
How to Ruin Your Company With One Bad Process - joaodepaula
http://www.bhorowitz.com/how_to_ruin_your_company_with_one_bad_process
======
nostrademons
"As a technologist, you know that the worst thing that you can do is over-
constrain the problem before you start. You'll kill creativity and prevent
yourself from getting a truly great outcome."

As an engineer, I love hearing firm constraints from the beginning. The
constraints are what breed elegance; there is no such thing as an elegant
solution when there is no shape to the problem. It's nice if the constraints
are prioritized so you know what to give up if you can't satisfy them all. But
there's nothing quite like saying "Yeah, we did this thing in two weeks that
everyone assumed was impossible, and we did it without a binary push" or
"Through our clever architecture, we accomplished with one server what
everyone thought required a whole rack."

I believe design is the same way. The designs I've seen where the dictum is
"Let your creativity run wild!" tend to be uninspired, while the ones I've
seen where it's "This is what the user is trying to accomplish, and we have a
4 inch screen and 10 seconds to hook them" are often much more creative.

As a manager, the constraints are annoying. But one consequence of that is
that setting firm constraints will tend to shift your culture from being
manager-centric to being engineer- and designer-centric, which IMHO is a good
thing.

~~~
carbocation
Constraints gave us Facebook instead of Myspace. Constraints gave us Twitter.
Constraints gave us Snapchat.

Social networks have thrived on obvious constraints. When looking for a
startup idea, sometimes I try to reimagine a popular tool or service with
additional constraints.

~~~
est
and no-constraints gave us 4chan.

~~~
atesti
4chan has constraints: There are only 20 pages per board (if I recall
correctly) and if a thread does not get new posts and drops from page 20, it's
gone forever. Just like the twitter 140 characters limit, 4chan has a history
limit.

So 4chan perfectly fits in the parent's list of social network like things
based on arbitrary contraints

------
curun1r
One part of his conclusion struck me as wrong:

> As a technologist, you know that the worst thing that you can do is over-
> constrain the problem before you start.

From what I've read on this subject, this is not the worst thing you can do.
The absolute worst thing you can do from a creativity standpoint is be
completely unconstrained. That "blue sky" thinking leads to a lack of focus
that prevents you from coming up with good solutions. The startup mentality of
"embracing constraints" is more than just a rationalization that tries to turn
a negative into a positive...it's an observation of how to best creatively
problem solve.

There's no doubt that over-constraining can also have negative consequences,
but if you've got little to no natural constraints, it's almost always best to
invent some reasonable constraints prior to diving in and trying to solve the
problem. It's okay to document those constraints and, perhaps, make changes if
you find the problem you've created to be intractable. But operating without
those constraints, whether real or self-imposed, is the absolute worst way to
approach any creative problem solving endeavor.

~~~
jeffdavis
I always think about it from an artistic standpoint. Art forms are almost
_defined_ by their constraints: movies can't use text, literature can't use
pictures, ice sculpting can't use clay, mosaics can't use paint.

Of course, art is also about breaking out of those constraints and creating
new mediums. But that seems more about finding a new set of constraints rather
than eliminating them entirely. Decide to break free from the canvas and paint
an entire mountainside? Great, now you have to consider things like the angles
from which you can see the work, the way the lighting will fall, how long you
have to complete the work and show people before the work succumbs to the
weather, etc.

So I agree that creativity is strongest when operating within constraints.

~~~
cookiecaper
The post opposes _excessive_ constraint. An example of that would be making
your examples hard and fast, inviolable rules: there are movies that use text
and books that use pictures and illustrations to great effect. The constraint
may be "presentation should be primarily visual and auditory, and not require
much reading". The over-constraint would be "presentation must be exclusively
visual and auditory, and no text may be displayed on screen".

------
mathattack
Great article. I've come to believe that Ben Horowitz is the best management
writer today. He comes from a technical place, and has learned the ways of
management via the school of hard knocks. And every interesting project worth
doing comes from the school of hard knocks.

I've seen this problem in organizations many times. When you do bottom-up
organization design, the most persuasive people win. Then people start
justifying promotions and pay based on the size of their teams. And those who
were more disciplined in the process lose, because they could have done more
with more people, just optimally.

The other perverse side effect of this is some people who are great with 4-5
people teams (good player-coaches) are disasters as the head of 30 person
organizations. Their style doesn't scale, but they feel the need to grow
because of the poor incentives.

This type of issue comes up in consulting quite a bit, where "Fees managed"
can be the key metric rather than "Customer ROI" or "Customer Satisfaction."

------
jobu
_" If you quadruple your engineering headcount in a year, you will likely have
less absolute throughput than if you doubled headcount. As an added bonus, you
will burn way more cash."_

This is a great point (although I hate the term "headcount"). It takes time to
get engineers up to speed in any organization, and it usually cuts into the
productive time of current engineers.

~~~
virmundi
A mentor of mine, David Kathan, said something more colorful, "Of course, you
can have a baby in a month if you use 9 women". People should read Mythical
Man Month more.

~~~
the_real_bto
Fred Brooks has some gems. I'm especially fond of the Second System Effect [0]

[0]
[http://c2.com/cgi/wiki?SecondSystemEffect](http://c2.com/cgi/wiki?SecondSystemEffect)

~~~
rodgerd
Which is a refutation of the idea in the essat that the best engineering
happens when there are no constraints.

~~~
the_real_bto
I'm not sure I follow. I see the constraint of the first system as the natural
fear of failure that comes from doing something new. It is an implicit
constraint. The second system is less constrained in my view than the first.

~~~
rodgerd
The author of the essay linked seemed to be asserting that freedom from
constraints will produce more wonderful solutions.

My interpretation of Brooks' observation on second systems is that they're
what happens when the first system has been enough of a success to give people
a relatively free hand to solve problems with it - so they try to solve all
the things and wind up with an over-ambitious and unusable system, from which
a pared-back third system emerges.

------
debt
Budgeting is particularly interesting in a situation where you receive
funding. It seems it would be much easier to budget in a bootstrap situation,
where growth is likely happening a bit more slowly. You're slowly adding a
person(engineer, marketer, salesperson, etc.) here and there as you go
along(as needed), buying more servers, etc.

I would assume budgeting is a bit different in a situation where you receive a
_massive cash infusion_. You want to spend all of it to grow even more quickly
but the effects of spending may be harder to measure( _because you 're
spending soo much soo quickly_). So do you just replicate the growth strategy
used in the "bootstrap" phase or do you adopt a new one?

In a situation involving a massive round of funding(relative to the current
size of the company), wouldn't it be difficult to attribute any problems
supposedly associated with the increased budget to a "bad budgeting process"?
That is to say, if the growth isn't happening, then there's no guarantee that
just by adding more money to "growth" that "growth" will happen. You may have
just pointlessly hired managers, salespeople, engineers and bought more
servers and whatnot, for growth that wasn't going to happen in the first
place.

To put it a different way, when the profits don't catch up with spending, was
the problem really the budgeting process? Or with the market itself? Or some
other factor entirely?

Basically, _how do you identify a bad budgeting process in a situation where
some entity just externally infused a bunch of capital_?

~~~
GFischer
I thought you had to show investors what you were planning to do with the
money before getting it?

Of course the actual budgeting will be different, but at least have a broad
outline.

~~~
debt
I would assume so. But if the idea or company fails or the planned trajectory
falls short, how would the company know it was the budgeting process at fault
versus some other factor?

------
danso
Not so much a "process" as much as a bad planning strategy, or a company
structural deficiency (in which the incentive of "tell me what budget you
need" is exacerbated).

When I think of "one bad process" that could ruin any company...I think of
something like, stack rankings, or, partially-automated deployment (e.g.
[http://www.zerohedge.com/news/2013-10-22/how-
lose-172222-sec...](http://www.zerohedge.com/news/2013-10-22/how-
lose-172222-second-45-minutes))

~~~
Stryder
I agree.

This seems more like a good example of the kind of mistakes/challenges that an
inexperienced manager would encounter.

People are people, which is to say that people will always attempt to game the
system, in one way or another. The keyword here being "attempt". Strong and
experienced leadership should be capable of not only managing the human nature
of the workforce and help bring out people's best, but also have enough
experience to understand how to maintain the integrity of the company's
culture. There is no perfect system for structuring a group of human beings.
You have to deal with things as they come up.

------
coldcode
I saw where it was going right at the start, I've seen it a lot in various
startups I've worked with. Growing a company past certain sizes often winds up
failing due to unbridled optimism. Reason goes out the window as growth seems
it will never end; people buy into it and want to expand their role for when
it hits the big time. The end is often a mess. Eventually either sanity
prevails or it goes bust.

------
allochthon
This is an excellent warning to any startups looking at growing quickly. I am
living through such a growth effort, and I can definitely see how the culture
is changing for the worse in the company.

Counter to the author's general point, I would add that I think well-defined
budgeting exercises that lead to clear targets of the kind described in the
article, where people are "made accountable," appear hubristic to me. There
are so many unknowns that will come up that even to pretend to be able to meet
such goals feels off. I'm waiting for management science to catch up with
agile development.

------
apples2apples
Currently in a project situation with no budget and blue sky dreams. I can't
say how much I love this article enough.

I think one of the unspoken insights here is: give your projects a budget.

I've been with two startups now that didn't do this and see them either think
there is no budget or there is infinite budget. Ultimately both CEOs would say
"Just come ask me" which means that you now have to pester the busiest person
at the company to get a budget. It is effectively giving the project no
budget.

------
Mz
_As a technologist, you know that the worst thing that you can do is over-
constrain the problem before you start. You 'll kill creativity and prevent
yourself from getting a truly great outcome._

Perhaps "artificially constrain" is the real problem. Constraints that are
rooted in real world limitations lead to the elegant design that others are
commenting on here. Constraints that are kind of made up BS can, in fact, mess
things up pretty badly, just as the author suggests.

I mean, if there is solid logic behind the constraints, it helps foster good
problem-solving and good design. But constraints that lack that solid logic
can very definitely cause things to go awry.

------
davidw
> Note that this does not apply to you if you have very small numbers. It's
> fine to grow engineering from one to four people or from two to eight.
> However, if you try to grow from 50 to 200, you will cause major issues if
> you are not extremely careful.

That's why I haven't bought his book. It just doesn't seem relevant for the
kinds of smaller companies I'm interested in.

------
dchichkov
"Well, that's the beauty of the game. It only takes one player to opt in,
because once someone starts playing, everybody is going in -- and they are
going in hard."

As per Frans de Waal's, this is true even for chimps ;)

------
meh_master
off-topic: why does Ben Horowitz always include rap music and a quote which
aren't relevant to the article in question? (other than that he just likes
rap)

~~~
DevoAKA
> 0 to 100, real quick

That's the whole point of the article. He's saying don't do it.

------
michaelochurch
_When I asked my managers what they needed, I unknowingly gamified the
budgeting process. The game worked as follows: The objective was for each
manager to build the largest organization possible and thereby expand the
importance of his function. Through the transitive property of status, he
could increase his own importance as well._

This will always happen with closed allocation, no matter how much it is
tweaked. It's an inherent property of closed allocation systems that the
definition of work is driven by managerial status assertions rather than the
needs of the business, which can only be assessed, at the lower levels,
organically.

Closed allocation doesn't invariably destroy a company, and it's only in
software that open allocation is obviously superior. (An open-allocation
nuclear plant may not be the best idea.) Most industrial efforts can tolerate
the inefficiencies that come with closed allocation. Software often can't,
because software efforts tend to be binary in outcome (most lose, a few are
big winners) and closed allocation generally creates enough needless
complexity to cripple the company before it really succeeds.

~~~
jacques_chester
Can you name open allocation companies that _aren 't_ operating with massive
free cashflow? Because you always bring up Valve when raising your theory that
open allocation is the magical escape hatch from economics, and it always
seems to me that's the _only_ major example you have.

Google and Microsoft also have massive free cashflow and they don't use open
allocation. So perhaps the magic of Valve's "open allocation" is that they're
just sitting on a cash fountain and it doesn't matter that much how they spend
it.

~~~
chmike
Isn't SuperCell (Clash of Clans) using open allocation as well ? They did it
before becoming a cash fountain.

My feeling is that open allocation is the most efficient with very dedicated
employee and strong constrains. The manpower limitation being one of these
constrains. Self organization is also more efficient with few people because
communication is then more efficient. Obviously when the number of employee
grows, these two conditions are much harder to met. Cashflow can only hide the
inefficiency.

~~~
jacques_chester
> _Obviously when the number of employee grows, these two conditions are much
> harder to met._

This is what I mean about the "magical escape hatch from economics".
Coordination is easy if you have massive surplus, because you can recover from
any fuckups.

In constrained environments on large problems, it falls to bits. Toyota
delegates serious authority to its workers, but they are still working inside
a system they help to design. It's not an ivory tower sitting next to a golden
brook.

I'd be interested to see how many companies use open allocation that have
succeeded and how many have failed. I'm going to guess that the failure rate
is pretty close to the mean failure rate for all new businesses.

------
AndrewKemendo
Interesting article for sure and I think it highlights exactly how you get
unwanted bloat and how to prevent it. Budgeting has always been a dark art,
especially for creative work, and adding smart constraints on the front end
are some ways to reign things in - however I think this largely applies to the
companies who can say the following: "we had plenty of cash in the bank." I
know for us our budgeting process is, what is on fire and can our limited
amount of cash put it out?

Changing gears though, I have to say that I was immediately turned off by Ben
quoting a rap lyric at the beginning of his article. Not because I don't like
rap, I do, but because of the lyric he chose.

I think this one is particularly egregious given that the quote includes the
term "nigga" \- even though it was of course self censored - which I don't
think is particularly appropriate coming from a white man.

Not really a big thing, and it doesn't impact the overall message (which is
why I think it only hurts things) but it may strike others wrong too.

~~~
meowface
This attitude baffles me. He's quoting lyrics. Lyrics are lyrics, and the ones
he quoted in particular have no racial overtones. And even if they did, who
cares?

Lots of songs have the words "cunt" and "motherfucker", but quoting those
lyrics does not mean you are intending to insult a woman or accuse someone of
having an Oedipus complex.

~~~
Thrymr
> Lots of songs have the words "cunt" and "motherfucker", but quoting those
> lyrics does not mean you are intending to insult a woman or accuse someone
> of having an Oedipus complex.

And yet many people (women and men) will find them insulting and offensive
nevertheless, regardless of what you say your intent is.

~~~
meowface
Of course. But many people would also be offended at the word "fuck", such as
in "that's fucking great". It's impossible to not offend someone, that's why
you write and speak with a target audience in mind. And Horowitz is speaking
to the tech and startup industry, which is generally fairly relaxed when it
comes to profanity of that nature.

