Codewave: A Pioneer in Design Thinking, AI & Culture
Codewave is reshaping the software development industry with its radical approach to organizational design. By embracing self-management and radical transparency, Codewave empowers employees to innovate and lead, creating a workplace that thrives on autonomy, trust, and collaboration. In this article, we explore how Codewave’s unique organizational structure, culture of profit-sharing, and commitment to employee autonomy have made it a pioneer in the world of modern business.
This blog post is part of 50+ case studies of self-managing organizations we created for the 2024 inaugural ZeroDX awards. These organizations embody the principles of RenDanHeYi in their work structures:
Zero Distance to customer: Decision what to build is based on insights from the marketplace
Autonomy: Small teams with full decision-making autonomy enable speed in execution
Shared Rewards: Everyone in the micro-enterprise participates in its financial success.
Introducing Codewave: Pioneering Self-Management in Software Development
Codewave, a design-led technology development services company founded in 2013, is transforming the software development industry with its radical organizational model based on self-management and radical transparency.
The company’s commitment to principles such as authenticity, transparency, empathy, teamplay, and self-management has created a thriving ecosystem where employees are empowered to innovate, lead, and create meaningful impact. By eliminating traditional managerial hierarchies and placing immense trust in its people, Codewave has seen negligible attrition rates, high customer satisfaction, and a deeply engaged workforce.
Their unique organizational design, "Org as a social network," devoid of traditional managerial hierarchies, places immense trust and autonomy in the hands of its people. This bold approach has led to negligible attrition rates, high customer satisfaction, and a culture deeply loved by its employees.
Over the years, Codewave has completed over 400 digital transformation projects across more than 15 industries, serving a diverse clientele that includes VCs, startups, SMEs, and governments. With a global presence and teams based in multiple delivery centers across India, Codewave continues to expand, demonstrating the power of its self-management culture in driving growth and innovation.
Culture of Self-Management at Scale
At the core of Codewave’s unique organizational structure is the Be Your Own Boss (BYOB) framework. This self-management system gives employees full autonomy over their roles, responsibilities, and career growth. Project opportunities are openly shared, allowing individuals to pursue work that aligns with their passions and expertise. This approach extends to team formation, where employees select their collaborators and define their own goals, creating a culture of accountability and ownership.
Codewave operates with a focus on six critical success criteria: revenue, profitability, self-management, customer Net Promoter Score (cNPS), employee Net Promoter Score (eNPS), and thought leadership. Initiatives based on these criteria are run entirely by employee volunteers, who recruit team members and collaborate on achieving organizational goals. Employees are free to move between initiatives, guided by the question: "What’s the most valuable work I could be doing that I’m passionate about?"
Innovative Product Development: Empowering Intrapreneurs
Codewave's culture fosters intrapreneurship, empowering employees to develop their own product ideas. This entrepreneurial spirit has led to the creation of innovative products like Glue and Storymetrics—products that not only solve challenges within Codewave but also extend the company’s vision to external organizations.
Glue encapsulates the principles of autonomy, transparency, and peer-based growth, offering tools for decentralized decision-making and continuous feedback. This product aims to help other organizations adopt similar practices and drive innovation in their own teams. Storymetrics, on the other hand, uses AI to democratize data and make it accessible to all employees, fostering a culture of informed decision-making and continuous improvement.
Both Glue and Storymetrics are in their MVP-ready, pre-revenue stage, showcasing the company's commitment to building products that reflect its self-management ethos.
Boundaries of Action (BOA): Autonomy with Accountability
Teams operate with flexible roles and responsibilities, starting every project with a "Vision" workshop to align with the client's objectives. The "Social Contract" established by team members ensures accountability through agreed-upon social behaviors and consequences, fostering a culture of mutual respect and responsibility.
Codewave uses a unique tool called the Boundaries of Action (BOA) to empower teams to make informed, autonomous decisions within defined boundaries. This tool gives teams the authority to make decisions regarding promotions, project management, technology adoption, recruitment, and more. BOA ensures that teams remain aligned with organizational goals while maintaining accountability for their actions.
The Boundaries of Action (BOA) at Codewave empower teams to make informed, autonomous decisions within defined guidelines. Teams can:
Nominate peers for promotions and double hikes.
Set a hike budget for every season, evaluating revenues and profits.
Mine customer accounts for additional value creation.
Accept, reject, or negotiate change requests from customers.
Choose technologies from an approved pool or add new frameworks.
Hire directly in collaboration with the recruitment team.
Add or remove team members.
Decide where and how they work from, including time zones.
And more.
Teams are responsible for maintaining their project’s profit margins, ensuring they do not fall below the minimum target set at project sign-off (e.g., signed profits might be 50%, with a minimum target of 25%).
This tool ensures alignment with organizational goals, fosters accountability, and enhances agility. Teams operate with trust and independence, driving better outcomes and overall success.
Profit-Sharing Culture: Rewarding Collective Success
Codewave shares profits as they are earned, rather than accumulating them over time. A portion of project profits is allocated to a “project kitty,” which is distributed equally among team members, regardless of experience. The remaining profits go into the company-wide “company kitty,” which is reinvested into the business and used for a company bonus system. This profit-sharing culture encourages employees to take ownership of their work and aligns individual success with the company’s overall performance.
This bonus scheme is switched on or off based on the company’s financial health and market conditions. Employees are encouraged to set their aspirational salaries and take on challenges to prove they can handle greater complexity and responsibilities.
Design Thinking and Peerly Practice: Empowering Creativity
At Codewave, design thinking is at the heart of its problem-solving approach. The company empowers its people to think creatively, ask critical questions, and influence project outcomes. Every team member, irrespective of their title, is encouraged to adopt a design-thinking mindset, allowing them to innovate and solve complex problems effectively. The performance parameters—dependability, competence, self-management, teamplay, and impact—highlight a commitment to nurturing holistic leaders who excel in both technical skills and human values.
Codewave's Peerly practice fosters continuous growth through peer-to-peer performance nudging, eliminating the need for annual reviews. Teams provide real-time feedback, promoting a culture of accountability and mutual improvement. This approach ensures that feedback is timely, constructive, and directly actionable. Peerly helps individuals grow holistically, balancing technical skills and interpersonal development.
This culture of continuous feedback and growth ensures that teams remain nimble and proactive. High performers at Codewave are not just exceptional in their roles but also demonstrate strong interpersonal skills and a commitment to collective success. This unique blend of capabilities and character drives innovation and sets the company apart in the industry.
Conclusion
Codewave is leading the charge in creating human-centric workplaces where employees are empowered to be their authentic selves, collaborate effectively, and drive meaningful innovation.
Through its self-management practices, radical transparency, and design-thinking approach, Codewave has built a company culture that encourages autonomy, accountability, and continuous improvement. The company’s products, Glue and Storymetrics, are set to revolutionize how other organizations operate, enabling them to adopt similar principles of self-management and drive greater innovation. Codewave’s vision of a more open, inclusive, and empowering workplace is one that is reshaping the future of work.
