Interview with the quantifly CEO:
Is meritocratic entrepreneurship the future?
Can you imagine a work environment where you can express every opinion, while still knowing exactly what others think of you? Although it seems completely impossible at first glance, transparent and open communication is already accepted in many companies and countries, where it enables exceptional results. We also include this way of meritocratic entrepreneurship in our own activities, as our founder and director Luka Pregelj is an advocate of meritocracy and actively includes its principles in all aspects of his life.
Scientists at the Massachusetts Institute of Technology (MIT) have discovered that the main factor of a successful team is communication between individuals. This has such a strong impact on their success that experts have been able to predict the best team based solely on communication data, without ever getting to know them. However, the experts estimate that between 20 and 30% of people lack full transparency and the meritocratic way of governing does not suit them. Those who accept it, however, stay with companies for decades. There is a lot of data that speaks in favor of meritocracy and meritocratic entrepreneurship, so we asked Luka Pregelj to tell us a bit more about it in our interview.
1. How would you describe and measure a successful team?
We need to know that the team is marked by a goal. And the success of one team, which is its ability to achieve a certain goal, depends on the quality of each individual in the team and the cooperation between them. Two factors are essential for cooperation:
● The quality of relationships between individual team members - in order to be connected to each other, it is necessary that team members take care of quality communication. Only when the quality of communication between members is high enough can we talk about the effectiveness of individual teams (which can also be predicted).
● Roles in the team - Every team needs a coordinator, a strategist, a visionary and others. These are roles that can be measured and expressed intensely on each individual. When creating teams, the ideal balance of these roles in the team is always sought. We can also quantify them and in this way we can predict how effectively a team works.
The distribution of roles and communication between team members are therefore important for a successful team. The quantifly diagnostic tool allows you to analyze teams, their members and their dynamics. With our analysis, you will improve the performance of teams and get closer to meritocratic entrepreneurship.
2. The Harvard Business Review described group formation as a science, not an art. How does the quantifly team view group formation and where do you think it belongs?
It certainly belongs to science. For our part, we recognize that feelings and soft skills are difficult to label as science, but they play a role in group dynamics. However, we believe they can be tested and analyzed. There are scientific methods, such as sociometric analysis and various analyzes of group dynamics and social networks, with which we can measure group formation and determine how a group behaves.
3. Meritocracy is based on individual achievements, entrepreneurial ideas and innovation. How can we measure them and how do you understand them at quantifly?
One has to be quite resourceful in approaching the foundations of meritocracy. One of the things we use a lot is interdepartmental collaboration. The quantifly analysis would be impossible to set up without constructive collaboration between data analysts, mathematicians and statisticians, psychologists and people like me who have experience in practical entrepreneurship. Each of us contributes one part. Someone suggests a solution and then we choose it very meritocratically. We often put different solutions next to each other and in case of disagreement we test each of them. Based on the quality of the data we receive, we find the best solution. In this way, we objectify the solution and attribute the credit to the individual who proposed the chosen solution. Therefore, we reward the chosen individual accordingly.
In our work, we also take into account the principles of the meritocratic approach in decision-making or the formation of ideas, which are emphasized by Ray Dalio, where every action has its own weight. I strive more and more towards pragmatism, while psychologists lean more towards professionalism. When we are trying to find a better solution, we give more and more weight to a particular page according to the content of the problem. If it requires more professionalism, we give more weight to the solution of psychologists and if it is a more pragmatic solution, we give more weight to my solution. In this way, we also decide which solution will be tested first. We measure our efficiency mainly by effect. We determine in advance what is supposed to happen and what our goal is so that we implement the solution later on and see how close we are to the set goal. If we have achieved our goal, it is quite easy to determine the effectiveness of the idea. In this way, we make decisions in a completely meritocratic way and make sure the opinion of authority never prevails in our company.
4. How does quantifly / cirriosoft follow the principles of meritocratic entrepreneurship in other ways?
We are extremely transparent in our communication with each other. We also performed a quantifly analysis within our team. The final results were explained by the management to everyone. We spoke openly about their implementation and about ways to improve the company in the future. We did this primarily because success depends on each individual and their confidence in meritocratic entrepreneurship.
We are also extremely honest in our communication. If anyone does not like something, they are invited to point it out. We tell each other things honestly and in this way we avoid or prevent unwanted reproaches or actions. The saying that sums it up well is “SNAKES HIDE IN THE TALL GRASS” - meritocratic entrepreneurship removes that tall grass. We can observe who works for the good of the group and who works only for their own interest. Together, we are much more efficient because it is immediately clear to whom the success of a company is not primary.
5. How does quantifly help companies to operate more meritocratically?
We first measure the communication aspect of a particular team and the dynamics between members. What follows is an analysis of the company’s culture, where we look at the structure and distribution of roles in the team. In this way, we enable the company to make connections between employees more transparent, which follows the principles of meritocracy. We see employees as numbers and not with feelings or affection. In this way, we approach the formation or restructuring of a certain team in a more transparent and objective way. This enables a more meritocratic division of roles on the basis of concrete objective measurements.
6. Some critics of meritocracy point out the unequal access to education, leaving the same »elite« in leadership positions. How could this be avoided?
I myself do not believe that access to education is as limited as it used to be. Access to education is possible, but access to knowledge is not. Every individual can get a huge amount of content online for free and in this way get an education in almost any field. There are also many qualified programs or (free) programs from prestigious universities online. Therefore, I believe that this objection or criticism of meritocracy is quite outdated in the 21st century.
7. What are the most common tips you present to companies to better follow meritocratic entrepreneurship? What problems or obstacles do you most often identify with the quantifly analysis?
A widespread problem is that companies are protective and do not want to disclose the results of the analysis to their employees. Especially not in the way I described earlier with our team. We encourage them to present their analysis, perceived problems and the measures they will implement in their business in the coming months. To be even more specific, the most common problem is also that companies are growing faster than management is able to adapt. That is, as the company culture is able to adapt.
We also encourage individuals to be presented with individual reports and are also asked for their opinion - what surprised them, what they expected, what they would like to improve in the near future to get a better result in the next analysis. Thus, we are building a culture of transparent communication, which is the basis for meritocratic entrepreneurship.
8. After the analysis, the call center unified their lunch break, which greatly improved the productivity and effectiveness of the teams. Based on your experience and the quantifly analysis, can you suggest any other concrete way to improve communication and relationships between team members?
Most of the time, we only discern where the problem lies. We always put our advice in context only during our meeting with the client, where we can discuss the real possibilities and ramifications of introducing certain changes. In this particular case, they have busy workers who have almost no time during the workday. In the long run, the company needs to recognize this and unburden the team to a certain degree.
Our job is to find out what the problem is in a certain company, offer a general solution and come up with concrete solutions during the conversation with the client. They are then responsible for the implementation and we are responsible for the re-analysis where we check the effectiveness of the measures.
Do you also want to take a step towards meritocratic entrepreneurship and introduce transparent communication in your company?
With the quantifly diagnostic tool for HR analytics, you can improve communication in your company, solve problems according to the principles of meritocracy and improve the productivity of your employees.
Book a presentation
MERITOCRACY - It is a social system in which the talent and effort of an individual count. In meritocracy, individuals are rewarded based on their abilities, which are visible from their past actions (Termania).
SOCIOMETRY - Sociometry is a technique that basically derives from social psychology and sociology and represents one of the newer measurement methods used in the social sciences. With this technique we want to measure the social relations in a group (connection between individuals in a group) and the position of each individual in a group. It defines how popular or perhaps excluded, lonely an individual is in a group, to what extent they do not understand the members of the group and whether he or she likes to socialize with them or not (Kajtna, 2009).
3 principles of a successful company according to Ray Dali:
- Focus according to your inner nature
- Build a life machine from start to finish (in five steps)
- Harness the power of complete transparency
Principles and culture (n.d.). Bridgewater. Retrieved from https://www.bridgewater.com/principles-and-culture
Pendtland, A., S. (2012). The New Science of Building Great Teams. Harvard Business Review. Retrieved from https://hbr.org/2012/04/the-new-science-of-building-great-teams
Merše, P. (30.6.2021). Meritokracija in družba znanja: Kako bi meritokracija Sloveniji lahko pomagala k napredku? Domovina. Retrieved from https://www.domovina.je/meritokracija-in-druzba-znanja-kako-bi-meritokratski-nacin-delovanja-sloveniji-lahko-pomagal-k-napredu/
Rana, Z. (12.1.2018). The founder of the world's biggest hedge fund has 3 principles to create a more successful life. Insider. Retrieved from https://www.businessinsider.com/ray-dalios-3-principles-to-create-a-more-successful-life-2018-1Terminološki slovar vzgoje in izobraževanja?amp
Termania - Terminološki slovar vzgoje in izobraževanja (2022). Retrieved from https://www.termania.net/slovarji/terminoloski-slovar-vzgoje-in-izobrazevanja/3475017/meritokracija
Kajtna, T. (n.d). Sociometrična preizkušnja. Retrieved from https://www.os-vperka.si/upload/files/sociometrija-09.pdf
Adam, F. and Gorišek, M. (2020). Meritokracija med mitom, normo in realnostjo. Družboslovne razprave, 36 (94/95), 217-238.