Radical Agility: How Zalando Tech Became Berlin’s Hottest Workplace

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“We can wait in the jungle” isn’t something you hear much in Berlin – much less in the office of a fast-growing multinational. But a jungle (perhaps better described as a bush, with apologies to jungles everywhere) is far from the most radical thing at the headquarters of Zalando Tech, the e-commerce giant’s rapidly-expanding technical arm, which sits at the corner of the city’s Alexanderplatz, in a building formerly the home of East Germany’s propaganda machine.

Among the foliage, cafes, meet-up boards and mock warehouses are an engineering team that is the envy of most in ‘Silicon Allee’. In under two years its staff has grown from 600 to 1,350, comprising 78 nationalities. Monthly applications have rocketed from 800 a year ago to 2,200 now, and 60-70 new employees are onboarded each month.

The reasons are manifold. There is the chance to work at a fast-scaling firm which is soon to expand into Poland and France; the chance to join a brand whose second quarter sales this year rose 25%; and opportunities to spend a fifth of the week working on one’s own innovation project.

Chiefly, though, Zalando Tech’s draw is Radical Agility.

In 2014 it was a different story. Zalando, Europe’s largest online fashion retailer, was performing well but staff satisfaction was low. A strict, top-down hierarchy was stifling innovation and recruitment numbers were at a standstill.

That August the company enlisted Eric Bowman, an industry veteran whose previous firms included British telco 3, TomTom and fellow e-commerce brand Gilt. Immediately, Bowman got to work changing Zalando’s culture.

“I wanted to make sure that as we continued to add people, we could go faster,” Bowman told Red Herring. “I did a deep dive analysis of everything around how we made software, and there were a couple of places where it was clear as we scale, they would slow us down.”

The company, initially a spin-out of Berlin startup galaxy Rocket Internet (which now reportedly owns just 1% of the firm), was founded in 2008. It had become, alongside its progenitor, one of two German firms to make the ‘Billion Dollar Club’ of the world’s 50 biggest startups. Times were good.

But Zalando was keen to transform itself from a retailer with a tech arm, to a tech company outright. To do that it needed to hire the best. Bowman consulted several oracles including Holocracy, the Agile movement and Daniel Pink’s Drive but the loudest signals were coming from Zalando HQ: employees wanted fewer top-down dictates and more responsibility.

Bowman and his team devised three key principles: autonomy, mastery and purpose. The culture would, “late in the day”, be called Radical Agility. It’s “making everyone innovative and entrepreneurial,” he added. “That means getting people away from tasks, and getting them thinking more in terms of business problems to solve.”

Having “avoided management” for 80% of his career Bowman, a longtime engineer, believed he knew what his technical staff wanted. “Some companies will do your laundry for you,” he said. “We’re not going to go down that road because we want to hire grownups, and people who can be self-sufficient.”

Stacia Carr, the company’s head of engineering, deals with Radical Agility every day. “I talk to people,” she told Red Herring. “A lot of people.” Carr worked at Kink.com, a Silicon Valley-based pornography site, during the boom of live video streaming. Then she sold a mobile app consultancy before moving to Madrid to work for Vidnex, a live streaming platform, in 2013.

Carr enjoyed the directness of Germans when she came to Berlin this March – “They’re similar to US professionals,” she said – but found the country’s tradition of rigid top-down management stifling.

“The cultural adherence to hierarchy is really strong in Germany, and I think it’s widely understood by leadership here that what we don’t want to do is build very fat hierarchies at the bottom that are thin at the top,” she said. “And I think there’s a lot of appreciation for following rules and process that can be really helpful. But then there’s the other side to that, which is making sure people understand and take responsibility for their own contribution; thinking for themselves.”

Part of that is being physically close to the end-product, which is why Zalando Tech HQ has a mocked-up warehouse, and usable mobile devices, so that engineers can see if the fruits of their labor will work with the company’s 60% of staff who work to deliver clothing quickly.

“Having employees physically close to the product and warehouse is incredibly important,” Bowman said. “On the one hand you have companies like Google, or Github or Facebook where the engineers are very often heavy users of the product. With a fashion company, fewer engineers are hardcore fashionistas. But you learn so much from your customer, everywhere we always push people to be thinking what customers are really doing.”

“Because people use things in totally unexpected ways and if you’ve created something, then you see how people use it, you think, ‘Oh, actually they didn’t have access to what I thought was a good idea,’” he added. “It’s part of everywhere we can, having feedback loops.”

Radical Agility deploys staff in small, self-organized teams that can act independently and easily. New hires spend a month onboarding – most of which is education in the system – and teams can pitch them if they have open spots on a project.

Bowman claims this leads to an air of constant improvement. “We move teams around a lot, and pull people onto very specific missions,” he added. “So people need to be prepared that they’re not just going to get a cubicle and work on the same thing for ten years. And we expect a certain level of maturity.”

On one development floor the main tenets of Radical Agility are plastered on large, multicolored posters. One of them implores staff to do the right thing, even when their boss is wrong. “People always ask me about that, and the first thing is that it’s not when you think your boss is wrong, or if you’re disagreeing on something: it’s when you really know,” Bowman said.

“We really want people to feel empowered enough to take a certain amount of risk there,” he added. “This is not something we’d expect to get applied very often. But for me it’s one of the most important things in terms of building trust in the system, in that we expect this to happen some time.”

Risk is not something that comes naturally to German firms: it’s one reason why the country has required an entire branded movement to promote tech across its many successful industries. Radical Agility is what Zalando believes will help it move quickly and scale at the same time.

Additional tech hubs have been opened in Dublin and Helsinki. Warehouses are planned to open soon in Paris and the Polish city of Szczecin. Amazon may be pushing for a European onslaught. Mobilizing Zalando Tech is essential if the company is to keep top of the continent’s e-commerce pile.

With this in mind Zalando Tech has reserved half of an entire floor to its Innovation Lab, opened last September, where employees can pitch ideas and, if successful, spend one day per week working on them. It’s a classic Valley ploy to increase creativity. In Germany, it’s as rare as a vegan currywurst (or an office jungle).

“I see them down in the lab, and it’s so amazing,” said Carr. “You literally get to experience two very different realities on a professional level. It’s great. Top-level developers see that language, and they understand what that commitment means…they can come here here knowing there’s a certain kind of environment where they can work, grow and deliver.”

Carr admits there has been some blowback from senior management who would rather have total control over the hiring process. “But that’s something they’ve had to give up in order to create this environment.”

And combined with Zalando’s scale – almost unique for Berlin despite its growing tech credentials – it’s an environment that appears to be winning plaudits among management experts, and the company’s accounts department. Radical Agility was “the right decision,” Bowman said. “It is continuing to attract senior developers from global tech companies, as well as pulling in those sought-after engineers from around the world.”