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How to organise a large org without hyper-salaried execs?

22 points by a3n ↗ HN
Counter example: https://www.thedailybeast.com/frontline-workers-are-going-without-pay-as-hospital-ceos-keep-their-seven-figure-salaries?ref=home

I feel that execs and administrators have become parasites.

How could you organise large corporations and institutions so that they don't need C suite executives? I find it impossible to believe that anyone actually does $8M plus stock and bonuses worth of work.

13 comments

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sloaken
I think a major part is the lack of independence of the boards or these organizations. The board of one hospital is made up of executives from another hospital. And their boards are made up from the first one. So they all keep supporting each other.
Spooky23
At a broader level, taxes.

When it comes to workers, the deep economic thinking is that money isn’t something that drives performance. When it comes to the back-scratching world of corporate governance, cash is king.

The public sector demonstrates that you don’t need to pay excessive salaries for many types of executive workers. The most senior generals in the military make $300k. The most senior executives of government agencies tend to make $150-250k depending on geography. The no-name CEO of some small hospital network makes $3M.

a3n
I was thinking the same thing with regard to the public sector. The generals example is really good. $300k, and they could be killed, or responsible for people being killed.
jekrkek9
Yeah my response to Marc Andreessen on what we should build:

A tax system like the one that lifted the families of these rich trolls before they lobbied to tear it all down.

Watch us make tons of money off technology that was initially funded by government because the rich, as usual, didn’t want to invest in it themselves.

IBM got gifted what would today be billions in handouts by being the only seller of machines produced originally by taxes.

It’s a mathematical fact how that all shook out for that entire generation: benefited immensely from government socialism. Then lobbied to take it away from the next generation, acting instead like a grifting middle man on their agency.

Let’s build a world that does that handout shit for everyone.

Do we build iPhone because of markets or because holy shit this is cool?

Fuck these outdated semantics for what we do shit. These guys aren’t gods.

statquontrarian
Why do you use the word parasites?

There are many examples with names such as "organizational democracy," "flat" organizations, etc. with examples such as Gore-Tex, Morning Star, etc. Here are a few starting points for you to research (I don't know much about them):

* https://hbr.org/2011/12/first-lets-fire-all-the-managers

* https://www.youtube.com/watch?v=tIxHmsWCd7g

* https://en.wikipedia.org/wiki/Teal_organisation

a3n
I use the word parasites because of the example i linked, which made me angry before my coffee.

Like many, have thought similar about the negative contribution of the growing academic administrative class, in parallel with ridiculously high tuition.

woofie11
Well, there are two correct arguments:

1) If a CEO makes a company 5% more productive, that's worth millions of dollars.

2) More expensive CEOs aren't better. Indeed, they're often worse. The selection processes are political, corrupt, and wonky.

I could do a better job than the CEO of about half of the organizations I've worked at, /especially/ the larger ones. That's not a comment about me, but about them -- many of my co-workers would have done better than I would. But we never would make it to such a position, because the skills to become a CEO are very different than the skills to run a big company.

If you figure out how to align the two....

burntoutfire
1) If a CEO makes a company 5% more productive, that's worth millions of dollars.

Only when he's 5% better (making company 5% more productive) when compared against the next-best CEO available on the market.

woofie11
... And that seems to be more-or-less a random die role influenced by corruption. Odds are, though, that CEO will be more than 5% different, and some people will /predict/ they will be more than 5% better (probably incorrectly).

There really isn't any objective way to know who the best is, or who the next-best is. If we had a stack rank, it'd be an easy problem.

afarrell
Stop publishing the salaries of executives.

Currently,

1. Executive salaries act as a signal of the confidence of the board in their leadership.

2. A successful executive who wants to jump ship can go into a negotiation armed with information about their counterparty's BATNA.

ystad
In my opinion, a hierarchical organization is the cause. In an organization, which have heavy middle and top management, is excess fat. You are paying them a lot more to "manage" the employees. This gives a lot more power to C-level executives.

It surprises me, why companies would deviate to organizing themselves as a hierarchy.

mrfusion
I think you need a flat organization. Next you need a “constitution” that governs how things get done. Examples: want to fund a new project? X% of the employees have to vote for it? Want to fire someone, y% have to approve. (Or whatever rules you want)