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Companies with a flat structure are weird (rkoutnik.com)
81 points by RKoutnik on Mar 15, 2015 | hide | past | web | favorite | 70 comments

I've only got experience of one flat structured company. There, the 'flat' structure is almost entirely fantasy. The company is very hierarchical, but hierarchical on the basis of the way individuals command (and collect) influence and power. One employee described it as 'who's got the biggest dick'.

Which means that people who are naturally political end up with all the power, even if they don't make good decisions, and they aren't held accountable for their management activities, because the fantasy is that they're not managing anyone. And introverts or people with alternative ideas (especially ideas that threaten the alphas) tend to be dumped on, badly peer reviewed and fired.

Although this company receives praise inside and out for its flat structure (even the CEO is just one of the team, don't you know!) All it has done is replace professional management* with management by popularity, from what I can see.

[Edit: It has already been mentioned in other comments as an amazing example of wonderful flatness! :D It's PR is good, I'll say that!]

There is more than a little of the high school atmosphere, to be honest. Not somewhere I wanted to work (I was there as a consultant for a month).

I'm curious if it is very different elsewhere.


* I acknowledge that 'professional management' is hardly universal, btw! No lack of realism from me on either extreme.

The Tyranny of Structurelessness is essential reading: http://www.jofreeman.com/joreen/tyranny.htm

Informal power structures exist everywhere, and they're usually considered bad. One of the reasons humans developed formal hierarchies is to minimize the influence of these informal power structures. Doing so allows an organization to set consistent patterns that can vastly increase efficiency over more arbitrary and capricious systems.

Flat organizations emphasize informal power structures and you'll find that surveys of employees in flat organizations point to consistent and repeatable problems.

Summary of most of the surveys: for the most part, any employee who hasn't made it to the "in" clique (which will be most of them) is in for a miserable time.

A non-scientific bit of insight can be gained from looking at the employee reviews of notable flat/structure-less companies on glassdoor.

>One of the reasons humans developed formal hierarchies is to minimize the influence of these informal power structures.

This is a bizarre assertion. Humans developed formal hierarchies because people with swords thought they were an efficient way to steal surplus wheat from peasants. The fact that after millennia of living under hierarchies, people don't have good skills for living without them doesn't mean we chose those hierarchies in the first place.

You didn't provide the rest of the quote

"Doing so allows an organization to set consistent patterns that can vastly increase efficiency over more arbitrary and capricious systems."

You've simply stated what I stated while claiming to disagree with it, while using a perfect example of why it's true.

What you miss at the end is that humans will always organize into hierarchies. Informal hierarchies are something built into us as a species, and instinct to organize our social groups. But brains often beat instinct, and our ability to use our brains to build more efficient social structures than our ad-hoc instinctual ones has demonstrated to be better over the long run.

The reality of the human condition is that many people want to be "under" someone. Having complete freedom is both time consuming and exhausting. We already spend an inordinate amount of time making choices, it's nice to have many of them already made for us (or at least having our selection limited).

Yes, you're right, this is why people are always saying things like, "I love my boss," "I really like other people telling me what to do all the time," and "I'd really hate to be able to work for myself."

Hierarchies are not the only way to divide labor.

I did no such thing; you just totally missed my point. People did not adopt hierarchies; they were pushed on them by violence. People fucking abhor hierarchies. That's why "the boss" is a universally despised figure.

You don't seem to understand how militaries are organized.

"Which means that people who are naturally political end up with all the power, even if they don't make good decisions, and they aren't held accountable for their management activities, because the fantasy is that they're not managing anyone. And introverts or people with alternative ideas (especially ideas that threaten the alphas) tend to be dumped on, badly peer reviewed and fired."

This pretty much describes my experience of traditional management everywhere I've worked, minus perhaps the line "because the fantasy is that they're not managing anyone". How have you seen things be different in a company with traditional management?

Thanks for the response. Sorry to hear that's been your experience.

I've been into quite a few companies in the same industry as the one I mention, that are roughly the same size (a few hundred people) and most aren't as toxic in that way. There is more HR, policies, feedback on performance, less (but not zero) patronage.

Tech people like to rag on managers. But I think good managers are worth multiples of bad managers. It puzzles me that more companies don't take technical management more seriously as an independent skillset, and instead let it be a kind of fiefdom for little Napoleons or a step in the career progression for a programmer.

> Which means that people who are naturally political end up with all the power

I am socialist/anarchist and that's exactly why I am against flat structures. The solution is so simple - democracy. It's pretty much a one rule, which is prescriptive - everyone gets the same amount of power. So it doesn't matter what you do, if you do politics, or do something technical, useful or not, at the end of the day, we clean the tables and have the same amount of power again. Then there is not much point in politics, if you can't amass power.

I wish more honest technical people (or those who don't want to be involved in politics) understand that. I don't know, sometimes I tend to think that majority of people simply want politics and the power hierarchies.

The largest issue right now in management imo is the fact that you get either knowledgeable in your field manager, that understands your needs but totally fails in the field of managing, business and negotiating with upper leadership, or you get guy that will work out some great deal for team, will be able to resolve issues and talk to the team, but is failing to understand working process behind what people under him do and that is demanding for team to meet the impossible quotas.

Companies should romance with duopoly - where there are 2 managers, one sport coach style guy, that works for improving quality of employee environment, understands their needs but yet demands results and second tech guy that overlooks work progress, helps with his knowledge and provides an ideas and workflow.

I believe you just described the ScrumMaster and the Product Owner in the SCRUM methodology: https://www.scrumalliance.org/why-scrum/core-scrum-values-ro...

That sounds an excellent idea.

Although I would suggest you could almost automate the sports coach ...

We still think in factory-like management patterns for knowledge work (eg company charts, top-down decision, etc)

I believe we are on the verge of truly understanding how to "manage" knowledge workers. (apart of empty phrases)

Imho flat, no-manager, etc are overcompensation combined with a miss-understanding what management nowadays should be (establishing processes and enable communication when processes fail – not decide)

"Any sufficiently complicated company w/o management contains an ad hoc, informally-specified, bug-ridden, slow implementation of management" https://twitter.com/wycats/status/368752712894017536

Open Source is a flat structure and seems to work in many awesome ways.

There will always be hierarchies, but more naturally occurring ones seem to evolve better and work better for the ones involved in the doing/building/engineering part.

Meritocracy yes, but also entirely based on contribution and delivery which is actually quite efficient. No location required in OSS either, it is remote and akin to freedom one might say. Are there problems? Sure, but that is where you fork and diverge, may the best path win.

Great observation! I didn't think about the FOSS model of management as I was writing this - only startups. The meritocracy model works even better with FOSS - blowhards who can't deliver don't get very far when there is nothing but delivery to be done.

Both models (FOSS/Startups) are somewhat vulnerable to those who are the loudest winning by sheer volume. In both cases the BDFL/CEO can intervene but it wastes time/energy when it's needed most.

True, OSS is also usually more philanthropic in that many times it isn't directly a paid situation or most times which changes the dynamic. However many people do OSS to attract business with as well or specifically to do business on that isn't controlled by a company i.e. Linux, Rails, Python etc.

I am sure in a flat company, compensation is probably the toughest part as it can easily turn into a popularity/tribal thing possibly unless there is some set ranges and agreed upon structure. I wonder in a flat company if compensation needs to be more open.

I haven't heard of enough companies that are open about their open compensation, but Buffer seems to have it handled pretty well: https://open.bufferapp.com/introducing-open-salaries-at-buff...

The difficulty lies in quantifying experience - there loads of ways to pull that off (and none of them quite wrong). Years of experience, type of hackery, FOSS contributions, etc. I'd say the best option would be to pick one and stick with it. If you're properly open about it, those who take issue with your system won't apply.

Open Source is in fact a democracy. The most general definition of democracy is: Everybody in the group has the same amount of power, which is defined by "shared understanding" how things should be, and usually by having an explicit rule in place that enforces the same amount of power for everyone (in small groups, the rule may be just informal).

In OSS, everybody has the same access to the source code. That's the power from the definition, and the OSS license is the explicit rule.

Because of the explicit rule, if someone goes power hungry on one extreme, the rule guarantees that he will be ousted (via forking the source), and other extreme, if someone is not interested in politics (like someone actually working on the code), they won't get screwed, because they will always have the source code access according to the rule.

People in the past tried it, naively, without the explicit power rule. That was the MIT license. But they got screwed (divided and conquered) by people who wanted power, who wanted to close the source. That's why copyleft (i.e. democracy) was invented. (This actually happened on the metagame level - now the BSD type licenses mostly work because people always can fall back to GPL.)

This is not universally true. In fact, most larger successful projects have a "Benevolent Dictator For Life", either explicitly or implicitly.

Linus has Linus. Python, Guido. Ruby, Matz. And so on.

True but those guys are mostly language creators which are unique and rare and kind of needed to get people to start using them. Many of these guys worked on the languages alone for years if not near decades before others come in. The BDFL gives some hope that the language will stay true.

Other projects a BDFL can emerge or the original creator is polled for direction but largely they are there to keep trust in the platform.

Here's some really cool code_swarm looks at Guido and his long journey as the sole fighter for Python, bring it to the masses alone for 5+ years: https://vimeo.com/1093745 This video gives a unique look at the meritocracy team behind Python and how they contributed over time, fading in and out.

See all of them here: http://vis.cs.ucdavis.edu/~ogawa/codeswarm/ has Eclipse, Python, Apache, PostgreSQL.

Yes, if one person has the authority to accept changesets, and other people do not, that's inherently not a flat structure.

> "Open Source is a flat structure and seems to work in many awesome ways." and "... naturally occurring ones seem to evolve better and work better."

I agree that open source is awesome but successful projects are not at all 'flat' structures. Just think about all the governance processes that are necessary once a project grows beyond a certain size. These allow a project to achieve some kind of longevity. Simply thinking about who has commit access should indicate that there is clearly some form of hierarchy (at least, some form of 'in-crowd').

If you think that the 'naturally' occurring hierarchies work better, then I'd posit that you've only been in the 'in-crowd' for those projects -- of course it's difficult to see the downside from that vantage point.

You make a good point but I think in OSS projects merit is the only product being sold so meritocracy works. In a for profit organisation, you would always need a management layer because the focus should always be the product and not the individual contributors.

Even then, meritocracy is a pretty loaded term. The rewards don't align with the accomplishments. Being active in open source either requires huge sacrifices in time and career advancement or it requires an employer who provides time and opportunity to work on open source. That's not quite a meritocracy, as some are set up to succeed better than others regardless of skill.

As Jo Freeman once said:

"Contrary to what we would like to believe, there is no such thing as a structureless group. Any group of people of whatever nature that comes together for any length of time for any purpose will inevitably structure itself in some fashion. The structure may be flexible; it may vary over time; it may evenly or unevenly distribute tasks, power and resources over the members of the group. But it will be formed regardless of the abilities, personalities, or intentions of the people involved. The very fact that we are individuals, with different talents, predispositions, and backgrounds makes this inevitable. Only if we refused to relate or interact on any basis whatsoever could we approximate structurelessness -- and that is not the nature of a human group. This means that to strive for a structureless group is as useful, and as deceptive, as to aim at an "objective" news story, "value-free" social science, or a "free" economy. A "laissez faire" group is about as realistic as a "laissez faire" society; the idea becomes a smokescreen for the strong or the lucky to establish unquestioned hegemony over others. This hegemony can be so easily established because the idea of "structurelessness" does not prevent the formation of informal structures, only formal ones. Similarly "laissez faire" philosophy did not prevent the economically powerful from establishing control over wages, prices, and distribution of goods; it only prevented the government from doing so. Thus structurelessness becomes a way of masking power, and within the women's movement is usually most strongly advocated by those who are the most powerful (whether they are conscious of their power or not). As long as the structure of the group is informal, the rules of how decisions are made are known only to a few and awareness of power is limited to those who know the rules. Those who do not know the rules and are not chosen for initiation must remain in confusion, or suffer from paranoid delusions that something is happening of which they are not quite aware."

Her comments were aimed at the feminist movement of the 1970s, but her essay is universal and everyone can gain from reading it:

The Tyranny Of Structurelessness


Valve is another company that has a very interesting org chart. It's like those vegan fair-trade restaurants that run as a work co-op, and the people show up and work and share responsibility and profits.

I don't know how it works, but it's a thing of beauty when these systems meet the needs of the people inside them.

Jeri Ellsworth, who worked for Valve building hardware, described a lot of shadow-management going on when it comes to larger scale:

http://www.wired.com/2013/07/wireduk-valve-jeri-ellsworth/ (best text version I found, podcast with the actual interview is linked at the end)

“But the one thing I found out the hard way is that there is actually a hidden layer of powerful management structure in the company and it felt a lot like high school. There are popular kids that have acquired power in the company, then there’s the trouble makers, and everyone in between.”

The problem as she sees it is one of scalability. What works for five or 20 people doesn’t necessarily support 300.

There are some articulate descriptions of how it does or doesn't work at Glassdoor: http://www.glassdoor.com/Reviews/Valve-Corporation-Reviews-E...

Yes, Valve is an amazing example of a flat company. I had intended to talk about them in my original essay but couldn't manage to make it fit in anywhere. Their employee handbook is a fantastic read on how knowledge workers should work together: http://www.valvesoftware.com/company/Valve_Handbook_LowRes.p...

Your comment makes it sound like you've worked there, is that so?

Yes, its all flat and community driven ... until one day you come to work and get informed by Gabe ALL of your team is being fired, with no warning.

Also worth a mention is Teamtreehouse and their "no manager" rule: http://blog.teamtreehouse.com/working-in-a-flat-company

There is always a hierarchy. The only question is if its written down anywhere. And even in companies with an explicit org chart, there is often an informal one which is more powerful.

The hierarchy doesn't always match what's written down either.

I think everyone has felt they are "doing someone else's job" at various times in their career.

The "we have no managers" thing is kind of a lie. You put 10 people together in a room and a leader naturally appears.

I think the point of the flat management structure is not having leadership roles cemented onto an employee job title.

Someone who comes out as a "natural leader" should be a good thing, no? It means people who shouldn't be leaders, cannot assume the position without turmoil. (in theory anyway)

Not everyone who thinks they are a "natural leader" should be given that sort of power.

It can be a recipe for a loudmouthed strongman to drive a group over a cliff. Better to have groups of people who know and trust each other and who have a common task to guide them.

Remember that at a flat company, you don't have to stay on the bus with the loudmouth. You're free to leave any time and do something else, or even work on the same thing in a different room. Get enough people to do this, and the loudmouth stops being a problem. If the loudmouth continues to fail, his performance will be an issue and he might be fired.

Contrast with a traditional company where the loudmouth is a manager, you're not allowed to move your desk, and dissent (like working on something else, or ignoring the guy) leads to HR action.

> You're free to leave any time and do something else,

Unfortunately the loudmouths will remember this come review time, and obtain their vengeance.

Flat companies seem to drive people to do highly-visible hero work to ensure they can garner enough positive reviews, rather than the quiet but essential work that leads to 'dunno what he did all year, requires improvement'

Once, I tried management in a traditional "tree" company for a summer. Among my reports were two individuals, one of whom was a pretty good coder who didn't want to talk to anyone, the other was an utter incompetent who could barely speak English (I have no idea how he was still employed). Both worked with closed doors and neither talked to anyone, and neither of these guys did very well on reviews [which I wasn't involved in, since I was just a substitute manager].

You didn't want to be either one of these people when the layoffs hit. Your own manager might go to bat for you, but nothing says "keeper" to other managers like a nice string of public and visible wins.

If nobody knows what you are working on, that's a problem in any company. It's probably worse in a flat org, but it's still bad in a tree.

Self promotion is necessary, at least to some extent. You could be a great engineer but in a tree structure you're going to get passed over for interesting projects because nobody knows what you can really do. In a flat org you'll ideally get feedback that you can work on before your ass gets fired, but you can't count on it.

It's 50/50.

A natural leader is someone who shows experience, competence or ability to coordinate and resolve conflicts, so it's bound to be respected by his peers.

On the other hand, the leadership can be disputed at any time (because it's a situation, not a job title), creating some toxic environments, specially if tough / unpopular decisions have to be made.

People can become leaders and then turn out to be bad for the group. It's also harder to hold non-official leaders accountable and to make sure the not-so-glorious aspects of management are taken care off.

I always found this a strange concept - I had to give examples of when I displayed leadership skills when applying for jobs fresh out of university. I personally find if I am the most knowledgeable on a subject then I will natural assume a kind of authoritative role on it. Otherwise I am happy to sit back (not saying I do nothing, but I will let other people take of the "leadership" role).

People who consider themselves "natural leaders" (usually pushy loud types) are unlikely to be the best person to be leading many, if not most tasks.

The problem with natural leaders is they end up having to make decisions "above their pay grade". The risk of the decision going badly is not factored into their compensation providing very little once give for leadership other than " I can't stand the leadership vacuum and will fill it myself if nobody else will".

I say this because personally I fall into the latter category. I've stepped into plenty of risky roles because no one else would do it. The rewards for doing so were nonexistent.

You put 10 together people in a room, and a manager, and a natural leader will still appear... and help everyone else work with the manager.

You put 10 people together in a room, and say no one is in charge, and one person will realize that means they can be in charge.

Is that the "natural leader" or someone who wants power?

I think a lot of Flat Structure criticism is actually directed at companies with no structure [1]. Where it works well, the structure also seems to be built with a good understanding of a Manager's duties (which can be distributed) versus the requirements of Leaders and (in private enterprise especially) Entrepreneurs [2].

[1] http://www.wattsnext.com.au/Flat-structures-look-good-on-pap... [2] http://www.shirlawscoaching.co.uk/shirlawsresources/2014/3/1...

IMO, Decentralized Decision Making is one of the fundamental characteristics of a flat organizational structure. Nowadays, at many places, 'flat structure' is being wrongly understood as 'easily approachable management'. However, such companies don't understand and don't conduct decentralized form of decision making. I would not prefer to go after literal meaning of the word 'flat', but at my organization, if I am able to conduct decentralized form of decision making in an effective manner, I would be happy to call it a 'flat organization'.

As an aside, "Is it acceptable to browse Facebook while you shunt the problem to a mental background process?"

I'm interested in how many productive engineers here think this is what they're doing for at least some of the time they browse facebook? Vs how many think they're just bunking off?

I get the idea of mental background processes, very often I will solve problems that I failed to solve at work while on my bike ride home at the end of the day. Personally I suspect facebook might be too full of distractions to achieve this, though I'm open to other opinions..?

I would tend to say no, or at least admit you're just goofing off. For background time, I have a long list of articles to read that have to do with either my industry or the technologies I'm currently using.

For actual "I need to get up from the computer time", don't read Facebook. Go take a walk, or go chat with a workmate about a current problem and see where the discussion goes.

Can't speak for many, but I do both things. Not facebook specifically, since I try not to do too much of it at work (with varying success), but reddit and HN and such. Taking little breaks and reading a blog post or something can be fairly relaxing, and sometimes if you're stuck you can switch gears and come back to the problem with fresh eyes.

There's also 'background processing', which happens during physical activity (had a coworker who left around 2 to go running and rock climbing, getting her most productive time in after going home at around 4 or 5pm), chatting with coworkers, getting a snack or some water, that kind of thing.

They're separate, but I (and most folks I know) do at least a little of both.

In the case of a small startup, a "flat" structure is sometimes simply a description of what the group have worked out in order to be productive and effective. In cases where I've seen firsthand a fairly hierarchical management structure, decisions were often carried out in an abstract, awkward a manner that was in many cases not in the best interests of the company.

I've seen it done many ways. My intention with this essay was not to create a comprehensive reading on the subject but instead to communicate about what I've learned thus far (from experience, observation, reading, etc).

I had hoped to come across in favor of a flat style with the admission that there are times when direct authority is the best solution to a startup's problems. How'd I do?

There was no place in history of humans where no-manager system would work long term. Even communism was based on leaders.

Democracy - the system closest to it is being picked as best in the world as any other system attracts tyrants that gather unlimited power in their hands. Yet it still have leaders.

Getting rid of leaders is causing confusion and most companies that claim they have no managers will still have them, but under different name, like team leaders, project supervisors etc.

There's a difference between leadership and authority.

Authority creates leaders. When you will get rid of labels you will see it. Only authority on the very bottom of the ladder can avoid creating leaders (public servants, group organizers, speakers, front line support etc.).

If authority and leadership were reversed in your reply it would make more sense.

While leadership can lead to authority, leadership relationships unlike authoritative ones can arise consensually among piers. I don't think there's anything inherent to the concept of a leader (in the sense of one who guides by going first) that is dependent on hierarchy.

If you want to lead and no one wants to follow then you go alone. If you need the authority to force people to follow you, well.. that's more about desire for power than desire to reach stated goals.

I'm not an expert on the matter but my understanding is that most hunter gatherer tribes operate with something that could be described as a "flat management structure". To the extent that that is true, for the vast majority of human history such a system worked long term. Perhaps hierarchy became necessary as humans organized into large groups post agriculture, although I find the organized plunder theory of leadership quite convincing too.

Not really, in those tribes usually an elder was a leader. There was a study about it few weeks ago I have seen but I dont remember where it was.

The thing to understand is that flat management is step backwards. Every unit in community should utilize their skills. Management IS a skill. So natural leaders should be leaders. Natural organizers should be organizers and so on.

Problems are starting when artificial system is created where people are being valuated based on some idiotic scoring system instead of individual skill review.

Nerds are rediscovering socialism. Next up "Employees sharing and deciding what to do with profit democratically".

Socialism has nothing to do with organizational structure.

Not true at all, look up what Soviet actually means.

What happens when you remove hierarchy, high school happens, thats what.

the idea of a flat structure is as solid as communism but in practice it simply does not work.

the closest thing to a flat structure is feudalistic structure. here, engineers and designers are peasants (all flat at this level) and various hierarchy (manager of managers who do little to no intensive work).

the other alternative of this feudal structure is where you have an army of engineers and designers and one person telling what to do. Dictatorship works in software, decision by consensus is as useful as day trading via votes.

I'm a major supporter of open allocation (I coined the term) as used by Valve and Github, but I'm skeptical of "flat" organizations. It's not that I dislike the idea. I don't think it's really possible.

One of the reasons (at least, in theory) why legible middle management is a good thing is that they don't have to compete with the managed for visibility and work. When you have emergent pseudo-managers (or managerial favorites) who are still technically the same rank but far more influential, they use their influence in competition with the other workers and do a lot of damage: it's not a fair competition, because they take the sexy work and delegate the crap. Most Valley startups tell every engineer that he's reporting to the CTO... but then they get there, and there are 57 people nominally reporting to that CTO, which means that they actually report to the people who have the CTO's ear (and that changes over time).

I like the idea of a flat organization, but I think what you actually need is constitutional management. You need a strong set of principles ("employees are trusted to allocate their time to anything that provides business value", i.e. open allocation) and then you need official and legible managers who are accountable for enforcing them. It's better to know who is in power, so you can hold them accountable and remove them from power if they fail, than have a "flat organization" where power disparities still exist but are subtle. You need checks and balances, you need laws and you need cops but the cops shouldn't be making laws on a whim.

In other words, the optimal point is somewhere between the demarchy of the "flat organization" and the executive dictatorship of the traditional corporation.

Flat organizations, in general, make it harder to define accountability. Look at the case of Ellen Pao, for example. Venture capital partnerships are flatter than traditional corporate hierarchies and rarely have HR departments with any power over the partner level, but are still afflicted by infighting and retaliation. Pao's case is one where (a) she was clearly wronged, but (b) her legal case appears pretty weak (or, at least, lives in undefined territory). It's obvious that a creepy ex-boyfriend (or, more accurately, ex-few-night-stand) took vindictive and inappropriate steps to ruin the internal reputation of a talented female venture capitalist, and that this prevented her from having a successful career at KP. It's unclear whether the firm or its upper management is legally responsible. He was engaging in retaliation, but upper management wasn't; they were denying her promotion based on (faulty, maliciously provided) information about her performance, not her gender. It's unclear who is responsible; clearly, the man in question (since then, fired) is, but he probably doesn't have the money to make her whole. So should Kleiner itself be held responsible? That's really hard to answer. That's a problem with flat organizations in general; they still have politics and they still have good people ending up with bad reputations and vice versa, but the lines responsibility and accountability are less clearly drawn.

As a side note, I don't generally like anti-discrimination laws. I am proposing to allow EEOC or anti-trust to impose restrictions on specific companies on discrimination if necessary instead.

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