At the center of the company’s design for work is a mechanism that produces a dynamic sort of order. It’s called the “Colleague Letter of Understanding” (or CLOU, pronounced “clew”), a contract in which each individual defines his or her personal mission (and how it relates to the organizational mission), work commitments, key activities, and success metrics–all negotiated with ten or twelve core colleagues (called CLOU colleagues). The CLOUs are available online to everyone in the company, they can be updated at will, and are embedded in a social network that includes a real-time feed of real-time performance data, CLOU colleague activities, and peer feedback.
The result is a live map of the enterprise–a dynamic network of peer-defined interdependencies that define the org chart (rather than the other way around). Instead of hewing uncomfortably to a rigid, top-down hierarchy, the CLOU system allows Morning Star‘s colleagues to operate in a “natural” hierarchy based on expertise, achievements, and accountability. People don’t move “up” at Morning Star, they grow in respect and responsibility (and compensation) based on their contribution.