A curious mixture of the Internet and Agile development has led to more and more companies eliminating middle management. Some have eliminated management altogether. This talk explores this trend, discusses how modern corporations resemble feudal societies and why they're less likely to innovate.
We then survey many "managerless" companies that have arisen today, but also cover many highly successful, large, managerless companies who have been with us for decades, including some whose products you probably have in your home.
1. You’re Killing Managers
Keep it up.
YAPC::EU Keynote, Bulgaria, 2014
Curtis "Ovid" Poe
http://allaroundtheworld.fr/
August 26, 2014 Copyright 2014, All Around The World
2. Why Aren’t I Talking About Perl?
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3. My Goal is to Inspire You
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4. Agile is Spreading
“The Best Kept Management Secret
On The Planet: Agile”
Forbes, April 2012
http://www.forbes.com/sites/stevedenning/2012/04/09/the-best-kept-management-secret-on-the-planet-agile/
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5. It’s called a “bubble”
Photo by Hartwig HKD — https://www.flickr.com/photos/h-k-d/2595755975/in/photostream/
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6. The “New” Tech Industry …
• Needs to move fast
• Needs to adjust to its environment
• Iconoclastic by necessity
• Old-school versus new-school
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7. The Elephant in the Agile Room
• Why do self-directed teams need managers?
• The “unsolved problem” in Agile
• Traditional management doesn’t work
• So … history
http://www.flickr.com/photos/hbarrison/7522705738/
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8. Hunter-Gatherers
• Follow the leader
• … or die
• Not much hierarchy
A Kali'na hunter with a woman gatherer.
http://commons.wikimedia.org/wiki/File:Kalina_hunter_gatherer.jpg
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9. The Feudal Era
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10. The Corporate Era
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Bill Gates, Berlin, 2013
http://www.dts-nachrichtenagentur.
de/kostenlose_bilder.php
16. Feudal Inefficiencies
• Local allegiances
• Poor internal communication
• No price signals
• No internal markets
• Command-and-control from king to serf
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17. Corporate Inefficiencies
• Local allegiances
• Poor internal communication
• No price signals
• No internal markets
• Command-and-control from CEO to serf
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18. Why Do Corporations Struggle?
• Why don't big companies innovate more?
(Forbes)
• Why big companies can't innovate.
(Harvard Business Review)
• Why is innovation so hard for large companies?
(Game Changer)
• Why small companies have the innovation advantage.
(entrepreneur.com)
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19. The Dark Side of Analyst Coverage: The Case of Innovation.
(Journal of Financial Economics)
Used under “Fair Use” copyright exception
http://villains.wikia.com/wiki/Darth_Vader?file=Lord_Darth_Vader.jpg
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20. Public Companies
• Share prices tied to compensation
• Share prices tied to job security
• Share prices vis-à-vis company takeover
• Share prices as a measure of success
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21. Share Prices
Keeping share prices high
requires minimizing risk
Jashuah - Own work by uploader, data from Stooq - http://en.wikipedia.org/wiki/DAX#mediaviewer/File:DAX.png
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22. Share Prices
Minimizing risk
=
Minimizing innovation
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23. If we are willing to die for Democracy and Capitalism
… why don’t we allow it in our corporations?
By Dan Smith (Own work) CC-BY-SA-2.0 http://creativecommons.org/licenses/by-sa/2.0 via Wikimedia Commons
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24. Why Bother?
• Little personal incentive
• Risk averse/hide-and-seek
• Blame avoidance
• Groupthink
Dilbert image, created by Scott Adams, used under “Fair use” copyright exception
http://en.wikipedia.org/wiki/Dilbert#mediaviewer/File:Dilbert-20050910.png
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25. Why Do Feudal Corporations Exist?
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26. Why Do Feudal Corporations Exist?
• Brand recognition
• Mature products
• Financial reserves
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1924 IBM Logo
27. How Do Large Corporations Cope?
• BBC Blue Room
• Funding startups
• Litigation (“Hello, RIAA”)
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29. Basecamp (formerly 37signals)
• Basecamp, Highrise, Campfire, Rails
• 35 to 40 employees
• Self-organizing teams
• Reluctantly trying “middle manager” role
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30. Github
• Github!
• 200+ employees
• Self-organizing teams
• Reluctantly trying “middle manager” role
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31. VALVE
• 250+ people
• Better profits/employee than Google or Apple
• The platonic ideal of Agile?
• What are corporations for?
http://blogs.valvesoftware.com/economics/why-valve-or-what-do-we-need-corporations-for-and-how-does-valves-management-structure-fit-
into-todays-corporate-world/
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32. VALVE
• Half-Life series
• Counter-Strike series
• Team Fortress series
• Portal series
• Left 4 Dead series
• Steam
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33. VALVE
• Entirely self-funded
• Own their intellectual property
• “Hiring well is the most important thing in the
universe. Nothing else comes close.”
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34. VALVE
• No managers
• None
• Really
Not really
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35. VALVE
• No job titles*
• Everybody is an expert
• 100% Time
• All desks have wheels
• Evaluation by your peers
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36. New Employee Handbook
VALVE
http://www.valvesoftware.com/company/Valve_Handbook_LowRes.pdf
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37. High-tech is the Catalyst
← Not that one
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38. Ricardo Semler
• Over 3,000 employees!
• 24%-27% annual growth for 25 years
• All employees share profits
• Many employees choose their salaries
• Employees vote for managers
• "Leading by Omission" speech (Google it)
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39. Semco’s Three Values
• Democracy
• Profit-sharing
• Transparency
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40. Other Managerless* Comapanies
• Morning Star Foods
• W. L. Gore & Associates
• Zappos.com
• Medium.com
• … and many more
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41. Agile — Products Over Process
• Managers process
• Workers produce
• → Workers over managers
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42. Managerless companies
• Usually Agile/Lean
• Usually tech companies
• Usually privately funded
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43. Known Unknowns
• Can managerless succeed long-term?
• What social changes might this entail?
• Where are managers required?
• Best practices?
• Holacracy?
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44. We
• We’re the ones doing this
• We’re changing how business is being done
• And we’re making things more fair
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45. Summary
• Corporations == Feudalism 2.0
• Agile reduces need for middle management
• We don’t know what the future holds
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If you’ve ever wondered what happens in a corporate training session, this is it.
This bubble keeps them out, and us in.
Anyone who thinks that Amazon is so successful because they slapped a Web interface on a bookstore is missing the point.
(Oversimplified history)
Tend to be more egalitarian
Tend to be more communal
Picture: Kali’na hunter-gatherers in South America
If you were in this structure, you didn’t think to question it because it’s what you knew.
If you were in this structure, you don’t think to question it because it’s what you know.
Ricardo Semler’s description of a textile corporation
You can leave the company. Room for advancement. Incentives and motivations are different.
You can leave the company. Room for advancement. Incentives and motivations are different.
You can leave the company. Room for advancement. Incentives and motivations are different.
You can leave the company. Room for advancement. Incentives and motivations are different.
I tiny team dedicated to innovation, while the rest of the company remains static
They didn’t see themselves as inefficient because it was all they knew.
Dark side of analyst coverage: study demonstrating the more financial analysts cover your company, the less innovative you are
Dark side of analyst coverage: study demonstrating the more financial analysts cover your company, the less innovative you are
Obviously, private companies have more freedom (ValvE)
Innovation is a long term strategy but minimizing risk is a short term strategy
When Amazon first turned a profit, Jeff Bezos said it was an accident — they hadn’t meant to turn a profit yet
Large companies often do large projects which means that blame avoidance is a critical strategy to keep your job (tied to ignoring sunk costs)
http://www.ft.com/cms/s/0/863409bc-5fca-11e0-a718-00144feab49a.html
Hide-and-seek is easier when the management graph is complex
Part of this is because “internet speed” is relatively new.
Nobody gets fired for buying IBM
1924 IBM logo, the company formerly named The Computing Tabulating Recording Company
Some corps fund start-up "incubators" to tap into startup innovations
If you can’t stop your competitors, crush them.
Much
Much of this is unsubstantiated research
Recently celebrated 10 years of not taking a single decision as owner.
Democracy can work better for a company than a country because the problem space is smaller.