Why You Should (And Shouldn't) Throw Your Employees Into Swimming Pools

ClearGears, a performance-review startup, has chlorinated beginnings...

It began, as so many great ideas for startups must, with being thrown in a swimming pool.

Arshad Chowdhury, the founder of ClearGears, which powers real-time performance reviews for business, explains. After working for Deutsche Bank and founding MetroNaps (which operated a napping center in the Empire State Building), Chowdhury moved to Colima, Mexico, in 2008 to run a startup called Crowd Interactive. He and his coworkers were passionate about having a great culture there: everyone was actively encouraged to take naps, for instance. The team was also passionate about a certain kind of transparency when it came to rewarding good behavior or punishing the bad.

“We had a 12-bedroom mansion with a pool in the middle,” Chowdhury recalls. “Whenever someone did something really well, or really bad, they got thrown in the pool.”

Work extra hard on that new product launch? You got thrown in the pool. Did your line of buggy code set everyone back for days? You got thrown in the pool. To see a colleague pull himself out, dripping wet, was to know that that person either did something awesome or something terrible, and you were about to find out which. “I thought, ‘This is great, but there has to be a different way,’” recalls Chowdhury. “That’s how ClearGears was born.”

It began as a simple Hot or Not for developers: you’d see a shot of one developer next to another on screen, and you’d click on which one you thought was more talented. This fostered competition at the top, but only despair at the bottom. Chowdhury (pictured here) began talking to experts on workplace motivation, and very gradually, ClearGears—which became its own company independent of CrowdInteractive by late 2010—evolved into the much more sophisticated and sensitive tool it is today.

Most giant companies, if they employ performance review at all, do it in one large cumbersome process at the end of the year. They also do it in a very top-down fashion, with the bosses handing down censure and praise from above. ClearGears, by contrast, parcels out the process in bite-size chunks, democratizes it, and anonymizes it.

ClearGears will send out questions on a schedule you choose for your organization—a question or two a day is common, though you can opt for a monthly or weekly schedule instead. Employees then answer the questions, either evaluating colleagues on their team (“How actively does Betty support recruiting?”), or weighing in on the company as a whole (“Rate your manager’s ability to recognize excellence”). Everyone on a team evaluates each other, regardless of status—the paralegal gives feedback to the senior partner, and vice versa—though the person giving the feedback is anonymous unless she waives that right. Each evaluation yields actionable advice for team members, and over time, the organization and its workers accrue concrete data on whether they’re getting better at meeting their goals.

This year, ClearGears settled in at DogPatch Labs, a New York incubator, and signed up 50 companies in beta testing. In August, it raised $300,000 in funding; in September it closed its beta and properly launched, beginning to charge for its services at a rate of roughly $4 per user per month. Ten companies are currently paying to use ClearGears, including Bank Simple, Shutterstock, and Javelin Marketing. It’s not just tech startups who have opted to use ClearGears; a hair salon, Bloom Beauty, and a construction company, OmniBuild, are also in the mix.

Irving Fain, the CEO of CrowdTwist, a social loyalty platform for brands, is one of Chowdhury’s happy customers, having used ClearGears with his 10-person startup for about four months. “What defines the startup culture is a consistent pace of improvement in your product and your company,” he says. “If you’re holding your product to that standard, it’s only fair to hold your people to that same standard.”

With such a small group, does it ever get awkward to receive anonymous feedback on that less-than-stellar customer service you maybe provided during a particularly grueling week? Or do employees ever take advantage of the anonymity to snipe, backbite, or settle scores? “I had those same concerns at times as well,” says Fain. “But we haven’t had those problems at all. We’ve had no problems of people using it in a malicious manner.” He says it’s important for managers to explain how ClearGears is meant to be used; it’s not about witch-hunting or exposing the weakest link for prompt firing. Used well, ClearGears should be about strengthening the team as a whole. “In and of itself, ClearGears is not a manager,” Fain says. “It’s a tool for managers.”

The tool showed great promise to Jay Levy, a partner at Zelkova Ventures, which led the recent $300,000 seed round. “This is an industry”—internal reviewing—“that hasn’t been touched in a great way by technology or innovated on,” says Levy. “You go to Fortune 500 companies of the world, and they have 360-degree peer reviews, that no one can stand doing. Yet you go to a 50-person or 100-person or 200-person or 500-person small business and they don’t have anything. So I think [ClearGears] saw an opportunity to build a platform that’s different than anything out there...and to take that to a market that’s never been served, in smaller to medium-sized business. That’s what excited us about it.”

Chowdhury’s relatively short client list hasn’t kept him from dreaming big about the future. Eventually, he’d like to make it possible for users to take their performance reports with them, even as they move from one job to another. And he thinks that large businesses, too, could benefit from ClearGears, even if their adoption curve is likely to be slower.

He’s confident, at the very least, that his product is now finally on the right track. “Throwing people in pools, as much fun as it is, is better to do as a celebratory exercise,” he says. “It doesn’t really work to enhance productivity.”

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[Image: Flickr user knmurphy]

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