I've seen this is several posts of Ryan's and it continues to bother me (from Part 3 of the linked series):
> Everyone is hired at Treehouse at an industry-standard salary level that matches their job description. Most of our team is distributed and outside of expensive outlier markets (like Silicon Valley or NYC).
> The only way to get a salary increase is by performing consistently well in reviews. We don’t have a profit-sharing plan or bonuses (other than the sales team which has a traditional sales team bonus structure).
To me this is a way to pay people as little as possible. The "industry-standard salary" for a position like developer increases year over year by more than the rate of inflation. But without even standard cost-of-living increases, it sounds like working at Treehouse for any measurable about of time will put you in a worse financial position than if you bounced around.
EDIT: It seems they do offer cost-of-living adjustments but only for employees who are performing well (not that I'm advocating giving raises to poorly performing employees, but we're talking about 1-2% to cover inflation here).
The second is a merit increase based on their performance. This increase is analogous to a traditional raise. An employee may or may not receive a merit raise based on the incentive system the company has put in place.
Waiting to address poor performance until annual reviews is a horrendous anti-pattern. When an employee is performing poorly, it should be addressed as soon as it is identified. Therefore, a poor performance review should never be a surprise to anyone. Provided that the poor performance did not emerge near the end of the annual review cycle, truly poor performance reviews should be rare because the issue should have been resolved (either by the person correcting the problem or the company and the person parting ways).
> Therefore, if the market actually paid less for a job this year than last, then the employee would receive no adjustment.
This strikes me as a likely reason for structural inflation: companies can pay less for the same job (if they choose), without needing to negotiate a highly awkward pay decrease.
It's psychologically harder for an employee to argue against the status quo.
I’m torn in that I think the flip-side makes perfect sense. If there is 1% deflation, why shouldn’t employees’ wages be cut by 1% across the board? At the same time I feel that’s the quickest way to see half your development team leave, even though we’re talking about less than the cost of a nice dinner each month.
In an environment where the market crashes and it dramatically affects revenue for a business, everything has to be on the table, from layoffs to hiring and raise freezes to voluntary cuts in pay (often to save the job). If you make $100k a year at “market rate” and there’s a huge crash, and you’re given the opportunity to cut your own pay to $80k or try to get a job for $60-90k, what do you do? It’s a tough call for anyone.
The question becomes what you pay new hires. On one hand, the prevailing salary is much lower, and the company can save money. However, people talk and new employees will eventually discover the pay disparity which will kill morale.
Even if nowhere they could jump ship for would pay them their old salary either?
Incorrect. We offer everyone cost-of-living raises every year.
> Everyone who is performing well will receive a cost of living increase for their hard work.
I took that mean those not performing well (who may or may not be on their way out) do not receive the COLA raises.
"In my experience, managers’ responsibilities were …
- Communicating messages from top to bottom
- Settling disputes
- Managing careers
- Keeping their teams motivated and happy
- Shielding their teams from things they didn’t think they needed to know"
I think that's a pretty narrow definition of management, esp. things like "communicating messages from top to bottom".
While I don't disagree with the fact that a significant component of management, esp. large parts of middle management, can be done away with, I don't think any reasonably complex and growing organization can do away with management altogether.
A great manager (who may also play a part as an individual contributor) can channel & amplify an organization's creativity and innovation. S/he will also ensure there is an alignment b/w the organization's high level strategies and the individual contributions being made.
Much as we'd like to think that tech workers are unusually self-motivated or that online tools can fully substitute people management, in my experience neither are the complete truth.
- How Google Sold Its Engineers on Management: http://hbr.org/2013/12/how-google-sold-its-engineers-on-mana...
- The Flattened Firm—Not as Advertised: http://hbswk.hbs.edu/item/7000.html
- Be a Minimally Invasive Manager: http://blogs.hbr.org/2013/10/be-a-minimally-invasive-manager...
Fair disclosure: I'm an MBA...biases, warts and all.
I agree. In my opinion, the biggest and hardest part of management is to take a direction provided from above and turn it into actionable points for those below. Distinctly different from directing communication.
A CEO typically says "we need to increase sales in X vertical". It's up to his VPs to turn that into "focus our software's next features on X's needs", "hire more sales people devoted to X", and "target our marketing more on X". Then the managers look at "focus our software's next features on X's needs" and turn that into "identify X's needs", "create a set of features", and "execute on developing those features based on employee's strengths".
Expecting an employee to turn the "increase sales" message into "develop this feature" is a bit too much to expect, not to mention nearly impossible to scale. Also, expecting the CEO to transform their own directions into individual actionable tasks is going to eat into time they could better spend on other tasks (like talking to customers, speaking at conferences, determining new direction, etc).
Expecting some employees to do that? Why not? Don't all managers/executives/founders start at the bottom?
I wonder if any managers voted for it; or it any employees voted against it. I would be curious to hear from the displaced Treehouse managers as to what they think about the move. Maybe they were already doing fiefdom building and things that are orthogonal to the founder's vision.
I would also love to hear a follow up a year from now from an anonymous employee or two as to how it worked out.
nb. I did read the article from HBR on Google and managers - while I found it compelling, I also had to wonder whether HBS needs articles like that in their publication to ease the conscience of their students and alumni about the value of their degree and their utility to the companies they work for.
I can't remember which way I voted. Not just saying that because I don't want to reveal it, I just honestly can't remember. I know it seems crazy that I'd forget such an important decision, but it was a very chaotic time with a million details, a lot of which are foggy to me now. That said, I don't really care which way I voted because I'm incredibly happy now that the dust has settled.
To be clear, nobody was really demoted. I see it as everyone being promoted to being an ultimate decision maker. There are checks and balances in place, but generally everyone is free to serve our students however they think is best.
Being a manager was insanely stressful with no escape. In a typical day I would answer about 150+ emails and have 5-10 meetings. We probably did lots of things wrong that created this situation and we could have learned to be better, but I think being flat is far superior to any evolution of our previous structure.
Management was rewarding at times when the team would hit important goals, but it's poisonous for creativity. I hated killing other people's ideas, but I was the final judge of how we were allocating content production resources and I had to make tough calls in order to hit company goals and deadlines. In our new flat structure, people can execute on whatever they think serves our students best and they don't need anyone's approval to do it. We're now producing more content than ever and I think a lot of it has to do with people executing on projects they're passionate about. I found it extraordinarily difficult to make people passionate about projects that they don't come up with or decide to work on themselves. We're also able to produce more because managers are now free to produce content rather than, you know, manage.
Not only did I kill the creativity of those around me, my own creativity also died a slow and silent death. Now that time has distanced me from that period, I've rediscovered my own passions and entrepreneurial spirit. I'm making websites, always learning about the latest stuff, and I've even been learning iOS in my spare time for fun.
Management also allows little time to eat healthily, exercise, or sleep properly. I've managed (ha!) to gain ~20lbs in muscle mass in the last few months and I'm in the best shape of my life. I never thought a skinny nerd like myself could do that.
Would I do it again? It's really difficult to say. It would have to be a massive financial reward, but I'd be more concerned with the circumstances and the happiness of my team.
TL;DR: Management wasn't for me. I'm happier now than any other time in my life.
Yep, this. I work in a place that after a merger got rid of the creative director and replaced it with an "everyone is senior" approach. While it's nice on paper, we have no accountability, no one to set or drive standards, and no review process other than client sign-off. I think we would benefit greatly from a Director or VP or some sort of management that could authoritatively say "this is what we're doing and this is how we're doing it".
In my experience, that's something that managers say to justify their existence that has no real contribution to the work being done ;) It's all euphemisms for command-and-control, which isn't generally necessary.
ensure there is alignment... sounds a lot like messages from top to bottom
and channel an organizations... sounds a lot like keeping their teams happy.
I'm sure the distinction is important to you but not so much to the rest of us.
in non-MBA speak it is called "foreman".
This suggests that Ryan has confused "leadership" with "management". Good leadership means that people are all working to the same goals, good management means that people are working efficiently.
If you want to fix rumors, cliques, and back stabbing. Look to your leadership. If you want to get more done with the same number of people look to your managers.
It's a people problem! Hire better people that won't engage in petty crap like that...
You "fix" that by putting everyone on the same page going in the same direction. That is leadership.
If you've got someone who comes in at 10AM and leaves at 4PM and takes a 2hr lunch break. But they start no rumors, nor backstab, nor empire build, that is a management problem.
I think it's interesting that beneath the tagline of 'people work on whatever they want' there is actually an expectation that peer pressure will prevent this; once you're onboard with a project, you are expected to stay and contribute otherwise you will be penalised in your quarterly reviews. So manager-in-person has been replaced with manager-in-peers.
This is also the means by which people are discouraged from working on solo projects; since no-one can really rate them at review time, they'll slip down the rankings.
As usual, however, no discussion about how boring regulatory things are done.
Edit: actually that last statement was incorrect, sorry . If there is such a need then management is imposed:
There isn’t any top-down prioritization (unless we are required by law to act on an issue or some “red alert” type work is required, which should be rare)
It does mean that any endeavor that doesn't produce quickly would be a bad candidate for a solo project.
I can imagine a board meeting where an investors asks "so why are you behind on your customer growth this quarter?" and one of the founders says "no one at the company thought those projects were worth doing this quarter, and we're only 'guides' to the planning process so we can't ensure that something like that gets done."
Or a customer asks "why didn't you patch that security hole that we knew about last quarter?" - "no-one thought that project was as worthwhile doing this quarter as a bunch of cool but ultimately less-valuable features, and we are only 'guides' to the planning process so we can't ensure that something like that gets done."
There has to be someone setting specific overall goals and being accountable for hitting them. (Edit: at least if I was an investor / customer / employee of the company, I'd feel better if that was in place)
I'd be curious to hear more about how that's handled!
I get that everyone is afraid of prioritization going out the window without managers, but in my experience (and ymmv), managers are no better than productives at prioritizing. Grown-ups are used to taking responsibility.
Sets objectives. The manager sets goals for the group, and decides what work needs to be done to meet those goals.
Also, when you have a flat structure, what incentives are there for people to aspire to anything other what they're doing now??
While I can appreciate his leap of faith, I'm not sure this will work out long term.
For instance, if you are a growing SaaS that doesn't need to pivot, but rather to scale and add features.
In that case, a certain number of your objectives are inherent and obvious. Features that exist should be stable. Features that work now, for the current number of customers, should continue to work as more customers are added.
Well, if your SaaS is doing something valuable, just meeting those criteria is likely to involve a lot of work (otherwise it seems the product wouldn't be valuable), and profitability (customers indicate that it's valuable with their wallets).
And at least for some subset of SaaS companies, up to a certain number of developers, those criteria can be met by developers looking at metrics and saying to themselves, "hmm, this or that bug exists that I can fix", or "I wonder if it would be worth it to containerize the app and write tests that work against the whole container," and do a feature branch and then a PR, and if this initiative turns out to be new or valuable enough it eventually gets written into a blog post and may become part of the nature/value of the product, or contribute to the culture of the company.
So for companies with the right circumstances, I can readily imagine that the jobs that bosses do can be replaced by IRC, Github and the obvious objectives the product itself provides.
I don't know how it would work for companies more generally.
For companies that are still trying to decide what to do? Or what to do next? That seems quite experimental. For instance, Valve software; they have had such a headwind from Steam, for so long, that we may not really know how well the "bossless" approach will work for them until it produces their Next Big Thing.
> Also, when you have a flat structure, what incentives are there for people to aspire to anything other what they're doing now??
However, I feel that this makes the mistake of believing that the only way people want to ever grow is into management. For myself, this is absolutely not the case. There really do need to be other ways to grow other than into management.
Because of this I keep thinking about whether it would be worth the hassle of being a manager just so I could have the control I want.
It also makes being a startup (co-)founder very appealing because I'd be much more involved in what development gets done. Except then it would add even more overhead on top of managing people, since co-founders also manage finances, legal, PR, and take on risk.
I agree there needs to be a better way for people to grow. That's why I'm interested in flat structure experiments.
I worked at a startup who got bought by a large corporation. We had already had a flat structure:
As soon as you moved to Senior Developer, your development ceased. Which lead to essentially a flat structure for developers since most didn't want to go into management. The only option was to quit - which happened frequently and increased turn over.
This lead to another crisis of how to give developers a role besides management to aspire to. They came up with two roles. One was a "research and development" role and the other was an "application development" role.
This lead to another crisis. When you have a large team of developers and only two roles to aspire to - you again have another flat structure. Too many people for too few spots put them right back where they started. If you didn't get an "R&D" or "App Dev" spot, developers got frustrated and left. It created more politics and backstabbing and "cliques". If you knew the manager, you got preferential treatment to get into these now prized roles. It actually created more problems than it solved.
In order to get around this, you have to build a hierarchy structure, not just new roles. This include title changes as well as increase in pay, increase in responsibilities, etc. You can give developers a non-management track, but it as to be structured, and give people a sense they are achieving their goals and not feeling like they're being marginalized or just another cog in the wheel.
This is why I'm not sure flat structures will work. When you reduce the ceiling of achievement for everybody, what else is there to look forward to?
The situation you described has all the crappiness of a corporate hierarchy, but none of the promises of meritocracy ("work hard and advance"). From the programmer’s perspective, he’s stuck both in rank and in skill.
Contrast this with the FOSS model, which creates the feeling that he’s working on something, versus working for someone. He can work on whatever project he’s interested in, or create a new one if it has enough traction. Since he’s not going into management, that leaves him with advancing in either depth or breadth. He can advance in depth by choosing to work on something that challenges his skill level. Or he can advance in depth by working on new technology or in a new area (e.g. frontend vs. backend).
Just to play Devils Advocate here, but what happens if everybody wants to work on the same project? And this same developer doesn't have enough traction for other projects he would like to start?
Hierarchy isn't always bad, nor are managers. I mean, the army (special case perhaps) probably wouldn't function without it.
Perhaps in companies that can experiment in this manner, a better approach is to try and organically grow models that fit that specific company. As another commenter mentioned, you could start with giving developers x% time to do whatever they want, and scale up from that. Then regularly review any metrics that matter to you (the boss), and adjust.
The way I see it, humans in any context need structure of some kind. Why not focus on having people that are good at feeling the needs within the company, and grow structures from there. Maybe some parts of the company actually need hierarchy, and maybe others don't.
Have a manager solves those problems, and I'm not sure how they'd get handled in a flat structured company. Without ownership and accountability for specific responsibilities and/or deliverables, I think that the least pleasant jobs would get dropped...
If everyone is as professional and as dedicated as everyone else, and if conflict resolution and communication is easy between all people at the company, I can see the "no management" approach working.
I go to his boss when I need to discuss technical implications of decisions I'm making for the products. Next layer up is more of a filter between the CEO and the company.
Who works on what comes down directly from CEO.
It's tons of fun.
Edit: my last salary review, 6 people were invited to it (including me).
If there really are four layers of management in a company with 25 employees, that basically means each manager has zero, one or two subordinates. I really cannot see how that could work very well at all.
The general idea is for companies to be run as a democracy, like how governments are. IMO this is even more important than Basic Income. You spend 1/3 of your life working under these conditions, so why shouldn't corporations be democratic?
As for "implicit hierarchy" or "informal authority", yes that is partly the point. Not for positions of absolute authority to be ill-defined by top-down management which don't reflect reality; but for recognition and respect to be awarded based on actual merit. Cliques and inappropriate peer pressure might form (as claimed by articles about Valve not too long ago), but you can deal with that another way, instead of resorting to hierarchy and absolute authority.
How do democratic governments work? That could be how corporations work.
 Whether or not actually true is a side point; the things it described certainly could happen and therefore are theoretically interesting
you can deal with that another way, instead of resorting to hierarchy and absolute authority
Could you elaborate on both of these please? I am incredibly doubtful that a meritocracy naturally springs up and enforces itself. How does that actually work when everyone is on board with that idea? How does it defend against people that are just in it for themselves from exploiting it?
You can make theoretical arguments that hierarchical management is the best form of management for meritocracy as well, but that doesn't hold up in practice either.
Right now your post doesn't do anything to explain why the "no management" model works, you just more forcefully assert that it does, and handwave away two of the readily apparent points it could go wrong.
Look at how many FOSS projects work. Look at how many hackerspaces work. People gain reputation for doing good things, and in turn they are listened to (gain soft authority). People that try to take over get ignored, or thrown out.
Yes, I know that the economics are a little different, since it's a lot easier to fork a software project. However, this gives us a base to work on top of.
> You can make theoretical arguments that hierarchical management is the best form of management for meritocracy as well, but that doesn't hold up in practice either.
Sure, all of this is theory and useless, we need people to try it. My point has always been "the counter points are invalid", to encourage people to try it.
> Right now your post doesn't do anything to explain why the "no management" model works, you just more forcefully assert that it does, and handwave away two of the readily apparent points it could go wrong.
I'm not handwaving them away; I am saying that they are not critical to being able to sustain a "no management" model. There are existing projects that work like this. The problems people mention are real problems that are either solved well, not solved well, or not all that important, but it is very rare for them to be critical, which is the common (invalid) argument.
Probably because it doesn't work as well as the alternative. There are examples of this working here and there, but not many. The good thing about companies, as opposed to governments is that it's pretty easy to swap one out for another, without physically going anywhere. You can even start your own and try it out!
edit: it's still not that easy to start your own company, and the common advice these days is to "not try a new structure", so your argument doesn't follow there either.
Some of them have done pretty well. I think if they were that much better though, they would have outcompeted traditional companies.
> it's still not that easy to start your own company
So maybe the people that do so want to get rewarded for all the risk they are taking, and don't want to give equal shares and votes to the people who come later?
I know it's not what you meant, but it's very easy to start your own company, legally at least, at least in places like the US and UK.
So you retract your earlier statement? :p
> they would have outcompeted traditional companies.
50 years is a very short time for a few companies to out-compete the tradition of the world. Companies from a few hundred years ago had horrific human rights abuses; only now do we see the general attitude being supportive enough of ethical issues to actually dissuade companies from going down that path, and even today this is only a minor effect.
> rewarded for all the risk they are taking
Then perhaps we also need ways of founding a company that doesn't need all the risk to be taken on by a few people.
No. By and large, I think I'm right, but that does not mean there aren't a few exceptions.
> Then perhaps we also need ways of founding a company that doesn't need all the risk to be taken on by a few people.
We do! It's called the limited liability company or corporation, and it's one of the critical components of a modern economy. As an investor in a company, you can only lose what you put into it, rather than have someone come after all your assets. This is also how stocks work, at heart: a lot of people can each own a piece of a company, and thus pool a lot more capital than the founders could on their own.
Even that is still fairly risky and involves a lot of effort for which people want to be compensated if it goes well.
One of the nice things about companies is that anyone is free to go out and create one and more or less create it in the way they best see fit.
But your belief then is based on conjecture, as I said before. So is mine, but a positive belief (it can happen) is less strong than a negative belief (it can't happen).
We could look at the proportion of attempted co-ops that have failed, vs proportion of normal companies. That would be some interesting data.
> We do! It's called the limited liability company or corporation
This has nothing to do with your original notion of "risk" from 2 posts ago that you used to discredit co-operatives. There, we are talking about the reward split based on the risk split. Typical LLCs still have unbalanced ownership distribution.
Let's look at how many of the world's leading companies are worker's cooperatives: very, very few. And this despite the fact that companies generally don't stay 'at the top' all that long. There is plenty of room for new companies in many fields.
> This has nothing to do with your original notion of "risk"
So what's your proposal? I don't really understand what you are discussing if you think it is not related.
That's why I said "proportion", not "more". I agree the data would not be a firm indicator because there are lots of other factors involved, but it would still be interesting.
> So what's your proposal?
It's not a proposal, just an observation to counter arguments of "impossible" - if more people are more equally involved in funding a company, so the distribution of risk is shared, there is more incentive to create a democratic structure.
It is easy to start a business. You can buy things at thrift stores and sell them on Ebay for almost no startup capital.
I think the main reason I wouldn't run a company this way is because it's inefficient. A non-democracy can make decisions much faster and much more efficiently in the marketplace. Since this is the case, most companies would never do it. The only real ways is if every company were forced by the government..which would not end well for anyone.
Do we really need everyone in a company voting on product ideas/direction when many don't even know or care about it in the first place?
It seems, from your other comments, that you don't want to risk your own money and start a company like this (where everyone has a say)..you would rather force existing companies to use this structure..which is ridiculous.
Everyone thinks so (for no good reason I can see), so nobody tries. This doesn't mean the idea itself is actually bad.
> Do we really need everyone in a company voting on product ideas/direction when many don't even know or care about it in the first place?
This is a valid concern even for democratic governments. I don't think it's contradictory to the idea of a democracy. There are ways of making this work better e.g. weighted votes based on some criteria; I'm not interested in armchair-theorising about it though, we need to try it out and gather data on what works and then form theories about why.
> It seems, from your other comments, that you don't want to risk your own money and start a company like this (where everyone has a say)..you would rather force existing companies to use this structure..which is ridiculous.
I don't have enough money to risk this way. If I did, I would. "Force" isn't feasible, and you're extrapolating me here, but perhaps the market can apply pressure, in the same way you might boycott an unethical company. (As I noted elsewhere, this is more feasible today because you do actually have ethical alternatives, as opposed to a few decades ago.)
The best feature of democracy is that they give an illusion of empowerment. You voted for someone put forward by a hundred thousand person organization, who maybe went on to get a job in an organization of several million people. So isn't that a government "by the people"? Yes, the real strength of democratic government is that it is good at propaganda.
In a company, where real results matter, resources are finite, and customers have alternatives, it is almost never used. This is despite the fact that most Western Europeans (and descendants) think democracy is the best form of organization ever. There's a reason for this.
This is precisely the reason that some geeks advocate turning government into a hierarchical corporate model, run by shareholder democracy - is the form of organization universally chosen when results matter
As clearly stated in that article, the US gov has weapons that are too powerful to be resisted. So we can't just stop paying them our taxes if we don't like their services. Capitalism in the US still depends on the US gov stepping in occasionally to break up monopolies when customers aren't able to choose between competing companies to give money to.
Maybe some good managers could have helped by taking the unpopular stand of "guys, this sucks, we need to do better."
Flat organizational structures are nothing new, many big companies practice this to a certain extent. For instance many IT consulting companies have armies of workers without the typical boss, but you still have executives/managers to actually run the companies.
Some companies will promote flat organizational structures but really often it is just a euphemism for lack of career advancement opportunities. So instead of employees aspiring to move up the ladder they are encouraged to move laterally (try different roles).
Their new employee manual: http://newcdn.flamehaus.com/Valve_Handbook_LowRes.pdf
Books by the SEMCO founder, Ricardo Semler:
Maverick - http://www.amazon.com/Maverick-Success-Behind-Unusual-Workpl...
The Seven Day Weekend - http://www.amazon.com/Seven-Day-Weekend-Changing-Work-Works-...
1 - https://github.com/blog/category/hire
Are these perpetual, "projects?"
If anyone has any experience with this, please share.
The beauty of this approach is that it can start as an experiment, say 10% (or a day every two weeks), but then migrating to an environment where employees set most of their work queue is just a matter of adjusting X.
It's sad, really, because in principle, I agree.
Doing away with managers entirely is not a one-size-fits-all solution.
I also can't fail to notice that like this example, most of these attempts start with horror stories about a failing management / organization. Just because doing completely without management is better than the previous situation, doesn't mean that there isn't a middle ground which might work even better.
My experience is that most managers have climbing the ladder as their primary agenda. Making themselves superfluous almost always does not align with that goal.
Unless you remove the parasites that have no output. So good job removing managers. I have a start up, I am a founder and I'm doing the same thing!