How Medium is building a new kind of company with no managers

http://firstround.com/article/How-Medium-is-building-a-new-kind-of-company-with-no-managers

by peter123 • 13 years ago

155 90 13 years ago

jmduke• 13 years ago

I went into this article thinking it'd be a puff piece, but the details about holacracy are very well done and a lot of the insights are more or less actionable even if you're at a more traditionally-organized company.

Something that doesn't get talked about too much is how popular holocratic structures are in non-profits, either formally or informally.

nomade010• 13 years ago

In my experience, there are less non-profits formally working with Holacracy mostly because they can't afford hiring the consultants to help them adopt it. And it's not easy to adopt on your own - it goes against a lot of oft-entrenched habits. That said I know that many have tried, though I don't know how it's going because I'm not even indirectly involved.

Interestingly, the distinction between for- and non-profit is less relevant with Holacracy. The bottom line is effectively the (explicit, written-down) purpose of the organization. More on that here: http://holacracy.org/blog/for-profit-non-profit-for-purpose

coldcode• 13 years ago

Having been there before, once they get to 70 or so people it all starts to falls apart. Once the founders no longer personally know all the people then structure comes in. By 200 people if you have no structure you are out of business. Also once you have lots of legal issues or are required to follow standard accounting practices or other picky stuff like that this nice holocracy will crater.

mathattack8• 13 years ago

Dunbar's number. I frequently quote 150 people as the breaking point, though it's a little less precise, and depends on the strength of the leader and organization.

http://en.wikipedia.org/wiki/Dunbar's_number

mortenjorck• 13 years ago

I should think a Dunbar-compatible company size would be well under 150 – Dunbar's number suggests the total number of people an individual can relate to at any point, so unless most of the employees have no relationships outside the office, I'd start at under half that.

Incidentally, that would put the number around the 70 quoted in the grandparent comment.

dnautics5• 13 years ago

there are some pretty dramatic counterexamples to your claim.

Valve, of course is the most well-known, but Semco is a large brazilian company that runs this way, as is Morning Star, a tomato processing company in California.

notahacker2• 13 years ago

How dramatic are the counterexamples though?

A browse through Morning Star's website reveals job listings for defined roles. They're looking for (i) people with "a strong business background" and "an aspiration for senior leadership" to manage their finances, (ii) people who "likely have a meaningful formal education in related disciplines" to "coordinate", "train" and "identify proper operating procedures", and (iii) "hands on professionals" who need the "ability to read, write, and comprehend instructions" in addition to specific practical skills.

Sure, they might downplay rank and authority, but it doesn't sound like an organization without structure or de facto managerial roles.

mathattack8• 13 years ago

The Semco story is fascinating. I wish I knew some folks that worked there. The wiki (http://en.wikipedia.org/wiki/Ricardo_Semler) doesn't tell much but from what I remember of the book, they cut organizations free when they reach a certain size.

jasonwatkinspdx2• 13 years ago

You're assuming this is a consensus or self directed free for all style flat approach. It's not: http://holacracy.org/constitution.

There is structure, and there are explicit rules for how that structure is modified. There are rules that require decision making to be documented rather than held in your brain. Accountability is explicit. The entire system is designed to be scalable by a process that allows individual roles to transition to teams (or back) with as much nesting is required for the business at hand. On the whole the design is aggressive about making things explicit and systematized.

Whether it works or not I don't know, but it's clearly not the kind of free for all you're assuming.

nomade010• 13 years ago

All this insight from reading the constitution? I'm impressed

jeremymcanally• 13 years ago

GitHub does just fine in a non-hierarchical setup even with pesky accounting controls in place. :) We're going to top 200 very soon (as in within a few weeks), and while we've had to make minor adjustments here and there, by and large we're still the same structure that Tom, Chris, PJ, and Scott setup at the start.

ryancarson• 13 years ago

Gore Associates (creators of Gore-Tex) have been operating as a no-manager company for over 50 years. They do over $2B in revenue per year and have 8,500+ employees. http://www.theguardian.com/business/2008/nov/02/gore-tex-tex...

fingerprinter• 13 years ago

I always scratch my head when stuff like this comes up. Not that it isn't a good idea or it doesn't have its place, but more that people think "traditional management" is a thing itself.

For instance, if I could summarize my 15 years of people and exec management it might be this: empathy and seek first to understand, then be understood (can't remember where I read this one). If I had to tack on something after this is it "take the hill", meaning a very clear shared vision so if there is ever ambiguity, people know what the ultimate goal is so they can make the right judgement call when needed (taken from the military, I believe).

My issue with things like this article is that they use different terms for the same things. It seems there will always need to be someone setting direction, someone following up that people are doing the right thing and some key decision makers. What we call those people might be different and how you "organize" could look different on paper, but those roles kinda, sorta need to exist.

Now, the feel and philosophy of the whole company can be different, but I would say that is more about the culture and how people react to good and bad news.

So things like Valve and Medium try to say they are not "traditional companies". Well, no company ever is, really. It's like when every company under the sun says they "only hire A people". They don't. They say they do and they want to, but they don't. Otherwise no B or C people would ever make their way through these companies and we all know they do. Heck, there are C, D and F people leading venture funded companies in SF right now.

So, in closing to this rambling comment, terms don't matter. Systems of management aren't important. Focus on the people, the mission and understanding both and you'll be fine.

mathattack8• 13 years ago

"seek first to understand, then be understood (can't remember where I read this one)."

I heard it first from Covey's 7 habits....

Good comments overall. I like your point of "Traditional Management" not being some standalone entity. It isn't.

dnautics5• 13 years ago

I disagree. Systems of management are important. There are going to be some people who work well under a strongly hierarchical system, some people who work well under a flat system, and people who could hack it under either. Thing is, there is no reason to believe that the people you attract under any given culture/structure is completely independent of ability to provide a product or service.

For example, GE is a very hierarchical megacorporation, BUT it has found it expedient to make its aircraft parts manufacturing flat, because parts don't need to be turned out so quickly and individual workers can have multiple specializations.

ohnoesitsthensa• 13 years ago

Would you agree with 'which system of management you pick isn't that important'? I think point is that management system isn't necessaraly unneeded, but that it's less important for progress than the acts of having empathy for someone, and they you.

notahacker2• 13 years ago

The intriguing thing about the article for me is that it combines a pretty sophisticated description of an alternative management structure with a characterization of "traditional management" techniques which is just daft. There's nothing remotely novel or "flat" about a corporate culture where managers and their reports are happy to discuss their personal lives and socialize with each other; it's pretty standard in lots of very hierachical, old-fashioned corporations whose managers have an above-subnormal level of social skill.

And for that matter, asking employees to rank their "SCARF" priorities sounds like some new form of torture a pointy-haired middle-manager might devise to torment you with the unforeseen consequences of picking the "wrong" order ("in view of your desire for greater autonomy and ambivalence about 'certainty', you're now part time")

qznc• 13 years ago

Every team will always have different people. Some need more hierarchy, some need more autonomy. Some differ on SCARF. Some differ on Myers-Briggs personality type. Sometimes the differences are big. Usually they are small and not binary. The job of a manager is to create an environment, where all those different people can efficiently work together. This means every manager will to some extend create their own system in their sphere of influence.

Your GE example, fits my theory as well. ;)

jacques_chester5• 13 years ago

So things like Valve and Medium try to say they are not "traditional companies"

In Valve's case, it's true. They are so unstoppably profitable that the company can be run in just about any fashion at all. The profitability is now largely due to network effects.

Any system from totalitarian dictatorship through to hippie commune will work, so long as it doesn't decide to dry up the river of money.

Normal businesses have much tighter constraints, tougher competition and far less free cashflow to play with.

Drawing universal conclusions about populations from extreme outliers is generally considered to be a mistake.

jschulenklopper• 13 years ago

empathy and seek first to understand, then be understood (can't remember where I read this one)

Could be from Stephen Covey (habit nr. 5) as one other mentioned. It could also be in the Prayer of Francis of Assisi,

  [...]
  grant that I may not so much seek to be consoled, as to console;
  to be understood, as to understand;
  to be loved, as to love.
  For it is in giving that we receive.

or in How to Win Friends and Influence People from Dale Carnegie with principles like:

  Become genuinely interested in other people.
  Be a good listener. Encourage others to talk about themselves.
  Talk in terms of the other person's interest.
  Make the other person feel important – and do it sincerely.

mathattack8• 13 years ago

Much more detailed than I thought.

"To help with this, instead of a focus on employees, there’s a focus on roles. Each circle has a ‘Lead Link’ who determines what roles the circle needs and how they get assigned. In fact, one person can hold multiple roles if their bandwidth and expertise allows. Stirman is both the People Operations lead and Word Master (which comes with final say on punctuation and capitalization, among other word-based dilemmas)."

Isn't this another way of saying he's manager of People Operations and Words? Perhaps there is no more formal career ownership, but it still sounds like he's a manager, no?

nomade010• 13 years ago

Yes, it's exactly what it means. He's the "manager" of his roles, and within the authority granted to this roles, he can make autocratic decisions that others can't veto (not even the "Lead Link"). And it's true for every employee in every role: they have full authority to exercise their role's authority.

Of course you need a way to modify the roles' definitions; there is a governance process for that, at each team level, and any team member can propose modifying the roles, not only the "Lead Link" (contrary to what this quote mistakenly suggests). I hope this clarifies a bit.

skrebbel2• 13 years ago

I'm nitpicking on a small detail here, but

• Autonomy-oriented employees may need the ability to work from home, or simply slip on their head phones to tune everyone else out.

It's 2013. Are these really special perks to make a certain kind of person happy? Maybe I'm weird, but to me a company that doesn't allow me to tune out with headphones one or occasionally work elsewhere is like a company that tells me what to wear or tracks office presence hours. Do these, in our field, even exist anymore? (barring Yahoo)

For "Autonomy", I'd rather expect something like having a very large say over what an employee is working on and how she does it.

swanson• 13 years ago

Do these, in our field, even exist anymore? (barring Yahoo)

Company dress codes and time tracking? They are pretty common outside of the startup culture. "No shorts and a collared shirt, please track your billable hours".

skrebbel2• 13 years ago

Really? (I'm assuming you mean to include "in the US"). I'm starting to understand the appeal of Valley startups.

There is no software-heavy company that I know of in the Netherlands that does this.

Sure, it's common that companies ask you to keep track of how many hours you worked on which project, but clocking in and out of the office? I've never seen it.

qwerta• 13 years ago

This article is hilarious. I guess I should not take my headphones for granted :-)

lysol• 13 years ago

If you read between the lines it really isn't about a management style or structure, it's about treating human beings like fucking human beings.

ansdkfus13• 13 years ago

So glad that someone's bold enough to challenge the traditional management system and experiment with a new kind. Having worked at a mega-sized corporation, I definitely felt like there was a serious need to revamp/rethink the current command and control system. Most employees feel disconnected from the decisions made by the management and the managers have hard time earning the buy-ins from their employees. I actually entertained the thought about building a thriving company without central management, with every employee empowered to make their own decisions (also take the responsibilities for them as well). I asked that question to the founder of Hoovers.com at a guest lecture. His answer was, based on his experience, pretty strong no. Most successful companies of our current time are represented by strong leaders, take Apple with Steve Jobs. But Apple will not stay Apple after Steve Jobs. A great company cannot last after the strong leader/founder leaves the company. Can we create a sustainable success with great PEOPLE instead of a single leader? I think Holacracy seems to be a promising solution and I would like to see this system stands the test of time.

bsbechtel• 13 years ago

I'm curious to hear how well it scales, and also what the downsides are once they come out. A lack of praise for employees seems like a fairly minor issue.

It's been said Valve is somewhat like high school with their completely flat hierarchy, although this is never mentioned in the many articles praising their management structure (or lack thereof). I'm curious if this type of management system causes similar problems.

That being said, everyone is different and some people (and cultures - Germany, Switzerland) function in a hierarchy very well, while others don't. I think the article alludes a little to this with the comment about individuals who take initiative vs those who don't. IMHO, those individuals who take initiative on their own are drawn to entrepreneurship and small companies, whereas those who don't are drawn to large corporations where others can set goals for them and as they achieve those goals, they move up. As Medium grows, they're inevitably going to attract more of the latter type, and it will be harder to provide meaningful roles for the former type.

nomade010• 13 years ago

Based on what I read about Valve, it is not surprising that they have a lot of politics going on. That's the issue with flat structures - when authorities and accountabilities are unclear, you need make alliances (seen as "cliques" from the exterior) to get your projects moving forward.

On the contrary, Holacracy has processes that push for clarity. It distinguishes people and their roles, and provides forums (e.g., clear meeting processes) to address misalignments and conflicts between roles, in service of the company's purpose. It's well explained in this 3-min video http://youtu.be/9U_XDin5tjI

Disclosure; I work with HolacracyOne. Hope that clarifies the difference a bit

jeremyt• 13 years ago

Not really well explained. Nothing about the process is explained in the video.

The only thing the video does is spend three minutes saying "if you have a problem, solve it among yourselves rather than going to the boss".

readme• 13 years ago

These "managementless" companies will be "managementless" for about 5 minutes before power structures start to emerge naturally within the group.

nomade010• 13 years ago

If you want to hear more about Holacracy, there is a webinar this afternoon at 1:30 PST: http://holacracy.org/events/intro-to-holacracy-free-webinar-... - Disclaimer: I work with HolacracyOne, the company behind the model. I'd love to address several comments I see on this thread (and will later), but I'd recommend the webinar for anyone genuinely interested in a comprehensive understanding. It's hard to discuss a 'part' in any depth without understanding the whole.

weichi2• 13 years ago

What are the largest companies by revenue, profits, and employees that are using this model?

nomade010• 13 years ago

I'd say the largest at this time would be Agencies of Change, 200+ employees (though it was a few years ago, I don't know now). We're currently working with one significantly bigger client, but we let them announce it first.

overgryphon• 13 years ago

This sounds almost exactly like how traditional management is done at my job. Each "circle" has a lead "point" who distributes roles, but each person is able to make decisions about their particular part.

dylangs1030• 13 years ago

I hate this article. It's not bad in any factual way, so it's an opinion...but the hero worship is just intense.

That, and it just reminds me of the hustle startups do all the time. "We're rebuilding the internet." Come on...

Regarding the actual management content of the article: it seems too good to be true. From what I can understand of the article's explanation of "link leads" and "evolving roles" - it essentially reduces job description to a generalist, jack of all trades perspective.

That's not realistic. Once you pass that beatific startup culture point, you need structure. Structure isn't a bad thing. It's faulty managers who give it a bad rap, but from a group dynamics and sociological perspective, implementing structure in a company makes sense at scale and for maintaining/improving productivity.

Unfortunately, it's trendy to be anti-all-things-BigCo nowadays. "We need an idea for how to run our company!"..."Well, what's Microsoft doing?...Aha! We'll do NOT-THAT!"...

Personally, if it works it works, but I think I'd hate it, and I'm skeptical.

Hansi• 13 years ago

Yes, I gave up after the first three paragraphs, too much hero worship and hyperbole.

incision• 13 years ago

That, and it just reminds me of the hustle startups do all the time. "We're rebuilding the internet." Come on...

Merely "rebuilding the internet" actually sounds humble relative to "changing the world" as I've seen so often lately.

zhemao• 13 years ago

I don't know. Every action you take "changes the world" even in an incredibly insignificant way. That's a much lower bar than "rebuild the internet". You say that and I'm like "O rly? So does your new internet use IPv6?"

bowlofpetunias• 13 years ago

I hate all of these pretentious claims about new ways of working when they all do exactly the same thing:

1) Set up a straw man in the form of "traditional management", whilst there are hundreds of forms of management and managers, most of which don't "look at reports as resources", or even look at people as "reports". As a manager, I find this insulting.

2) These shiny new methods are the way many small companies have worked for fucking decades. They just weren't so fucking pretentious about it.

It's the same shit as with shiny new technology, frameworks and methods in our business: everyone thinks they've invented the wheel, and nobody bothers to look around them (and especially behind them) to see if the same thing hasn't been done countless times before.

Excuse the language, but this attitude is just pathetic. Nothing new is being invented here.

sciurus• 13 years ago

But if you're pretentious about it, you can sell certification and licensing.

http://holacracy.org/

nomade010• 13 years ago

I have to say I agree with your point 1) in general.

But not with 2). Holacracy is not just a set of vague principles that you swear to apply as best as you can, or some bolt-on process to add to your box. It's a completely different way of governing a company, a different power structure, and its rules are specific and spelled out: http://holacracy.org/constitution

Whether it works or not is another question, but at least it's different. Then, sure, it's not a silver bullet: http://youtu.be/gltN3NuY5dc

INTPenis• 13 years ago

I'm an anarchist at heart so I love these types of stories but I'm also very pragmatic. I work for a very large multi-national concern and I know that eventually you're going to get employees who are more concerned with things at home than their job.

For these people the job is just a meal ticket, something to feed their kids and put a roof over their heads. When the passion goes out of frame like that, what's left is apathy.

No "operating system" in the world has a cure for that.

Personally I know I would thrive in a management-free environment, if anything has been positive in my reviews it has been that I am self managing and do not need any guidance to find things to do. But people around me do their best to avoid hard work all day long. They have what we in Sweden call "tillsvidareanställning" and that means it's practically impossible to fire them.

Seems to me that Holacracy is great if you manage to find driven employees who care about your business. I'm not saying they should dedicate their lives to it but they should feel pride in what they do and a sense of responsibility for their company.

So far I've only seen this in small startups, and even then it wasn't prominent.

aryastark• 13 years ago

I do not even believe Valve is immune to this, despite the hoopla.

I've worked on games on my own. I know that there are a 1000 different parts of a game that you simply do not want to touch. The tedious bugs and polish, that every video game has to have. The endless hours of play testing.

Even working for myself, where I have total stake in the product, I have to force things.

Startups are a special breed of crazy. Initially they emulate a dorm-like environment, where you go and hang out with your friends and make "killer" this-or-that. But in the end, it's just a sham. The founders are there to make money. And in Silicon Valley terms, that means urgent breakneck growth. No startup culture survives the onboarding of an HR department and the associated growing pains.

VLM• 13 years ago

"For these people the job is just a meal ticket, something to feed their kids and put a roof over their heads. When the passion goes out of frame like that, what's left is apathy."

The implied assumptions, such as the above, are more than a little suspect, sending the resulting calculations based on them off the rails.

NoodleIncident• 13 years ago

I heard a great quote about this some time ago that I'll have to paraphrase. I'm not sure if it was about Valve, or from a Dilbert comic:

"Managers exist to protect the company from their poor hiring decisions."

dworin• 13 years ago

"He read all the ‘right’ books on management and took the advice to heart: don’t get too chummy, shield your team from anything they don’t need to know, ask them to identify roadblocks to progress, reward them all equally."

These are definitely NOT the right books on management. Every single one of those things is the exact opposite of what good managers do. That sounds like the advice from the world's most fear-ridden, counter-productive HR organization. Good managers care about their teams as people, communicate openly, and overwhelmingly reward their best.

The approach works great for small, nimble organizations, but it doesn't scale. For instance, I talked with a tech company a few weeks ago that's rounding 50 employees and is now a few years old, and the employees are all frustrated that they've never gotten performance reviews. Founders hate performance reviews, because they're against the DNA of most entrepreneurs. But a lot of the people who become developers, customer support reps, and marketers really like when someone gives them a clear idea of what they're doing well, what they need to work on, and a clear plan for how they can develop.

One of the challenging parts of management is that it's really hard, it's highly situational, and it's non-deterministic. Having really great processes helps, but at the end of the day you really just need to hire people who are good at managing and set the right priorities for them as an organization. Inventing weird systems like this sounds great, but in most cases it doesn't scale. For instance, a role-centric organization will work until you realize that you need 60 people involved to get a press release out because someone declared themselves the Word Master and needs to have a say in punctuation.

But outside the weird jargon, this isn't a new kind of company, it's just good management principles. Have clear accountability; be candid; care about your people; connect everyone to a broader vision. It sounds like common sense sometimes, but when you go to implement it in the tactical reality of the day to day, it's really hard.

godisdad• 13 years ago

Steam has been known to have a manager-less structure:

http://blogs.valvesoftware.com/abrash/valve-how-i-got-here-w...

outworlder• 13 years ago

That would be Valve, the company, not Steam, the product.

Also, mentioned countless times in this thread alone.

tucaz• 13 years ago

All this "no hierarchy" and "no management" movement seems really nice. What I want to see, Valve included, is how they keep it when there is no money.

So far Valve is doing pretty good and still sometimes there are some talk about silos and how it does not work for everyone.

I don't know much about Medium finances but I would love to see stories about these management strategies in companies that are actually trying to earn some money and don't have pockets full of cash just waiting to be spent.

kareemm• 13 years ago

Holacracy is an instance of organizational democracy, but it's not new - I took a holacracy seminar 6 years ago. Kudos to Medium for using the framework though - it's one of the few that lays out, soup to nuts, how to run a democratic company.

There are many companies that operate using democracy as an organizing principle - Semco is the great-granddaddy of them all (two books - Maverick[1] and the 7 Day Weekend[2] - were written by Semco's founder, Ricardo Semler, about how Semco operates).

Other well-known democratically-run companies include Zappos, WL Gore, DaVita (a $12B company), and Dreamhost.

If you're interested, take a look at WorldBlu[3] for more - they've been building a community of these kinds of companies, have tons of resources on their site, and even have a conference on organizational democracy.

[1] http://www.amazon.com/The-Seven-Day-Weekend-Changing-Works/d...

[2] http://www.amazon.com/books/dp/0446670553

[3] http://worldblu.com/

ChikkaChiChi• 13 years ago

How is a flat company more efficient than a company that doesn't hire shit managers?

Every article on the matter seems to be written by personalities that have an opinion that management hierarchies can NEVER innovate.

I've found the exact opposite to be true. Great leadership pushes everyone to be better. 2 strong personalities can lead to disaster if nobody is allowed to reign them in.

VladRussian2• 13 years ago

How is a flat company more efficient than a company that doesn't hire shit managers?

an any meaningful scale these 2 things are impossible.

yuhong2• 13 years ago

I think michaelochurch has advocated open allocation.

mratzloff• 13 years ago

Too often I see this piece of advice be overlooked or ignored, to the detriment of the entire department or organization:

“You want to make sure you hire only people you wouldn’t mind getting stuck in an airport with,” he says. “So many people fall into this trap of hiring highly skilled people who are bad culture fits. And I’d argue that’s the worst kind of hire – even worse than a poorly skilled person. If they’re as skilled as you think they are, they’ll gain power, influence and get more deeply enrooted in your technology, process and product. Then, when the honeymoon of your justifications is over and reality sets in, you’re seriously stuck with this person.”

JohnHaugeland• 13 years ago

In what sense is this new? No-management companies have been around for hundreds of years, and we talk about how Steam has been doing this for ten years on a fairly regular basis.

srik• 13 years ago

I recall an insightful comment here on Valve's flat management style -

When there is no official hierarchy, an unofficial one emerges.

blader• 13 years ago

I just want to know who the guy that can make the decision to fire you is at places like Github, Valve, and Medium. Either that person doesn't exist or that person is your manager.

enraged_camel2• 13 years ago

I heard that at Valve, it's by team consensus. I may be wrong though.

jacques_chester5• 13 years ago

Ah, so everyone's boss is the sociopath who's good at whispering campaigns. Swell.

lightyrs• 13 years ago

Based on my experiences with their product, I think some top-down direction is precisely what they could use. Just because so many managers and/or management paradigms are inept does not mean that we should throw the baby out with the bath water.

Aloisius• 13 years ago

I believe you could write an article with more bs in it. It would be difficult, but it would be possible.

This paints a strawman of the most dysfunctional traditional structure imaginable where no one knows who has what authority, no one knows what various managers do, individuals have no power, no one listens to the people "at the bottom" and managers are impersonal jerks whose job it is to keep their team in an isolation room.

Maybe Holacracy is the greatest system known to man. It looks like a surefire way to create ultra-political environments, endless meetings on topics unrelated to getting real work done (like restructuring the org and electing people) and eventually a centralized power base around a small political class.

But surely the narrative that Ev Williams didn't like managing, so he decided to get rid of all manager and dump the entire traditional structure because his last company was poorly managed isn't the best way to sell it.

duaneb• 13 years ago

Maybe if Medium spent their time distinguishing their product instead of their corporation I would know who they are. But I don't, and I'm not sure why they think I should, considering they are a blogging platform.

floor_• 13 years ago

Like Valve software you mean. Hope it doesn't turn out to be like a high school.

http://www.vg247.com/2013/07/08/ex-valve-employee-slams-comp...

bencollier49• 13 years ago

Yes. The interesting thing here is that without formal managers, you get informal managers, and the process for the selection of informal managers is likely to work in a similar way to the one in which people get popular at school.

How Medium is building a new kind of company with no managers

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