Becoming Bossless: An Update On The Radical Transformation Of Our First Acquisition
In addition to Corporate Rebels, we run a private equity firm named Krisos. While Corporate Rebels focuses on research, sharing, and fostering a global community, Krisos is dedicated to putting those ideas into practice. We buy companies and transform them into radically progressive workplaces. In today's post, I share an update on the ongoing transformation of our first acquisition.
A brief history of Krisos
Two years ago, we set up Krisos as a vehicle to speed up the global workplace revolution. Together with experienced transformation leaders Dunia Reverter, Jabi Salcedo, and Xavier Costa, we set out to change more businesses for the better.
The concept is simple:
- We pool money from investors into an investment fund,
- use that money to buy traditional companies,
- reinvent these companies through a proven transformation approach,
- and then sell them in a sustainable way (turning it into a cooperative or steward-owned company).
Simple? Yes. Easy? No.
However, we've been making great progress.
Earlier this year, we onboarded the first group of investors. Since then, we have been working diligently on acquiring our first company. On July 12th all documents were signed, and we officially became owners of an engineering and manufacturing company based in Seville, Spain.
A very exciting and important step in the history of Krisos.
The company is called Indaero. It employs 40 people and operates in the aerospace and medical sectors (with Airbus as a main customer in the former). With more than 50 years in the market, Indaero has designed and manufactured protective equipment, flight simulators, mechanical boxes and interior equipment.
The origins go back as far as 1969 when the company began its steps in the engraving sector. In 2002, Indaero started making manufacturing plates and labels for Airbus. Two years later, it made its way into the world of machining, expanding its services in the manufacture of aeronautical parts, and later becoming certified in the EN9100 Aerospace standard.
In 2010, it expanded as it began to export products to various European countries. Two years later, it was able to penetrate in the space machining and sheet metal transformation markets, including laser cutting, bending, manual and robotic welding processes.
On July 12th, 2023 Krisos acquired a majority stake in Indaero and started the transformation into a radically new way of working.
A radically new way to work
The new way of working we implement is the so-called NER approach (a Spanish acronym for 'new style of relationships'), coined by workplace pioneer Koldo Saratxaga.
For an overview of what this NER way of working is all about, check out the animated explainer video we made:
In short, the way of working we implement features:
- No hierarchy, but self-managing teams
- No bosses, but elected representatives
- No individual bonuses, but profit sharing for all
- No thick bureaucracy, but clear principles
- Full financial transparency
- Transparent, peer-to-peer salaries
Building momentum for change
As it is customary in such NER transformations, we shared the NER values and typical practices with all employees prior to acquiring the company. We asked them to vote if they wanted the acquisition to go ahead (which is an important part of our due diligence process).
The result? 87% of employees voted yes. That's what we call momentum for change.
After going through the due diligence process and the bureaucratic hassle of buying Indaero, we embarked on the transformation.
What has been changed?
Dunia is leading the transformation from our side and is supported by Xavier. Since the transformation is a collaborative effort, we rely heavily on the motivation, expertise and knowledge of the people at Indaero.
To ensure the transformation is made for the people by the people, we have formed co-creation teams that are working on various topics of transformation.
Here's what they've jointly accomplished so far:
- Full transparency around financial performance has been created. The goal is to get everyone to think about the company's long term success.
- By establishing a simpler accounting system (next to the official one), employees are supported to understand the profit and loss statement and the balance sheet. We want everyone to feel and act like entrepreneurs, understanding financials is vital for that.
- Everyone has jointly agreed on an execution plan to meet the objectives for the end of the year.
- A clearly defined operating rhythm has been put into action, with daily, weekly and monthly meetings.
- The new organizational structure has been designed, approved and implemented. The staff has been working without bosses for several weeks now.
- A new and co-created salary balance has been approved (which results in a significant salary increase across the board). Salaries are increased as of October.
- Profit sharing for all has been implemented (with 30% of profits going to staff).
- Training on consent decision-making has been successfully completed. Follow-up training on meeting effectiveness, conflict resolution, and feedback will take place shortly to further boost individual and team development.
Important reminder: this is progress of a transformation that began just 3 months ago!
What are the results?
The progress in terms of engagement and motivation is noticeable. There's great team spirit and commitment to truly make this transformation succeed; to ensure the company becomes wildly successful and a beautiful place to work.
People are more open to support each other and to step in when needed.
Of course, there are always adjustments and tensions in a process like this. To name a few:
- People who've moved out of their manager role have to get used to not being in a position of power anymore.
- Tensions from past power differences pop up now and again.
- Addressing conflict in a constructive way doesn't come easy. The training in that area is helping everyone to improve this vital skill.
- It has been challenging to get familiar with the evaluation criteria for the new salary system. It takes some practice to avoid over- and/or underestimating other's skills.
There are a few more personal things at play of course, but we don't share those. Obviously, we don't want to harm the safe environment that we're building inside the organization.
All in all, the challenges are very much in line with what we know from such transformations. The experience of our team is hugely helpful in this.
Reflecting on our previous transformations to this NER way of working, we feel that being an owner of the business (instead of being external transformation consultants) is hugely helpful in making such transformations.
There seems to be less tension, more commitment, and more clarity.
How about the financials?
Well, financials are looking very good too. It looks like we will have a great end of the year, with revenues 15% higher than budgeted and EBITDA 62% (!) higher than budgeted.
Is that all due to the transformation efforts? No, surely not. And it's certainly too early to tell what the effect of the transformation is.
However, from previous transformations led by our partners, we know that such changes have a very positive impact on a company's success.
All in all, we are very happy with the progress at Indaero so far. Motivation is high, commitment is great, and financials are looking much better than budgeted.
The transformation at Indaero will continue to unfold as the people gain more and more experience with working in a bossless organization. Dunia and Xavier will keep supporting them on their radical journey of personal and organizational reinvention.
As they progress, Joost will continue working on the academic side of things as he studies the transformation efforts in real time. The goal? To codify our approach, to contribute to the academic literature, and to validate the effects of our transformations.
I will continue working on the investment side to bring in more investors who want to make money and have a positive impact on the world.
In the meantime, we're getting ready for our second acquisition. This time, we focus on the Barcelona region.
Get more details
Of course, we will continue to share the progress right here, on our blog, and in our newsletter. Exclusively for members of the Corporate Rebels Academy, we will share much more in-depth updates through regular Q&As with our transformation leads.
Want to join the Corporate Rebels Academy, just like over 1,000 others? Become a rebel right here.