that works for everyone.

Each Tier contains qualifying guidelines intended to stimulate critical thinking. and are, in no particular order: • Years of experience • Billable rate on projects • Educational level achieved (Bachelor’s degree vs. Masters) • Certifications e.g., CEM, PE, LEED AP • Job Responsibilities and Accountabilities The salaries listed on the Matrix are based on San Francisco wages. To account for our team members in other geographic areas, we have implemented a cost of living multiplier. Team members in high cost of living locations will make 100% of San Francisco salaries, average cost of living locations make 90% of San Francisco salaries, and low cost of living make 80%. These multipliers allow us to be simple and flexible with salaries while ensuring that our team members continue to make competitive wages and afford a high quality of life regardless of where they are working from.


PROFIT SHARING The Membership and Distributions POD is tasked with creating an equitable, transparent, and objective process for deciding who becomes an owner, and how to distribute company profits to employees and investors. MAD POD has determined that “Bonuses” as incentives are not in alignment with our core values. Instead, the MAD POD designed a profit sharing system to maximize purpose, in addition to profits, by rewarding Human Capital Contributions (HCC) which deliver long-term value to the organization. Profit Shares are distributed on an annual basis and are decoupled from the Qualifications & Responsibilities in the Salary Matrix.

MAD POD will determine a cutoff threshold for HCC and for Billing & Selling Goals. Anyone who falls below this threshold is not eligible for a profit share that year. However, if an individual is below the cutoff threshold for one factor, but above the threshold for another, they will be eligible for a portion of the profit share based on their individual weighting.

Team members’ percentage of the Profit Distribution pool are determined by two factors - HCC Score and ability to achieve Combined Billing & Selling Goals. In the future another factor – Net Promotor Score (client satisfaction) – will be incorporated as an additional factor. These factors are weighted on an individual basis. While there are guidelines for these weightings based on Role within the company (e.g. HCC is more heavily weighted for Operations team members, while Billing & Selling Goals are more heavily weighted for Consultants and Sales Liaisons), the Team Coach and Facilitator may decide to change an individual’s weighting during salary conversations. Profit Distributions for Operational Team members with minimal or no billing or selling goal are subject to additional factors like ability to manage POD budget margins, or achieve annual performance targets.

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STOK | ORGANIZATIONAL BIOMIMICRY

HUMAN CAPITAL CONTRIBUTION We developed the Human Capital Contribution scorecard to measure the individual qualities that contribute long-term value to our organization. These qualities fall into 6 categories: 1. Emotional Intelligence (EQ) 2. Effective Communication 3. Work Style 4. Guidance 5. Relationships 6. Entrepreneurship Tailoring the Human Capital Contribution survey questions around the values and Human Capital Characteristics identified by stok ensures that individuals within this organization will grow and contribute to the long-term strategic vision of the organization. Each team member’s Human Capital Contribution (HCC) to stok is evaluated twice a year via a survey completed by five peers that they work closely with. HCC data is kept anonymous to the recipient, but team members are provided with comparative demographic analytics. The HCC scorecard results will be used as a guiding principle to examine how individuals are adjusting to the continual peer feedback they receive throughout the year. The scorecard will also be used annually by the Membership & Distributions POD to determine profit distributions to team members and to determine which team members will be offered equity ownership in stok.

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HCC SURVEY QUESTIONS EMOTIONAL INTELLIGENCE (EQ) IQ is often seen as the most important factor in determining a person's potential, but at stok we believe EQ is even more important. Highly emotionally intelligent people are aware of their own emotions and have the ability to manage their stress levels and adapt to change. They are also tuned into others' emotions, leading them to be more empathetic, supportive, and understanding of their team members' needs. • Does this person consistently bring optimistic warmth to their interactions and attitude at work? • Does this person effectively manage their stress levels and maintain their emotional well-being while coping with high work demands? • Does this person effectively and appropriately control their impulses and emotions? • Does this person sense others’ feelings and perspectives and take an appropriate interest in them? • Do you feel comfortable approaching this person with problems, concerns, opinions & new ideas? • Does this person give and receive guidance & feedback with humility? • Does this person adapt to new or difficult situations with flexibility, willingness and a positive attitude?

EFFECTIVE COMMUNICATION We communicate internally with each other and externally to clients and partners every day via email, phone, written reports, and in-person conversations. Effective communicators are able to relay information in clear, simple, and concise terms. They are also good listeners; really hearing what the other person says instead of waiting for them to finish talking so they can say what's on their mind. Most importantly at stok, effective communicators are authentic to their true selves and don't try to portray themselves as someone they are not. • Does this person practice active listening during conversations and discussions? • Does this person write in a succinct, but impactful manner? Do they avoid lengthy or wordy explanations when necessary? • Does this person verbally articulate ideas in an easy to comprehend manner? • Does this person actively and appropriately express insightful opinions? • Does this person communicate with transparency and honesty to both team members and clients?

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STOK | ORGANIZATIONAL BIOMIMICRY

WORK STYLE stok's thoughts on work style can be summed up in one word - grit. One of stok's Core Values, grit is the perseverance and passion for long-term goals. Someone with grit will work tirelessly to complete the task at hand because they are driven by a core purpose and passion. They also have an insatiable desire to learn and improve. At stok we also strive to incorporate the concept of "blending" or "flow" which ultimately goes beyond creating work-life balance, and seeks – through structured autonomy - to make work feel like play. • Does this person consistently support their team members in an accountable, reliable and timely fashion? • Does this person consistently produce high quality work? • Regardless of the size of the task, is this person always looking to improve and learn? • Does this person consistently demonstrate grit for achieving stok’s vision?

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GUIDANCE Leadership is mentorship in action, and mentorship is powerful and incredibly useful in professional development. Everyone at stok is a leader or mentor in their own unique way. Successful leadership requires having a vision, sharing it with others, acknowledging opportunities and challenges, and engaging others to make the vision a reality. This also requires both parties to be vulnerable. As mentors, we need to explain that success is not a linear path—and that’s okay. As mentees we need to be willing to share the experiences we’d rather keep to ourselves. • Does this person provide SMART & useful guidance to you? • Does this person appropriately and consistently invest time and effort to share their technical expertise with you? • Does this person appropriately and consistently invest time and effort to foster your emotional and personal growth? • Does this person inspire and motivate you to always be improving and to become the best version of yourself? • Does this person provide feedback in an appropriate and consistent manner that recognizes your communication style and comprehension level?


RELATIONSHIPS Relationships, both internal and external, are the foundation of our company. Identifying, developing, and maintaining impactful relationships with clients, partners, and potential new hires requires the ability to make deep connections and be consistently responsive and attentive to requests. Since we're a family, it's also important to develop meaningful relationships internally, support one another, and collaborate and embody stok's purpose. • Is this person consistently responsive and attentive, with a willingness to help coworkers with undertakings indirectly and directly related to their role? • Does this person consistently identify, develop and maintain measured impactful relationships with high quality clients? • Does this person consistently identify, develop and maintain measured impactful relationships with new hires / potential talent? • Does this person consistently identify, develop and maintain measured impactful relationships with high quality partners and vendors? • Does this person form meaningful and impactful relationships with others at stok?

ENTREPRENEURSHIP Embodying the traits of an entrepreneur maximizes the potential longevity of stok's growth and adaptability as we strive to reach our vision. A great entrepreneur can take an idea with moderate potential and transform it into something legendary. Contrary to popular belief, you don't have to be "Type A" or an extrovert to show entrepreneurial traits. Everyone at stok should rely on their own personality and natural instincts in developing their own style of entrepreneurship. • In a positive and productive manner, does this person challenge the status quo / business as usual in the pursuit of stok’s vision? • When identifying problems, does this person consistently propose solutions? • Does this person propose solutions that are creative, innovative and in alignment with the organization’s vision? • Is this person proactive instead of reactive? • Does this person exhibit self-control and resilience when faced with challenges, fears and setbacks? • Is this person a systems thinker?

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STOK | ORGANIZATIONAL BIOMIMICRY

PODS RESPONSIBILITIES, ADVICE + IMPLEMENTATION STRUCTURE FINANCE & ACCOUNTING RESPONSIBILITIES

ADVICE FROM

IMPLEMENTER

401k Offering Operating Margins Accounting Methodology Banking Institution Single Expenditure < 10% of Total Assets Annual Expenditure < 50% of Total Assets Tax Distribution Issue equity to non-employees < 2% of enterprise valuation Stock valuation methodology Redeem or Repurchase Equity up to 2% of enterprise valuation Wind up affairs of Company in Dissolution

Culture Manager Bank/CPA Manager Manager Manager CPA Manager Manager Members Legal Counsel

Operations Team Operations Team Operations Team Operations Team Operations Team Operations Team Tax Matters Partner Operations Team Operations Team Operations Team Operations Team

SALES & MARKETING RESPONSIBILITIES

ADVICE FROM

IMPLEMENTER

Sales reporting process Brand guidelines Marketing Strategy

Members Vision Vision + F&A

Operations Team POD Facilitator POD Facilitator

ALIGNMENT RESPONSIBILITIES

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Oversee Implementation of POD strategic plans and charters Vet strategic POD hires Process for org structure changes to PODS, Teams, Task Forces Execute the Manager responsibilities from the Operating Agreement Role definition process + ensuring PODS are following Termination of employees Prioritize stokâ&#x20AC;&#x2122;s Functional Accountabilities Manage master schedule

ADVICE FROM

IMPLEMENTER


CULTURE RESPONSIBILITIES

ADVICE FROM

IMPLEMENTER

Conflict resolution Human Capital Contribution Hiring guidelines Non-401K benefits offerings Social & environmental impact assessments Performance evaluation process Professional development guidelines Team member handbook Compensation Guidelines

Consultant F&A Members F&A F&A, Harvest, Vision Consultant Members Legal counsel F&A

POD Facilitator POD Facilitator Operations Team Operations Team Operations Team Operations Team Team People Roles POD Facilitator Operations Team

STRATEGIC GROWTH RESPONSIBILITIES

ADVICE FROM

IMPLEMENTER

5-Year Strategic Plan Team annual operating plan process Strategic partnerships & new market development

F&A + Harvest F&A Members

Operations Team POD Facilitator Task Forces

EXECUTION RESPONSIBILITIES

ADVICE FROM

IMPLEMENTER

Service Delivery Process Improvement process Team systems & software procurement and management Team Quality Control guidelines

Knowledge Manager Knowledge Manager Knowledge Manager

Team Execution Roles Team Execution Roles Team Execution Roles

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