Let me admit right off the bat that Matthew Shaer's article The Boss Stops Here in the June 24th issue of New York magazine has brought my already high level of agitation to a boiling point. So, if some of my comments appear to be hostile, don't be surprised – you've been warned.
The article takes up a subject unusual for a life/politics/culture publication - it ventures into the business discipline of organizational management; specifically, a post-modernist pseudo-innovative spectacle of a "non-hierarchical workplace." Fancy verbage and incorrectly-used business terminology aside, Shaer focuses on a few companies, whose owners, to put it simply, replaced management leadership with the collective's (as in all employees) show of hands.
At Menlo Innovations (one of the companies in focus, a software developer), for example, "there are no bosses … and no middle managers." Instead, "every morning, the entire staff circles up to discuss" the distribution of assignments." Valve Corporation (a video-game company) operates as a network of self-governing teams, with employees choosing at random which team to join and when to switch to a new one. In all the companies mentioned in the articles, the projects' progress reviews are the collective exercises as well. Obscenely, personal achievement means nothing, because it's the whole team that gets evaluated: the brilliant guy who comes up with incredible solutions at lightning speed gets no recognition and his mediocre team members, who spend weeks gnawing at their portions of work, get to share in his professional triumphs.
Now, get ready for it! At Menlo et al, hirings, promotions, layoffs, and firings are handled by a committee. At W.L. Gore & Associates, once a year all (!!!) "employees gather to rank their colleagues based on their contributions to the overall success of the company. Those rankings are used by a separate committee of associates to determine pay raises or cuts." The article omits the exploration of how such committees are elected and/or appointed.
As far as I am concerned, all of this is nothing if not yet more evidence of the incredible ignorance I bring up so frequently. Most people learn so little about World History, they are not capable of recognizing that there is nothing new about these "experiments." It has all been done before: In the Soviet Union and other countries of the former Eastern Bloc everything was decided by various committees, starting with the ones in every single place of work and residence through the different medium levels all the way up to the Central Committee of the Communist Party!
Moreover, all these team-work models have already been tested (and failed) in the Soviet Union. Such groups were given a very special name - they called them Brigades of Communist Labor. The main purpose of these constructs was to eradicate any form of individualism – intellectual, political, emotional, spiritual.
Throughout the article, the author kept making an unfortunately confused mistake by calling these unformed socialistic blobs of companies "flat structures." That just fucking hurt me! A flat organizational structure is a typical attribute of a small business. But instead of eliminating the leadership and reducing everyone to some equalizing average, it actually elevates each employee to the level of a multi-functional manager. Every person handles a multitude of tasks covering entire sectors of the value chain. Moreover, they do that with little supervision and only general guidelines from senior and executive management. This is how they achieve, what I call, "career growth in the same chair," raising themselves from one level of expertise to another. And I'm not talking about mom-and-pop candy shops here – this is how $50-$750 million companies are ran by 10-20 hard-working people.
I have been working in such environments my entire career. So, it was laughable to me that the article made a big deal about companies with employees setting up their own schedules. You must be kidding me! Who in a small, or even a mid-size company has got the time to set up their subordinates' schedules!
The author praises some Fortune 1000 companies for trying to fix their management problems through workplace decentralization. Look, I don't give a flying fuck whether a Fortune 1000, or any large company, recognizes that there is something wrong with it and takes a stab at fixing itself through decentralization and "flattening." It's not enough to make them more efficient, because, to paraphrase Woody Allen: You know what's wrong with them? Everything. Companies are not supposed to be that big – break them up into small entities and the flat structures will come naturally (see above).
While reading the article I couldn't help but notice that in these companies only functions related to daily operations, general administration, and HR management (much despised and largely ignored by many entrepreneurs) get "delegated" to the workforce masses. The labor is not actually involved in the decision-making responsible for the strategic development and the survival of the company: which commercial directions to pursue, which projects to undertake, which clients to accept, where to procure the financial resources, etc. It is so evident that Matthew Shaer had to acknowledge that "overseeing strategy, the long-term vision of Menlo as a whole, still falls" to the two owners, who "also serve as representatives of Menlo at scads of management and business conferences," both in the US and overseas. Nobody else gets to go.
What can I say? This is the precise recipe of building the absolute power used by the Soviet leaders (and still employed by their contemporary successors): You let the hoi polloi pretend that they are the "power," delegate to the "collective" the most unpleasant tasks of dealing with each other, but leave yourself with the rights for the real leadership, for the ultimate decisions. And guess what? In that top-of-the-Olympus realm, there is nobody who can challenge you, because you got rid of all qualified personnel aka managerial talents. In Russia, they first called them the enemies of the people and then "cleanse" them out, if you know what I mean.
I found it very emblematic that the owners of Menlo Innovations consider Thomas Edison a "patron saint" of the company and keep his bust in the middle of their open-style working space. That same Thomas Edison who hired a very talented engineer named Nicholai Tesla and stole all of Tesla's ideas, patenting them in his own name. That Thomas Edison who later staged public electrocutions of puppies and other small animals in his attempt to discredit the viable Westinghouse/Tesla high-voltage system, in order to eliminate the competition.
And "the lady doth protest too much": Menlo employees' readily provided self-convincing quotes insisting that their "self-management" meetings keep the morale high (What about that guy who donated his outstanding one-of-a-kind solution to his team?) and make them feel that they are working toward a common goal. Oy! Hurts again! I have always propagated that creating in employees the sense of being important, of being a part of the bigger picture is a key to the successful management of human assets. But it's not achieved through making everyone into an unrecognizable little screw in a homogeneous pile. It's done by raising the awareness of each and everyone's crucial value and singular necessity for the company's survival.
In reality, just as it happened in the Soviet Union, all these collective decisions and committees' resolutions, usually lead to dilettantism. These people may be great designers and coders, but what the fuck do they know about business administration and organizational development. In fact, most of the high tech pros I've ever worked with were incredibly disorganized individuals, intellectually far removed from any administrative skills.
Another false agenda the poor schmucks who work for these "organizational innovators" subconsciously force themselves to accept is what I would define as the "evolution of rewards pretense." Since pre-historic times to these sad days, only three main factors have been stimulating people to work hard: the adequate merit-based pay, the recognition of achievements through promotion (not just title-assignment, but the real elevation of responsibilities), and the self-realization aka pride in your own professionalism.
When there is no middle or senior management, the promotions are out as well. It's not like you are going to take over an Owner's position. Turns out (here comes the funny part) that material stimuli are "irrelevant" as well. There is a quote in the article from one of the developers at DreamHost, who explicitly says: "Twenty years ago, it was about higher pay. Now it's more about finding your work meaningful and interesting." Well now, is that why you are ogling Mark Zuckerberg's photos in Forbes and invest your 401k pennies into high-risk stocks? And don't deny it, because I know you do. But hell, of course money is "not important." What else are they going to say? The decent jobs are scarce and the candidates are a plenty. So many young people went into coding and computer engineering; they are literally a dime a dozen. Those who get employed consider themselves lucky, and if you tell them to drink that "teamwork" and "money's not important" Kool-Aid, they will.
But the aspects that make this whole collective/committees bullshit especially inconceivable to me have to do with the very core of the business management, i.e. the behavioral science, the human nature itself. Did these business owners somehow develop some sort of a new breed of people, the kind that's inherently free of the evolutionary pre-built competitive instincts? Or maybe they psychoprofile every single employee and keep only those who are uncommonly fair and just, or, more likely, idiotically indifferent?
Incredibly, like all fanatics, these commy-following bosses manage to fool not only their employees, but themselves as well. Let me remind my readers that the greatest incentive for all organizational restructurings is profitability. I have no doubt that the private owners of the businesses highlighted in the article are under the impression that by eliminating the key decision-makers they significantly increase their profits. Let's face it: even in the current market, high-quality execs still make relatively decent salaries. Unfortunately, these owners, marred by their own special brand of entrepreneurial ignorance, are unable to see the big picture: while their worker-bees spend unnecessary long hours on trying to inexpertly debate the organizational issues, they are not attending to their primary responsibilities, e.g. ACTUALLY WORKING!!! Talking about real losses!
The article's author describes one of these long meetings, which started at 11 am and went until 2 pm (!), "and by the midway mark, the proceedings were moving a little more slowly, with more exasperated sighs, or slight but conspicuous head shakes, and sometimes everyone seemed to be talking simultaneously, in one big warbly squawk." But don't worry. There is always the pressure-relieving tool introduced at Menlo a few years ago, "walkies" – ten-minute group walks around the block.
As my readers know, I am a small-business crusader, who believes that giant corporations structured around towering hierarchies of management are cancerous. At the same time, people of extremes and ideological fanatics (and don't be fooled: this is exactly what we are dealing with here) always terrify me, regardless of whether their views are "progressive" or "reactionary." Why does everything always have to be so categorical: either a pyramid of useless bosses, or no bosses at all? Why can't their be a middle ground: a handful of well-qualified key decision makers whose expertise allows them to make high-priority decisions quickly, without slowing the business down, while all functional decisions are left to the employees?
I'll tell you why: Because that's a "small business" model. Unfortunately, these "innovative" owners don't want to remain small and work hard to survive. Notice that most of them are high-tech. They want to grow big as fast as possible and sell themselves either to a larger competitor or a private equity firm, or (oh, the sweet dream!) make billions by going public. Meanwhile, just like the Soviet Commies before them, they pretend to be "just and fair" by "empowering" their "collectives," only to completely abandon and betray them in that bright future. I fucking hate this phony bullshit!
The Frustrated CFO 