Love the idea of rotating "managerial" or "lead" person in a small group.
I'm on a small team within a larger organization that we support (in dev and tool usage). A challenge for us is that people in the larger org are used to having a manager to route their requests to.
I may give a rotational approach a whirl. But right now, one of my primary roles is as s&!t umbrella and I don't want to overly burden my real producers.
So what he is essentially saying is, they're an anarcho-syndicalist commune, taking it in turns to act as a sort of executive officer for the week, and all the decision of that officer must be approved at a bi-weekly meeting by a two-thirds majority.
Is this getting downvoted because people didn't catch the Monty Python joke? Or because they didn't like this specific reference (but accept the parent's reference)?
It might be because a movie reference that's relevant to the conversation at hand can be humorous, but a movie reference in response to another movie reference is just regurgitating a script. The child comment doesn't really add anything to the conversation other than "I saw that popular movie as well."
I really appreciate the idea of having a career path that doesn't involve moving "up" to management. I'm a developer because I love development, and my own personal hell is managing a team and never getting to code.
Imagine how the engineers at Google think now that they're "back in charge" (/sarcasm) I'm sorry, I know it's fun to bash on managers but they exist for a purpose and asking engineers to be in charge is a burden I don't think many want.
At Google's scale? Successfully? I find that rather unlikely. If you have any examples of this, please do share. Otherwise, all I can imagine is reducing the depth of the tree, and in some cases not to make it a strict tree, but a somewhat interconnected graph. (that said, throwing people into distinct "manager" and "engineer" bins is disingenuous anyway, a manager managing engineers had better have some kind of engineering understanding)
The Mondragon worker cooperative federation has 85,000 employees. If you look at how it's structured, it's not hard to imagine how Google could operate similarly.
I'm pretty sure the revenues on Wikipedia are off, and I can't find what reference they're using to get that number.
This study from around 2002/2003 puts their revenues at $8 billion annually with 60,000 employees. That puts their per-employee revenues at around $133k.
It looks like I got confused because whoever edited the wikipedia article came from a country that uses '.' as a thousands separator.
Looking more closely, they're a strange sort of conglomerate. At a glance, I see two banks, two insurance companies, roughly two hundred industrial companies, a dozen retail shops, a dozen food-related businesses, a dozen research firms, and ten education companies.
In a way, it reminds me of Idealab, in that each new company is a new pool of equity (with the associated incentives that result from ownership), and that failures are not punished, but rather result in retraining or placement in a different firm. (for full co-op members).
It's also interesting to see that the founder was a priest who started off with a co-operative polytechnic school and bootstrapped everything from that base.
174/employee was calculated by assuming that the period in the number of employees is a comma while the period in revenue is a period (e.g. 17M/85K employees instead of 17B/85K employees).
So those figures would indicate 174,000 Euros per employee, which makes a lot more sense.
>asking engineers to be in charge is a burden I don't think many want.
if your environment has a significant amount of elements that engineers (or generally - employees) wouldn't want to be in charge for, then you are already deep into the problem and the shortest solution here is to assign managers to be in charge of those things.
The key is to not allow the situation to degrade into creating "demand" for managers. For example, once you create one manager for a group, s/he would want to talk to somebody, preferably managers, from other groups. That burden on the other groups would naturally trigger response - creating managers in the other groups. That starts to structure the information and decision flow the way that rank-and-file employees lose much of the visibility into the product and business and thus lose the ability (and motivation) to take even small decisions, thus requiring even more management ...
While I totally buy what this espouses, I think it is probably incredibly hard to scale. They are doing well if they keep things flat(ish) for 26 employees. I can't really see it working at all for > 50.
And while they may not have anyone with the job title CTO, I'd be very surprised if DHH was anything other than the de facto CTO.
Definitely a great example... but I find it disappointing that it is pretty much the ONLY example of this kind of company at that kind of scale that is brought up when topics like this are discussed. If it worked for Semler, why hasn't anyone repeated it?
I think the biggest reason most companies don't recreate Semco's example is that nobody wants to think of themselves as expendable, especially people who can decide whether they're expendable or not, as the top management positions of a company are in a position to do so.
By saying "yes, our employees can make these decisions without us, we just have to give them the structure and support to do so", people at the top are admitting that they're not as important as our society tells them they are.
In Semco's case, Ricardo Semler was happy to admit that, because he felt the stress of running the business was killing him, and he welcomed the idea. A lot of people in his position would take anti-anxiety medication and something for acid reflux, and keep going, convinced that their position holding the reins is indispensable.
Why does it have to scale? 37signals took 11 years to get to 26 people. It might take us another 11 to get to 50. We can optimize for that future when and if it arrives. But making your environment worse today because you worry about some possibly maybe future is the essence of premature optimization.
I agree it doesn't have to scale, and you certainly shouldn't setup an organization around projected growth 2 years out. That may never come, and you also may not want it to come.
However, if you want your company to grow into a Groupon or Zynga, and you have the rapidly expanding demand to support that, then you need to scale. I don't think Groupon could run on 26 people, so they needed to scale to get to such massive revenue figures.
I specifically didn't use Facebook as an example because I know your feelings about them. I figured Groupon at least has the revenue to support their valuation :)
You have it backwards. You don't design your company structure in the hopes or anticipation of becoming Groupon or Zynga. You deal with that growth when it happens. You optimize for that scenario when it occurs.
You can't "want" your company into becoming a Groupon or a Zynga by design a certain organizational structure. Startups try that all the time by preemptively hiring tons of people to sit around and wait for the hockey stick growth that never comes.
I know, I'm not saying you should design your organization or hire around the idea that you'll be at Groupon's level in a year. That would be a waste.
Well let me ask you this. When is it the right time to reorganize and evolve from the flat structure because you are growing like gang-busters and can't keep up with the pressure on all areas of the company (support, development, sales, etc.)
I'll tell you when we get there, if ever. Although, as mentioned elsewhere in the thread, there are some good examples of enormous companies running counter-intuative-for-thier-size organizational models and doing great.
For 37 Signals it doesn't have to scale any time soon, but the grandfather was (tacitly) in reference to how many look to 37 Signals as exemplars of how to run small to medium tech businesses (why else write about it in Inc?)
I think if I already had a business of 10-15 people this would be a good model to attempt to follow. If I had a business of 40+, I would be far more wary; the question of scale is for those who may try to fit the model to their existing business.
Many companies need to scale up people as they grow because their ratio of human involvement to revenue produced isn't as high as 37signals'. Almost anything other than the specific style of product development that you guys do falls into this category.
The assumption when you publish an article is that you're doing it to provide examples to others, not just talk about how good you are. In that situation, I think it's fair to point out the limitations and areas where this strategy might not work.
I believe some sociologists found that personal relationships begin to break down at about 150. Beyond that it is very difficult to maintain meaningful interaction in person. Online relationship numbers are much higher so maybe a distributed team like 37Signals can get away with this for a while longer.
What happens if you're inspired to branch out in another direction? Would your plan be to form a new company that also stays small and nimble? What would you see as the benefits to separate small organizations v. a larger one with smaller divisions?
What about creating a career path that doesn't involve moving people into management? One that involves more prestigious titles (e.g.: sun had a 'sun fellow' title), and significant salary growth (20% here and there isn't significant, imho)
As the organization grows, i can't see a totally flat structure working - you're going to end up with people who have been there 5 years, wake up one day and realize they have the same role and similar salary to what they had where they started, realize they have no career path with their current employer, and will move on.
"you're going to end up with people who have been there 5 years, wake up one day and realize they have the same role and similar salary to what they had where they started"
1. The people who are worth the most to us are the people who do the best work. We pay accordingly. "Management-like" salaries go to the best workers.
2. You assume people want different roles. Some people do, but we work hard to hire people who love their craft and want to keep crafting. A programming being pushed away from programming, just because they've been at the company for five years, is not the desired path for most programmers who really love programming. Same goes for designing, etc.
Speaking of titles: We tend to avoid those too. We've had a good bit of debate inside the company about this, but we're sticking to staying as title-less as possible. I don't think they're worth it in the long term. They set up boundaries between people that I don't believe are necessary. Might that change if we had 100+ people? It could, but I'm concerned with the now instead of the imagined future.
Fog Creek and 37Signals are probably more alike than either of us would care to admit (ha!) and I could see Joel writing a very similar article a few years ago when we had 20some people at the company. But what works there, or at FC, is not a one size fits all answer.
Having managers when there are 10 people are at your company makes no sense. The hierarchy starts out flat, you add a few more people and you're at 20, and the idea of making someone a manager seems like a waste and something a 'BigCo' would do. "We need people who get stuff done, not people who sit around doing nothing but managing", you think. Then you get to 50 people and everything breaks down. You wonder why people are frustrated they can't get things done, while other people are doing things that embarrass your company or compete with other things you are doing. And you realize your company isn't a special little gem that is wholly unlike every other company in existence. You need management.
Just make sure you give the devs a professional ladder and compensation structure that doesn't involve moving to management, because managing isn't something everyone is good at or even wants to do. And make sure that management knows their job is a support role to the people at the company who are making things happen, not the other way around.
+1 "managing isn't something everyone is good at." How many bad developers get moved to management to keep them from causing trouble, and then cause even more?
The Peter Principle is less cynical, but probably more realistic. It's that you get promoted for doing a good job, but eventually you get promoted into a job you're not good at -- at which point you stop being promoted and you stay in a role that you're not suited for.
Note, there's nothing malicious that happens here. No one is trying to promote a bad developer. People are largely doing what they think makes sense -- promoting top performers.
The usual money quote for the Peter Principle is, "in a hierarchy, every employee tends to rise to his level of incompetence" -- but I like your summation so much better.
"[C]ompanies tend to systematically promote their least-competent employees to management [...] in order to limit the amount of damage they are capable of doing."
"But what works there, or at FC, is not a one size fits all answer."
Absolutely. I'm simply sharing our experiences with how we run things - that's what my Inc. articles are about. I wouldn't expect anyone else to do what we do because we do it. Find your own comfort zone. There are plenty of ways to do plenty of things.
I for one appreciate the insight into how you run things. I especially liked the point you made about encouraging mastery (horizontal) instead of managerial (vertical) promotion. So, thank you for sharing.
I really like your approach, especially making everyone manager for a week. I think the only problem I see with it is that if people want to find another job, their 37signals title makes it seem that they essentially "went nowhere". So even if you are paying them a lot more then when they started and they are the best customer service person ever, their resume still says: "Jane Doe - Customer Service Rep 2005-2011" which looks unimpressive elsewhere.
Although they will have had the experience of being a manager (albeit for 1/4 of the time), and having been in both the manager and employee role during the same time period, they probably end up learning more about being a good manager than most people who have the title "Manager". With 4-5 people, I think it makes a lot of sense.
My company handles this by giving you whatever title you want. When I started, my boss sent me an email: "Give me your full name and title, as you want it to appear on your business cards."
If they worked in such a high profile company like 37signals and did good work, all they need is ask for a few references and they can easily land a good position (if not making full use of their experience to run their own company).
We solved this in part by using "cocktail titles". So anyone who works here can call themselves senior. So we have "senior designer", "senior programmer". At least that has some ring of fancy.
If you liked Maverick, you should definitely check out Seven Day Weekend by Semler. I found it much more readable and relevant. It's crazy that it's out of print in the era of the Kindle
Rotating roles is great for a small company when the amount of managerial activity is very small. But creative work and manager work don't mix well. Being a manager requires responding to things that are happening at that moment (interruptive), which essentially destroys 'the zone' required for getting things done as a creative (developer, designer, etc). The other problem is that most people aren't cut out to be good managers, and learning to be a good manager is a skill - the more you practice the better you get. You start to see patterns and figure out how to deal with them. But rotating roles could help when you are first starting out to figure out who has the manager chops, and who sees it as a burden. Ideally the less time your company spends managing, the more time you can spend making cool stuff, so if the workload is small - go for it.
This is really true, and something we are experiencing now in the company I am working for. Traditionally we've been a company with ~12 employees, small project teams of 1-4 people. Now the company has expanded to over 40 employees over two offices, with team sizes becoming larger than 10 people.
We have experienced the exact difficulties you have described, and have been slowly adjusting to create just enough structure to organize and motivate people. I would add that an additional area that becomes more important as a company grows is communication. Once the company gets past the size where the CEO/Director is getting around and talking with each employee on a weekly basis, and physical walls start to grow between teams, communication becomes much more difficult in both a vertical and horizontal sense (a side effect of added hierarchical structure i suppose?).
Jason seems to imply that managers are useless when he says "We do not have room for people who don't do the actual work".
I think this is very naive of him, and a little selfish. He's enjoying the title of "President" which, to me, is a purely managerial position. I doubt if he considers himself useless, but he's happy to label other managers useless. I might be wrong, but it seems that he's either too selfish to see other people take away some of his control or he's afraid to tackle the problem of a growing company. Both of these will have negative consequences in the future.
Just for the record, over my 14+ years in a technical field, I have been a manager for 5+, and have given up that title twice before to focus on more technical work.
Jason is a designer by trade, and is routinely involved with the design of 37signals' products. In the same vein, DHH is a partner in the company, but still writes code (as I understand it).
To clarify... "President" isn't a title I use, it's a title often ascribed to me as the founder of the company. Whenever anyone asks for my title I tell them we don't have titles. If they require one for whatever they are writing, I say you can say president or founder if that works, but I'd prefer if they didn't say anything other than founder since founder isn't a title as much as it is a fact.
Re: design. Yes, I design. It's the primary thing I do. Design, sketch, work on product simplification, design/think about user experience, etc. DHH still codes as well (he's working on some nice enhancements to Highrise right now, in fact). Both David and I would prefer to design and code all day, but it's not always possible. Lately it's been more possible so we've bee doing it more often.
"Jason Fried is the co-founder and President of 37signals."
and
"Jason co-wrote all of 37signals books, and is invited to speak around the world on entrepreneurship, design, management, and software."
with that kind of workload, I assumed you wouldn't have enough time for anything else. I never said whatever you do is useless. Far from it. Non-technical work that is focused at growing a company is more important than any technical work. After all, what can you do with an insanely great product that you can't sell because you didn't prepare for it properly?
He's enjoying the title of "President" which, to me, is a purely managerial position.
I doubt that what he does in that position is purely managerial. I think you may have a hard time seeing why they value what they do if you impose your own viewpoints on them.
Perhaps you're right. With a smallish company, it's possible for everybody to jump in and do whatever needs to be done. As a company grows, though, this will become impossible. Many a great company in history have suffered spectacular deaths simply because they couldn't scale correctly with their success.
In my opinion, it will be impossible to have 200 employees with a flat structure.
I don't care about what 37signals might/could look like at 200 employees. We have 27 employees today and we grow slowly. We're optimized for today. If we have to change down the road we will, but there's no sense in spending even 5 minutes worrying about if what we do today will work when we're 10x as big.
> What we learned is that adding a dedicated manager and creating a hierarchy is not the only way to create structure.
I think the misconception with the article is that the title (and focus) is "Why I run a Flat Company" as if this should be the standard for modern business. This works for 37signals, because (1) you have actively chosen to grow very slowly when you could have otherwise grown much faster and (2) you've had the fortune and ability to attract some very good people. Many businesses don't desire to do number 1 and find it very hard to do number 2.
To clarify, we think everything we do is marketing.
From how the error messages are written, to customer service, to copywriting in our emails, to the cancellation process, to clarity of message, to how every single thing in each product works, it's all marketing. Marketing is everyone's responsibility. It's the sum total of everything we do.
37Signals is ubiquitous in a certain way on the internet - we are smiling! We are about our products! No look over here we are about education! Come to our conference and learn how to run a small business! It is like Martin Fowler and Joel Spoelsky had a child and it was nurtured by Saatchi and Saatchi.
This sums it up in my mind - this is just smart business. Having such a core need of a business being wrapped up in a "Marketing Department" contributes to a lot of corporate BS in many corporations.
Simple products mean less support requirements. Although, we're going to be growing the support team so we can reduce the ticket load per person and create more time for other support-related writing/design projects.
I would presume they use the same technique that Brent Simmons suggests: treat customer support as an engineering constraint, and design solutions to minimize common support problems. The quick feedback loop of the web makes it much more possible than in other industries.
"Besides being small, 37signals has always been a flat organization."
..
"We've experimented with promoting a few people to manager-level roles."
So they are flat, with no chief anything, but they have 'manager-level roles'? Am I missing something or is there a contradiction in his description?
Edit: Got it, 'experimented' meaning that they tried, didn't work, and they went back to flat. Thanks for the responses.
Besides that I find that even with no job titles or formal roles, people within a company tend to self-organize and take on de facto roles. The only difference is that it isn't formalized, and people who end up managing aren't being paid manager salaries or getting manager options.
My cocktail title at 37signals is "Product Manager," so whatever experiments are going on with management aren't completely past tense. I do UI design, work with the programmers, help design and dev work together and contribute strategy ideas to the partners.
Despite the cocktail title, there still isn't a clear "path of authority" or anything like that. The buck stops at the partners, and the rest of us function like a meritocracy. The ones with a track record or expertise on a given topic have a respected voice, and there is always opportunity for expertise to shift or widen over time. It's that fuzzy-edged quality to the role that makes it feel experimental for me.
We've experimented. That's how we've become more confident in our decision to be as flat as possible. We believe it continues to be the right direction for us.
Re: manager's options... We don't offer options so that's not an issue.
What Jason Fried is expressing is something I've been pondering for a while. And I think we'll (hopefully) see more of it (sorry, manager-types).
In my experience, managers in most departments have essentially taken the role of sheep-herders. So, I started to ask myself: why do I need a manager when I work well on my own, making smart, educated decisions that are based upon the ideals and successes of other smart, educated and passionate people?
After all, I'm being hired for my prowess, no? If I am, do I need a manager? And shouldn't you always hire people who have these sensibilities?
I think the message I find within this rubble of contemporary and progressive ideologies is: Hire smart. If you have a good team who understand their roles and how it pertains to the goals of the company, you don't need managers - not for a small or mid-sized company, anyway. Basecamp has been the best PM I've ever worked with - alive or binary. Software has already begun to facilitate the role perfectly for me.
Though I am a dreaded project manager, I agree mostly to what you are saying. But in the field I work in, advertising, I do think that its necessary and that my value is additive.
My responsibility is mainly to be a shit umbrella, so my creative and developers can do work, especially when we're all working on multiple clients. I'm not doing my job when I have to have them in meetings, in fact we don't meet save for face-to-face discussions.
That and of course dealing with the rowdiness of clients, hammering out scope, keeping things to scope, and being the bad guy when necessary with the client. (This is actually harder then people realize, our default human reaction is to help people, and it requires taking abuse in the extremes that is simply part of your job)
I would say in high-output environments that a PM is a good thing, if the PM in question is good at being a PM. I've met a few, but many more terrible PMs unfortunately.
Oftentimes PMs (or better, their organization culture + workflow) have thrown a wrench or 2 into production and caused cascading failures because they forgot a detail, or couldn't admit to fault. The culture is surely to blame amidst most of these catastrophes.
The fact that you can admit that your PM skills need work already makes you a frontrunner for being a much better PM than most.
The central problem I see is most PMs don't want to be PMs, and are tricked into being hired as account people. I like what I do, and my team knows I have their back, we do quite well together.
I like the shit umbrella metaphor. I have recently taken up some PM-type work, even though I am technically an engineer, and a junior one at that. Now it is mostly cleaning up some stuff and keeping other engineers out of the wind. Things like making overviews of calls in a certain time-period, and making sure contracts are set-up. Stuff that most developers could not be bothered with, but I enjoy it.
So for me doing PM work is actually more of a horizontal promotion, doing some different work because I like it, while I am definitely not "in charge" of any people now.
I guess my point is that even picking up PM work can be a horizontal promotion.
At my previous work, the head of R&D was an awful manager that couldn't light a fire under foot-dragging devs or keep things from going off-track (and software was routinely released in beta years late). But he had an amazing talent to shield his devs from the godawful CEO and other pointless distractions. This is a much unseen function of managers - shielding you from paperwork and interruptions that really aren't directly related to your job.
How much time can you spare learning exactly what each of those other people are doing and how it might affect your work? For that matter, how much time can those other people spare to explain yet again exactly what they're doing, in enough detail for you to realize how it affects your work? As I see it, much of management's job is to protect me from investing most of my time in conversations which didn't need to happen because they won't pay off.
Managers can be useful to say "no" to business. Otherwise you have business asking for a new feature every other day. Even if the engineer says no, it's still an unnecessary distraction and time killer to listen to everyone's proposals.
This is a good point to bring up. I agree in theory that managers are useful in gate-keeping roles. The trouble is that very few managers actually possess the power to be gate-keepers. Investors, clients threatening to leave and other fast-paced blame-culture mentality all but strips away their usefulness. In my experience, this at times makes managers feel worthless, expire, or worse - erratic.
My take is, manager positions are ripe for buck passing (to and from), collateral pressure for performance and abuse. Maybe some people can deal with that type of nonsense but the number of those who can't certainly outweigh them.
I can see how a manager might feel by this message. My thoughts are: If you're providing a great service to your underlings and your clients than you're in no position of regret. Contrarily, if you feel sick to your stomach when you go to work everyday and you're proud of that to a point of defense or fear, maybe it's time to reevaluate.
There seems to be a rift here between what people are good at/what they want to do now and what they want to do later. I consider myself a good programmer, but it's not where I want to be forever. I have always wanted to branch out and learn multiple facets (management, service, sales, etc.) and this seems like it would be limiting in that regard. I guess I just wouldn't be the target of 37signals?
Without wanting to sound snide, do you look for people who want to stay in the same role forever? It surprises me that people's ambitions to branch out and take on more responsibility haven't caused this to come up before. A salary bump, more benefits, and more vacation time wouldn't help me placate my desire to learn about other skill sets.
People branch out all the time. Part of being flat is that there's very little division. If you are a programmer who has a good idea for a new workflow process (i.e. management design), you propose it, and we usually try it. If you're a designer who want to learn more programming, we encourage it.
You can easily have a big impact on all the other domains of the business even if you're just a programmer.
Hell, we just had Craig Davey switch from being a programmer to being a designer recently!
The only way to solve management issues with a high degreee of confidence is to stay small enough to avoid management. The NASA analogies are problematic, however, because large organizations do indeed manage to manage themselves while completing critical projects. Which is more interesting? Large-scale management, or head-in-the-sand? I could personally never work in a large-scale organization, but how can we all avoid these issues and still create a highly functioning economy, which produces both critical and lifestyle goods and services?
37signals can do this because of their hiring practices. They need to be extremely picky with the type of employee they hire. Their hires need to be able to function within their unconventional structure.
This type of information doesn't translate well to most other companies. I hope 37signals' audience gets that. For software startups, many of their ideas are exceptional and it's fantastic to see real-world examples. For already-established companies and companies that can't be as picky as 37s, testing this type of structure seems unnecessarily risky. I believe 37s has addressed this in the past, and Jason has in his Inc. writings. I just hope people are paying attention.
This really resonated for me because we have almost exactly the same company dynamics at play (we're of roughly the same size).
I'm not sure we have similar answers, but one response to the problem of not being able to afford people who don't do real work is to make sure everyone is doing real work. We're primarily a services firm, and everybody in that org, including Dave, our President, is billable. It's something I tell people in interviews, and that I'm sort of proud to be able to say; everyone's grounded in the actual work that our actual people are actually doing for actual clients.
In that spirit, one way to address this problem might be to have team leads instead of managers.
I feel like Joel wrote about this a few years ago too, and while I'm probably wrong about this, off the top of my head it feels like their answer to this is that when they have too many senior people, they think about new products. Isn't the highest level on their comp ladder (not a fan of that thing) reserved for people who can run products?
Would love to hear more about what people in the 20-40 employee bracket are doing here.
20-40 employee bracket here! All of our employees are billable (sort of). It's hard to explain our structure but needless to say our CEO/COO/Operations Director/Consulting Director/CFO all work as a team and are never really limited to their "designated" positions. Our Operations Director has been billing on a project for 4 years.
Our company has an interesting dynamic. I would say everyone has the ability to "speak up" but we have designated management roles. I speculate there are some reasons for this:
1. Leadership - "junior" people need a certain level of mentorship. Many of them don't understand process and need managers to guide them on those processes. Hiring the quality of people (even at "the bottom") that your firms may attract is VERY difficult for the other 99% of companies like us out there. We simply don't have the whole techie seen watching our firm day to day and thus don't attract them to our company. Hiring SUCKS. Is that our issue? Sure. But this utopian business world isn't always possible -- even though we want it to be.
2. External client view - Our company works almost exclusively with blue chip companies. They expect to see CV's with years of experience and fancy titles like "Principal Consultant", "Management Consultant", etc. etc. With these titles comes the responsibilities of managing people. When I used to work for the largest biz software vendor in the world I remember there was a title "Engagement Architect". I was basically told that this position only existed because the client contact (mainly the CIO) needed a contact at our company that was on his same "level". Also, some people flat out do not have soft skills.
I think the overall point is this... this is not a lesson in how to run a better business. This is a lesson in how Jason is happiest in running his small business and wants to keep it a small business. Many of us love the agility of being in a small company and fear if we add more numbers we will lose that agility. (and that's probably true) 37signals has only increased it's employee base to 26 over 11 years. With the amount of press they have drawn there is no reason why this number shouldn't be 260. For the record, I'm not saying that it should be 260, I'm saying that they have probably favored higher profit margins on their existing employee base rather than to scale the business out vertically.
Fred Wilson once wrote "Marketing is for companies who have sucky products." In order to do this with 26 people, you need to find 26 very good people. Do you know extremely difficult that is to do? It's even difficult with just 2! Face it, most people SUCK at business. I applaud Jason (and others) who have had the fortune and ability to do such a thing.
I like that he mentioned in 2 places how he/they supported people in the best way for those people even when it was clear they weren't going to work for 37signals anymore. (In one case they helped someone find another job, in another they helped someone start her own thing.)
It's important to set other people up for success, whether it's success at your firm or at someone else's. They're not "human resources", they're people!
In many companies the managerial titles are invented incentives, not necessarily they "manage" people. They exist as part of the incentive package, and certain companies attract certain personalities who would be happy with titles. Management position gives one probably a different satisfaction, "doing better than the other guy", and assumed better pay above the managed is all that is needed. It's a kind of a distraction. It is not bad unless it kills nurturing leadership environment. The best case is that laders become chosen managers by their peers. The worst case is that those who can not manage become assigned leaders (managers) by "the management".
There's a saying in team sports along the lines of, "Players play the game; Coaches coach."
Employees play the game (ie do the work), but I think a good manager/leader can make a big difference.
Sure, Michael Jordan was a great basketball player who had good teammates, but Phil Jackson must be doing something right in order to extract the talent out of his players in just the right way to win year in and year out. And that is hard.
Perhaps there's just not very many good coaches or managers, which is why there's such distaste for "management."
But every good team, organization, or company has a great "manager" or "managers".
In the case of 37signals, it seems that person is Jason Fried (he is the CEO).
The 37Signal employees:
* Like their field and want to be 'hands-on'
* Don't mind staying in the same company for 10X years.
The supposed norm:
* Prefer to advance to other positions vertically
* Like moving between companies (for challenge/change).
Makes me wonder what is the difference between the two types of personalities and how those affect the organization.
For example, is there more or less innovation in 37Signals ? Are people more ready to step up and fix/report problems outside their immediate responsibilities ?
I don't think there's really a difference in employees. Everyone reacts to incentives, and it sounds like 37signals has removed titles with pay. Which honestly, I'd much prefer. In many ways titles are a substitute for flat pay.
I'd rather have a flat org (and no titles) with wildly different pay (and extreme bonuses, profit sharing, equity grants) -- rather than relatively flat pay and lots of titles (which tends to be the norm in industry).
What they removed is not just meaningless titles but rather all management positions.
I, for one, don't want to code my whole life. Something 37signals can't offer me.
But there are people who are content to code forever, and I wonder how they differ from people like me.
" I, for one, don't want to code my whole life. Something 37signals can't offer me."
I'd say it's just the opposite. The lack of organizational hierarchy and title means that people can work outside their normal expertise more easily. Nobody is stuck in a box.
Designers pick up programming skills as their interests allow. Programmers with UI ideas can try them out. Both contribute with writing, with workflow ideas, and on customer support. We've even had people completely shift roles from programming to design.
That idea about rotating leadership within the customer service team is brilliant! I wonder if changing it every week is too frequent though - what about doing it biweekly?
"The fairest rules are those to which everyone would agree if they did not know how much power they would have."
This quote really, deeply bothered me. One of the major differences between alpha males and the rest of the population is that they will always assume they'll end up in the top spot. Your prototypical alpha male won't even consider the odds of being on the bottom in that lottery.
To push it further, those same aggressive types will have the passion and voice to draw support for their views, no matter the substance. A "flat" structure overvalues the opinions of the loud and aggressive, with little room for more pensive contributors, especially women.
In other words, if you leave the authorship of the social contract to the loudest people, you may end up with a rather oppressive outcome. This is a universal rule, often overlooked by the alpha males who spend their time talking to Inc. Magazine.
You aren't making a very clear point. Are you saying that : "Alpha males will always assume they'll end up in the top spot, so when they choose rules for a situation regarding two competing agents, their choices will favor the agent in with the most authority"?
If so, then you are assuming a context in which the agents of the situation can change the roles in which they are assigned permanently. That is not the case in this context, because the agents (Jason Fried's support team) are rotated between management and worker, and no one is getting promoted vertically.
//are rotated between management and worker, and no one is getting promoted vertically.
While that's true, i think his original point was that the alpha males will choose decisions that favour themselves....Introspective motivational awareness is hardly a profitable trait in our current society* (*-whatever i have seen is constrained to indian IT)
I was one of those experiments, as the Operations Manager, and I like to think it went pretty well. As many people here have rightly pointed out, though, being hands-on is the key. I continued to do a lot of the day-to-day technical work.
The main difference between what I did, and what the rest of my team did, was that I had the added responsibility for dealing with partners and vendors, negotiating contracts, scheduling hardware installations, and the like. The rest of the team was able to remain completely focused on the system administration issues that we cared about while I split my time.
For our team, it made good sense. For the other development/design teams, the way they're run makes sense. It all depends on context.
It's unrealistic to not promote people. If you run a "flat" organization, you're telling your employees "I don't care that your resume indicates no progression." That's a real career limiter, and it can be perceived as an underhanded way to retain talent.
Also, more pragmatically, how realistic is it to have 30 direct reports?
I would probably have no problem putting "My salary kept getting raised because I kicked butt" on my resume. If they can get past the fact that I worked at a porn company, a little grandstanding probably won't hurt.
I'm kind of surprised at how most of my former co-workers will not put the common name of the company (which is not offensive or profane) on their resumes and put the legal name instead (the legal name is pretty generic-sounding). Some have even requested that I change the name on my LinkedIn profile or mark it as "I worked with so-and-so at different companies" so they won't be directly associated with it.
Maybe it's just a scarcity mentality thing; they're worried about turning off potential employers, but when you're constantly getting contacted by recruiters I guess it's hard to feel like it's a disadvantage.
Is "unrealistic" a version of "that wouldn't work in the real world"? Of course it's realistic. Jason is describing how things actually work at 37signals, not how he'd wish them to be. So we have an entire staff of programmers, many who has been with us for years and years, who started out as "senior programmer" and has stayed with that title. The progression has been measured in salary.
I would think working for 37 signals alone would be a big enough evidence of how awesome you are. Also the kind of company that is looking at your "progression" probably isn't the place to go.
Maybe for a designer. What about the accounting clerks, administrative assistants, CSRs, etc. that any company of size needs?
It's "unrealistic" because there are social realities that exist outside of the valley and tech blogs. It's true that it's a good company, and it's true that it's a darling company here, but there will be sectors that haven't heard of these kinds of places.
And, again, once you hit something of size, some delineation
is a necessity. You don't have to model the Marine Corps, but when you have 30 people arguing over something, the buck has to stop somewhere.
Unrealistic implies that it's not going to actually take place. It is taking place. We've been running like this for years. We've had very little turn-over and remain good friends with people who left. So it seems to be working out excellently for people presently and formerly employed by 37signals.
The buck always stops somewhere. Whether you're two people or three people. At 37signals, the buck stops with Jason and me. Now it happens to be that when you employ smart craftsmen and women who care about what they do, there's very few loose bucks to stop.
I disagree that this would appear a "career limiter" to smart people. Most people in tech work for the same company for only a few years, so it's challenging to make any significant career advancement within an organization.
But give them an opportunity to serve as team lead on a successful project or several, and you've got plenty of resume mojo to spread around to everyone.
Maybe your title won't reflect your progression, but if you list responsibilities and things learned on your resumé then that would be a clear indicator of progression.
Whoa... cultural whiplash. I get that there might be places where this kind of thing is a concern. Really, I do. But I can't imagine applying to work at a company where they'd look at the line on my resume that says "3 years at 37signals" and worry that I hadn't been promoted in all that time.
The thing I've always liked about Jason's writing and approach to business is that he isn't afraid to say that they might not have the exact right answer. At the same time, they refuse to accept the "conventional wisdom" as being the correct answer; I think too often we believe that because most companies do things a certain way, that all companies should be run that way.
The takeaway for me is that you should be constantly questioning whether there is a different way to run things that enhances the performance of your organization as a whole. I have personally been privy to how the people with the most impressive titles frequently have the least connection to what's going on in the business. Some of the methods taken at 37Signals seem to be aimed at fixing this problem, which I think is commendable.
At the same time, it seems a shame to have to let go of a good employee because they want to take on more responsibility. If their view on more responsibility is simply a bigger title, then perhaps they weren't the right fit for 37Signals. However, in my opinion, ambition and competence should be rewarded, so it seems like there may have been a better way to handle the situation than choosing between staying in the same role and leaving the organization.
You're right - we don't have the exact right answer. We're always trying to find the right answer for the right time. We may have a different opinion in 3 years or if we have 35 people. Who knows, but we're open to figuring it out once we get there.
In the end we want to build a company that allows people to do the best work of their lives.
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[ 3.0 ms ] story [ 396 ms ] threadI'm on a small team within a larger organization that we support (in dev and tool usage). A challenge for us is that people in the larger org are used to having a manager to route their requests to.
I may give a rotational approach a whirl. But right now, one of my primary roles is as s&!t umbrella and I don't want to overly burden my real producers.
(Also, the committee only has to ratify the officer's decision with a simple majority in the case of purely internal affairs.)
http://www.sacred-texts.com/neu/mphg/mphg.htm
http://arxiv.org/abs/0907.0455
The point is that it's possible to run a company where managers don't have a purpose and aren't necessary.
http://en.wikipedia.org/wiki/Mondragon_Corporation
This study from around 2002/2003 puts their revenues at $8 billion annually with 60,000 employees. That puts their per-employee revenues at around $133k.
http://www.stthomas.edu/cathstudies/cst/conferences/bilbao/p...
This puts their revenues at $24.2 billion in 2008, which is almost $300k per employee, if you use the ~85,000 employees figure.
http://willblogforfood.typepad.com/will_blog_for_food/2011/0...
Looking more closely, they're a strange sort of conglomerate. At a glance, I see two banks, two insurance companies, roughly two hundred industrial companies, a dozen retail shops, a dozen food-related businesses, a dozen research firms, and ten education companies.
In a way, it reminds me of Idealab, in that each new company is a new pool of equity (with the associated incentives that result from ownership), and that failures are not punished, but rather result in retraining or placement in a different firm. (for full co-op members).
It's also interesting to see that the founder was a priest who started off with a co-operative polytechnic school and bootstrapped everything from that base.
So those figures would indicate 174,000 Euros per employee, which makes a lot more sense.
if your environment has a significant amount of elements that engineers (or generally - employees) wouldn't want to be in charge for, then you are already deep into the problem and the shortest solution here is to assign managers to be in charge of those things.
The key is to not allow the situation to degrade into creating "demand" for managers. For example, once you create one manager for a group, s/he would want to talk to somebody, preferably managers, from other groups. That burden on the other groups would naturally trigger response - creating managers in the other groups. That starts to structure the information and decision flow the way that rank-and-file employees lose much of the visibility into the product and business and thus lose the ability (and motivation) to take even small decisions, thus requiring even more management ...
And while they may not have anyone with the job title CTO, I'd be very surprised if DHH was anything other than the de facto CTO.
http://en.wikipedia.org/wiki/Ricardo_Semler
Their industrial democracy approach has scaled quite well, with 3000 employees.
http://en.wikipedia.org/wiki/Worker_cooperative
I think the biggest reason most companies don't recreate Semco's example is that nobody wants to think of themselves as expendable, especially people who can decide whether they're expendable or not, as the top management positions of a company are in a position to do so.
By saying "yes, our employees can make these decisions without us, we just have to give them the structure and support to do so", people at the top are admitting that they're not as important as our society tells them they are.
In Semco's case, Ricardo Semler was happy to admit that, because he felt the stress of running the business was killing him, and he welcomed the idea. A lot of people in his position would take anti-anxiety medication and something for acid reflux, and keep going, convinced that their position holding the reins is indispensable.
However, if you want your company to grow into a Groupon or Zynga, and you have the rapidly expanding demand to support that, then you need to scale. I don't think Groupon could run on 26 people, so they needed to scale to get to such massive revenue figures.
I specifically didn't use Facebook as an example because I know your feelings about them. I figured Groupon at least has the revenue to support their valuation :)
You can't "want" your company into becoming a Groupon or a Zynga by design a certain organizational structure. Startups try that all the time by preemptively hiring tons of people to sit around and wait for the hockey stick growth that never comes.
Well let me ask you this. When is it the right time to reorganize and evolve from the flat structure because you are growing like gang-busters and can't keep up with the pressure on all areas of the company (support, development, sales, etc.)
I think if I already had a business of 10-15 people this would be a good model to attempt to follow. If I had a business of 40+, I would be far more wary; the question of scale is for those who may try to fit the model to their existing business.
The assumption when you publish an article is that you're doing it to provide examples to others, not just talk about how good you are. In that situation, I think it's fair to point out the limitations and areas where this strategy might not work.
http://en.wikipedia.org/wiki/Dunbar%27s_number
Although, as many others have pointed out, there are some great examples of huge companies running similar strategies to good effect (Semco etc).
As the organization grows, i can't see a totally flat structure working - you're going to end up with people who have been there 5 years, wake up one day and realize they have the same role and similar salary to what they had where they started, realize they have no career path with their current employer, and will move on.
1. The people who are worth the most to us are the people who do the best work. We pay accordingly. "Management-like" salaries go to the best workers.
2. You assume people want different roles. Some people do, but we work hard to hire people who love their craft and want to keep crafting. A programming being pushed away from programming, just because they've been at the company for five years, is not the desired path for most programmers who really love programming. Same goes for designing, etc.
Speaking of titles: We tend to avoid those too. We've had a good bit of debate inside the company about this, but we're sticking to staying as title-less as possible. I don't think they're worth it in the long term. They set up boundaries between people that I don't believe are necessary. Might that change if we had 100+ people? It could, but I'm concerned with the now instead of the imagined future.
Having managers when there are 10 people are at your company makes no sense. The hierarchy starts out flat, you add a few more people and you're at 20, and the idea of making someone a manager seems like a waste and something a 'BigCo' would do. "We need people who get stuff done, not people who sit around doing nothing but managing", you think. Then you get to 50 people and everything breaks down. You wonder why people are frustrated they can't get things done, while other people are doing things that embarrass your company or compete with other things you are doing. And you realize your company isn't a special little gem that is wholly unlike every other company in existence. You need management.
Just make sure you give the devs a professional ladder and compensation structure that doesn't involve moving to management, because managing isn't something everyone is good at or even wants to do. And make sure that management knows their job is a support role to the people at the company who are making things happen, not the other way around.
Note, there's nothing malicious that happens here. No one is trying to promote a bad developer. People are largely doing what they think makes sense -- promoting top performers.
"[C]ompanies tend to systematically promote their least-competent employees to management [...] in order to limit the amount of damage they are capable of doing."
Absolutely. I'm simply sharing our experiences with how we run things - that's what my Inc. articles are about. I wouldn't expect anyone else to do what we do because we do it. Find your own comfort zone. There are plenty of ways to do plenty of things.
http://www.amazon.com/Seven-Day-Weekend-Changing-Work-Works/...
We have experienced the exact difficulties you have described, and have been slowly adjusting to create just enough structure to organize and motivate people. I would add that an additional area that becomes more important as a company grows is communication. Once the company gets past the size where the CEO/Director is getting around and talking with each employee on a weekly basis, and physical walls start to grow between teams, communication becomes much more difficult in both a vertical and horizontal sense (a side effect of added hierarchical structure i suppose?).
I think this is very naive of him, and a little selfish. He's enjoying the title of "President" which, to me, is a purely managerial position. I doubt if he considers himself useless, but he's happy to label other managers useless. I might be wrong, but it seems that he's either too selfish to see other people take away some of his control or he's afraid to tackle the problem of a growing company. Both of these will have negative consequences in the future.
Just for the record, over my 14+ years in a technical field, I have been a manager for 5+, and have given up that title twice before to focus on more technical work.
Re: design. Yes, I design. It's the primary thing I do. Design, sketch, work on product simplification, design/think about user experience, etc. DHH still codes as well (he's working on some nice enhancements to Highrise right now, in fact). Both David and I would prefer to design and code all day, but it's not always possible. Lately it's been more possible so we've bee doing it more often.
I apologize if I got things wrong. I was just going with whatever is here: http://37signals.com/about
"Jason Fried is the co-founder and President of 37signals."
and
"Jason co-wrote all of 37signals books, and is invited to speak around the world on entrepreneurship, design, management, and software."
with that kind of workload, I assumed you wouldn't have enough time for anything else. I never said whatever you do is useless. Far from it. Non-technical work that is focused at growing a company is more important than any technical work. After all, what can you do with an insanely great product that you can't sell because you didn't prepare for it properly?
Re: speaking. Not speaking anymore. Really enjoying getting back to product design.
I doubt that what he does in that position is purely managerial. I think you may have a hard time seeing why they value what they do if you impose your own viewpoints on them.
In my opinion, it will be impossible to have 200 employees with a flat structure.
I think the misconception with the article is that the title (and focus) is "Why I run a Flat Company" as if this should be the standard for modern business. This works for 37signals, because (1) you have actively chosen to grow very slowly when you could have otherwise grown much faster and (2) you've had the fortune and ability to attract some very good people. Many businesses don't desire to do number 1 and find it very hard to do number 2.
37 signals is amazing at marketing. Their blogs. Their books. Video Lectures. Mission statements. Guest posts.
From how the error messages are written, to customer service, to copywriting in our emails, to the cancellation process, to clarity of message, to how every single thing in each product works, it's all marketing. Marketing is everyone's responsibility. It's the sum total of everything we do.
..
"We've experimented with promoting a few people to manager-level roles."
So they are flat, with no chief anything, but they have 'manager-level roles'? Am I missing something or is there a contradiction in his description?
Edit: Got it, 'experimented' meaning that they tried, didn't work, and they went back to flat. Thanks for the responses.
Besides that I find that even with no job titles or formal roles, people within a company tend to self-organize and take on de facto roles. The only difference is that it isn't formalized, and people who end up managing aren't being paid manager salaries or getting manager options.
Past tense, too.
Despite the cocktail title, there still isn't a clear "path of authority" or anything like that. The buck stops at the partners, and the rest of us function like a meritocracy. The ones with a track record or expertise on a given topic have a respected voice, and there is always opportunity for expertise to shift or widen over time. It's that fuzzy-edged quality to the role that makes it feel experimental for me.
Re: manager's options... We don't offer options so that's not an issue.
In my experience, managers in most departments have essentially taken the role of sheep-herders. So, I started to ask myself: why do I need a manager when I work well on my own, making smart, educated decisions that are based upon the ideals and successes of other smart, educated and passionate people?
After all, I'm being hired for my prowess, no? If I am, do I need a manager? And shouldn't you always hire people who have these sensibilities?
I think the message I find within this rubble of contemporary and progressive ideologies is: Hire smart. If you have a good team who understand their roles and how it pertains to the goals of the company, you don't need managers - not for a small or mid-sized company, anyway. Basecamp has been the best PM I've ever worked with - alive or binary. Software has already begun to facilitate the role perfectly for me.
My responsibility is mainly to be a shit umbrella, so my creative and developers can do work, especially when we're all working on multiple clients. I'm not doing my job when I have to have them in meetings, in fact we don't meet save for face-to-face discussions.
That and of course dealing with the rowdiness of clients, hammering out scope, keeping things to scope, and being the bad guy when necessary with the client. (This is actually harder then people realize, our default human reaction is to help people, and it requires taking abuse in the extremes that is simply part of your job)
This article sums up my views nicely: http://weblog.muledesign.com/2010/10/project_managers_not_ca...
Oftentimes PMs (or better, their organization culture + workflow) have thrown a wrench or 2 into production and caused cascading failures because they forgot a detail, or couldn't admit to fault. The culture is surely to blame amidst most of these catastrophes.
The fact that you can admit that your PM skills need work already makes you a frontrunner for being a much better PM than most.
So for me doing PM work is actually more of a horizontal promotion, doing some different work because I like it, while I am definitely not "in charge" of any people now.
I guess my point is that even picking up PM work can be a horizontal promotion.
My take is, manager positions are ripe for buck passing (to and from), collateral pressure for performance and abuse. Maybe some people can deal with that type of nonsense but the number of those who can't certainly outweigh them.
I can see how a manager might feel by this message. My thoughts are: If you're providing a great service to your underlings and your clients than you're in no position of regret. Contrarily, if you feel sick to your stomach when you go to work everyday and you're proud of that to a point of defense or fear, maybe it's time to reevaluate.
Without wanting to sound snide, do you look for people who want to stay in the same role forever? It surprises me that people's ambitions to branch out and take on more responsibility haven't caused this to come up before. A salary bump, more benefits, and more vacation time wouldn't help me placate my desire to learn about other skill sets.
You can easily have a big impact on all the other domains of the business even if you're just a programmer.
Hell, we just had Craig Davey switch from being a programmer to being a designer recently!
http://5by5.tv/dailyedition/25
This type of information doesn't translate well to most other companies. I hope 37signals' audience gets that. For software startups, many of their ideas are exceptional and it's fantastic to see real-world examples. For already-established companies and companies that can't be as picky as 37s, testing this type of structure seems unnecessarily risky. I believe 37s has addressed this in the past, and Jason has in his Inc. writings. I just hope people are paying attention.
I'm not sure we have similar answers, but one response to the problem of not being able to afford people who don't do real work is to make sure everyone is doing real work. We're primarily a services firm, and everybody in that org, including Dave, our President, is billable. It's something I tell people in interviews, and that I'm sort of proud to be able to say; everyone's grounded in the actual work that our actual people are actually doing for actual clients.
In that spirit, one way to address this problem might be to have team leads instead of managers.
I feel like Joel wrote about this a few years ago too, and while I'm probably wrong about this, off the top of my head it feels like their answer to this is that when they have too many senior people, they think about new products. Isn't the highest level on their comp ladder (not a fan of that thing) reserved for people who can run products?
Would love to hear more about what people in the 20-40 employee bracket are doing here.
Our company has an interesting dynamic. I would say everyone has the ability to "speak up" but we have designated management roles. I speculate there are some reasons for this:
1. Leadership - "junior" people need a certain level of mentorship. Many of them don't understand process and need managers to guide them on those processes. Hiring the quality of people (even at "the bottom") that your firms may attract is VERY difficult for the other 99% of companies like us out there. We simply don't have the whole techie seen watching our firm day to day and thus don't attract them to our company. Hiring SUCKS. Is that our issue? Sure. But this utopian business world isn't always possible -- even though we want it to be.
2. External client view - Our company works almost exclusively with blue chip companies. They expect to see CV's with years of experience and fancy titles like "Principal Consultant", "Management Consultant", etc. etc. With these titles comes the responsibilities of managing people. When I used to work for the largest biz software vendor in the world I remember there was a title "Engagement Architect". I was basically told that this position only existed because the client contact (mainly the CIO) needed a contact at our company that was on his same "level". Also, some people flat out do not have soft skills.
I think the overall point is this... this is not a lesson in how to run a better business. This is a lesson in how Jason is happiest in running his small business and wants to keep it a small business. Many of us love the agility of being in a small company and fear if we add more numbers we will lose that agility. (and that's probably true) 37signals has only increased it's employee base to 26 over 11 years. With the amount of press they have drawn there is no reason why this number shouldn't be 260. For the record, I'm not saying that it should be 260, I'm saying that they have probably favored higher profit margins on their existing employee base rather than to scale the business out vertically.
Fred Wilson once wrote "Marketing is for companies who have sucky products." In order to do this with 26 people, you need to find 26 very good people. Do you know extremely difficult that is to do? It's even difficult with just 2! Face it, most people SUCK at business. I applaud Jason (and others) who have had the fortune and ability to do such a thing.
"real work" != "billable work"
"Everyone does billable work" seems great from the $ POV. That doesn't mean that people who are never billable aren't critical too.
...and was inspired by this Fast Company Article about some GE division that had no middle management... http://www.fastcompany.com/magazine/28/ge.html?page=0%2C0
It's important to set other people up for success, whether it's success at your firm or at someone else's. They're not "human resources", they're people!
Employees play the game (ie do the work), but I think a good manager/leader can make a big difference.
Sure, Michael Jordan was a great basketball player who had good teammates, but Phil Jackson must be doing something right in order to extract the talent out of his players in just the right way to win year in and year out. And that is hard.
Perhaps there's just not very many good coaches or managers, which is why there's such distaste for "management."
But every good team, organization, or company has a great "manager" or "managers".
In the case of 37signals, it seems that person is Jason Fried (he is the CEO).
The 37Signal employees: * Like their field and want to be 'hands-on' * Don't mind staying in the same company for 10X years.
The supposed norm: * Prefer to advance to other positions vertically * Like moving between companies (for challenge/change).
Makes me wonder what is the difference between the two types of personalities and how those affect the organization.
For example, is there more or less innovation in 37Signals ? Are people more ready to step up and fix/report problems outside their immediate responsibilities ?
I'd rather have a flat org (and no titles) with wildly different pay (and extreme bonuses, profit sharing, equity grants) -- rather than relatively flat pay and lots of titles (which tends to be the norm in industry).
But there are people who are content to code forever, and I wonder how they differ from people like me.
I'd say it's just the opposite. The lack of organizational hierarchy and title means that people can work outside their normal expertise more easily. Nobody is stuck in a box.
Designers pick up programming skills as their interests allow. Programmers with UI ideas can try them out. Both contribute with writing, with workflow ideas, and on customer support. We've even had people completely shift roles from programming to design.
This quote really, deeply bothered me. One of the major differences between alpha males and the rest of the population is that they will always assume they'll end up in the top spot. Your prototypical alpha male won't even consider the odds of being on the bottom in that lottery.
To push it further, those same aggressive types will have the passion and voice to draw support for their views, no matter the substance. A "flat" structure overvalues the opinions of the loud and aggressive, with little room for more pensive contributors, especially women.
In other words, if you leave the authorship of the social contract to the loudest people, you may end up with a rather oppressive outcome. This is a universal rule, often overlooked by the alpha males who spend their time talking to Inc. Magazine.
If so, then you are assuming a context in which the agents of the situation can change the roles in which they are assigned permanently. That is not the case in this context, because the agents (Jason Fried's support team) are rotated between management and worker, and no one is getting promoted vertically.
"A "flat" structure overvalues the opinions of the loud and aggressive, with little room for more pensive contributors, especially women."
Coincidentally enough, Jason leads off the article with an anecdote about a talented woman leaving the company because of their flat structure.
While that's true, i think his original point was that the alpha males will choose decisions that favour themselves....Introspective motivational awareness is hardly a profitable trait in our current society* (*-whatever i have seen is constrained to indian IT)
The main difference between what I did, and what the rest of my team did, was that I had the added responsibility for dealing with partners and vendors, negotiating contracts, scheduling hardware installations, and the like. The rest of the team was able to remain completely focused on the system administration issues that we cared about while I split my time.
For our team, it made good sense. For the other development/design teams, the way they're run makes sense. It all depends on context.
Also, more pragmatically, how realistic is it to have 30 direct reports?
Employers that worry about this are rather silly. I'd hire a candidate even if he was starring in said porn productions.
Maybe it's just a scarcity mentality thing; they're worried about turning off potential employers, but when you're constantly getting contacted by recruiters I guess it's hard to feel like it's a disadvantage.
It's "unrealistic" because there are social realities that exist outside of the valley and tech blogs. It's true that it's a good company, and it's true that it's a darling company here, but there will be sectors that haven't heard of these kinds of places.
And, again, once you hit something of size, some delineation is a necessity. You don't have to model the Marine Corps, but when you have 30 people arguing over something, the buck has to stop somewhere.
The buck always stops somewhere. Whether you're two people or three people. At 37signals, the buck stops with Jason and me. Now it happens to be that when you employ smart craftsmen and women who care about what they do, there's very few loose bucks to stop.
But give them an opportunity to serve as team lead on a successful project or several, and you've got plenty of resume mojo to spread around to everyone.
The takeaway for me is that you should be constantly questioning whether there is a different way to run things that enhances the performance of your organization as a whole. I have personally been privy to how the people with the most impressive titles frequently have the least connection to what's going on in the business. Some of the methods taken at 37Signals seem to be aimed at fixing this problem, which I think is commendable.
At the same time, it seems a shame to have to let go of a good employee because they want to take on more responsibility. If their view on more responsibility is simply a bigger title, then perhaps they weren't the right fit for 37Signals. However, in my opinion, ambition and competence should be rewarded, so it seems like there may have been a better way to handle the situation than choosing between staying in the same role and leaving the organization.
You're right - we don't have the exact right answer. We're always trying to find the right answer for the right time. We may have a different opinion in 3 years or if we have 35 people. Who knows, but we're open to figuring it out once we get there.
In the end we want to build a company that allows people to do the best work of their lives.