5 ms·

But if you were CEO and you wanted to, how would you engineer the incentives such that actually productive managers succeeded? Or is there something about corpo

But if you were CEO and you wanted to, how would you engineer the incentives such that actually productive managers succeeded? Or is there something about corporate structure that makes it impossible?

Consultant32452 4y ago
Step 1: Read every Dilbert comic Step 2: Realize that what you requested is impossible for sufficiently large organizations Step 3: Negotiate a golden parachute for yourself. Don't hate the player, hate the game
pc86 4y ago
I would think an easy way - and coincidentally, the best for business - would be to make it too dangerous to be the stereotypical office politics back-stabbing VP type. Make it known that that behavior will land you out on your ass, with no severance or parachute, and no recommendations for future employment. But, I've never seen that in practice. Maybe the politics of the C suite mean you want those office politics back-stabbing folks around to take those high level positions?
- Tyr42 4y ago
  I mean, then the backstabbers just need to frame someone for backstabbing and get their path cleared up. You also need a good way to tell apart the backstabbers from the good guys.
- dh2022 4y ago
  C-suite people from different companies end up working together on company boards later in their career. To fire with cause and no severance and no parachute some back-stabbing VPs would make it more difficult to work with said back-stabbing VP later on a company board.
adventured 4y ago
First, you have to hire exceptional people, if you can. If you can't get good enough people, you're going to fail hard inevitably no matter what you do (if you've got a quasi monopoly moat it may take a long rot to get there).
- asda_ 4y ago
  [dead]
version_five 4y ago
Give them a budget and agree on a set of accountabilities. The same model as buying a managed software consulting project.
- dan-robertson 4y ago
  Paying for consultants often isn’t a good use of money though, right? Like often the problem is that the right metrics are hard to know in advance and they are typically games in a way that makes it easy for the consultant to meet them without actually delivering what is desired. I think they also make it hard to take (calculated) risks which isn’t necessarily what you’d want.
ninjagoo 4y ago
There might be fundamental incompatibilities here because of orthogonal goals - if you're an ambitious person in a corporate hierarchy won't one (or maybe even primary) goal be to climb the ladder? And if you're a founder won't your goal be to 'grow the product or service'? Now one way to climb the ladder may be to grow the product or service, but in a larger org the ability to influence a product or service in a major way might be a bit limited, with decision-making at the business level being controlled by upper echelons. So the ladder-climbing process would select for different skills and temperament than founding/running a company. Essentially, in a corporate hierarchy, we're asking people with ladder-climbing skills to become business people as they reach the top, and not everyone can make that transition successfully. In fact, I'd go so far as to say that very few can actually make that transition successfully. Human brains learn through feedback [1]. To become a good business person, you need to run a business and get feedback just like a real founder/CEO, including business failures. Your question essentially becomes - how can a CEO structure incentives so that managers at all levels become good business people? It's a great question, to which there is no simple answer that I know of. Would appreciate any pointers to potential solutions. One way could be to treat each team at a certain level (say no more than 50 people) as a business of its own. It might not be the most efficient way for the corporation to deliver on its objectives, but it would likely create a lot of business-savvy managers. But now you have a pool of business-savvy folks that want to get paid like founders, and that might not be possible in a corporation. In terms of (in)efficiency, you could have duplicate teams that provide similar services, wasting resources, and adding costs to spin up new teams as existing ones fail or move on. Something like this might be more feasible at a societal level - a capitalistic structure that encourages the growth of smaller size businesses while inhibiting the growth of mid- to large corporates. Open source organizations actually seem to be the closest that I've seen that seem to operate this way. [1] https://www.youtube.com/watch?v=5eW6Eagr9XA https://www.youtube.com/watch?v=5eW6Eagr9XA
mooreds 4y ago
Hire people with the right kind of ambition, says Ben Horowitz: https://www.fastcompany.com/1685869/right-kind-ambition https://www.fastcompany.com/1685869/right-kind-ambition
deltree7 4y ago
I know HN hates him, but Elon Musk has figured this out and that's why he will always deliver outstanding returns compared to others.
- scarface74 4y ago
  His company hasn’t delivered outstanding returns as far as profits. Tesla’s stock is mostly hype.
  - chris11 4y ago
    Twitter is private, but Elon definitely destroyed value when he took it over.
    - icedchai 4y ago
      Well, he did overpay by at least 50%.
    - negamax 4y ago
      He also paid 4x the price. And took out his frustration and vindication on employees. Doesn't come across as someone with sound judgement or vision
- stuff4ben 4y ago
  How exactly has he figured this out? I see an egomaniac that drives his employees as if they're just cogs in a machine.
  - rippercushions 4y ago
    Per this thread, this seems preferable to letting managers spend all their time building empires. Also, if you're working for any large company, you are a cog in the machine.
  - dasil003 4y ago
    I think both you and the GP are missing the essence of what Elon is. He is neither an amazing operator and businessman, nor is he a slave driving demon. He does have a huge ego and need for attention, I'll give you that, but fundamentally he is someone who cares more about solving big problems than he does about money or people. The push to deify or villify him is all about satisfying ones own judgement, but personally I find those reductive opinions to be far less interesting than actually looking at the various things he's done and evaluating them on their own merits.
potatolicious 4y ago
A few thoughts having worked at a bunch of large companies before, with varying degrees of rewarding empire-building. - The orgs most susceptible to rampant empire-building are ones where execs seem disconnected from the product. IMO the best way to discourage rampant headcount growth is for upper-level execs to scrutinize hiring needs. Some orgs (especially pre-2022) have been apt to approve headcount growth without sufficient oversight as to what the new people are actually supposed to be doing, and whether or not they're necessary. Loose hiring policies result not only in corp bloat and high expenditures, but reward empire-builder managers more than product-oriented managers. - To double down on that point, part of the problem is that in too many companies execs and managers don't speak product. The point of hiring is ostensibly to ship more/different/better product, but when execs themselves do not speak product hiring becomes divorced from this underlying goal. You hire so your seniors have juniors to mentor. You hire so a manager can get promoted. You hire to "expand your scope". But at the end of the day there is only one valid reason to actually hire: so the company can produce more/different/better products that it otherwise cannot do without hiring. This is especially true at companies like Google and Meta where the PM track and Engineering tracks are fully decoupled.

Consultant32452 4y ago

Step 1: Read every Dilbert comic Step 2: Realize that what you requested is impossible for sufficiently large organizations Step 3: Negotiate a golden parachute for yourself. Don't hate the player, hate the game

pc86 4y ago

I would think an easy way - and coincidentally, the best for business - would be to make it too dangerous to be the stereotypical office politics back-stabbing VP type. Make it known that that behavior will land you out on your ass, with no severance or parachute, and no recommendations for future employment. But, I've never seen that in practice. Maybe the politics of the C suite mean you want those office politics back-stabbing folks around to take those high level positions?

Tyr42 4y ago
I mean, then the backstabbers just need to frame someone for backstabbing and get their path cleared up. You also need a good way to tell apart the backstabbers from the good guys.
dh2022 4y ago
C-suite people from different companies end up working together on company boards later in their career. To fire with cause and no severance and no parachute some back-stabbing VPs would make it more difficult to work with said back-stabbing VP later on a company board.

adventured 4y ago

First, you have to hire exceptional people, if you can. If you can't get good enough people, you're going to fail hard inevitably no matter what you do (if you've got a quasi monopoly moat it may take a long rot to get there).

asda_ 4y ago
[dead]

version_five 4y ago

Give them a budget and agree on a set of accountabilities. The same model as buying a managed software consulting project.

dan-robertson 4y ago
Paying for consultants often isn’t a good use of money though, right? Like often the problem is that the right metrics are hard to know in advance and they are typically games in a way that makes it easy for the consultant to meet them without actually delivering what is desired. I think they also make it hard to take (calculated) risks which isn’t necessarily what you’d want.

ninjagoo 4y ago

There might be fundamental incompatibilities here because of orthogonal goals - if you're an ambitious person in a corporate hierarchy won't one (or maybe even primary) goal be to climb the ladder? And if you're a founder won't your goal be to 'grow the product or service'? Now one way to climb the ladder may be to grow the product or service, but in a larger org the ability to influence a product or service in a major way might be a bit limited, with decision-making at the business level being controlled by upper echelons. So the ladder-climbing process would select for different skills and temperament than founding/running a company. Essentially, in a corporate hierarchy, we're asking people with ladder-climbing skills to become business people as they reach the top, and not everyone can make that transition successfully. In fact, I'd go so far as to say that very few can actually make that transition successfully. Human brains learn through feedback [1]. To become a good business person, you need to run a business and get feedback just like a real founder/CEO, including business failures. Your question essentially becomes - how can a CEO structure incentives so that managers at all levels become good business people? It's a great question, to which there is no simple answer that I know of. Would appreciate any pointers to potential solutions. One way could be to treat each team at a certain level (say no more than 50 people) as a business of its own. It might not be the most efficient way for the corporation to deliver on its objectives, but it would likely create a lot of business-savvy managers. But now you have a pool of business-savvy folks that want to get paid like founders, and that might not be possible in a corporation. In terms of (in)efficiency, you could have duplicate teams that provide similar services, wasting resources, and adding costs to spin up new teams as existing ones fail or move on. Something like this might be more feasible at a societal level - a capitalistic structure that encourages the growth of smaller size businesses while inhibiting the growth of mid- to large corporates. Open source organizations actually seem to be the closest that I've seen that seem to operate this way. [1] https://www.youtube.com/watch?v=5eW6Eagr9XA https://www.youtube.com/watch?v=5eW6Eagr9XA

mooreds 4y ago

Hire people with the right kind of ambition, says Ben Horowitz: https://www.fastcompany.com/1685869/right-kind-ambition https://www.fastcompany.com/1685869/right-kind-ambition

deltree7 4y ago

I know HN hates him, but Elon Musk has figured this out and that's why he will always deliver outstanding returns compared to others.

scarface74 4y ago
His company hasn’t delivered outstanding returns as far as profits. Tesla’s stock is mostly hype.
- chris11 4y ago
  Twitter is private, but Elon definitely destroyed value when he took it over.
  - icedchai 4y ago
    Well, he did overpay by at least 50%.
  - negamax 4y ago
    He also paid 4x the price. And took out his frustration and vindication on employees. Doesn't come across as someone with sound judgement or vision
stuff4ben 4y ago
How exactly has he figured this out? I see an egomaniac that drives his employees as if they're just cogs in a machine.
- rippercushions 4y ago
  Per this thread, this seems preferable to letting managers spend all their time building empires. Also, if you're working for any large company, you are a cog in the machine.
- dasil003 4y ago
  I think both you and the GP are missing the essence of what Elon is. He is neither an amazing operator and businessman, nor is he a slave driving demon. He does have a huge ego and need for attention, I'll give you that, but fundamentally he is someone who cares more about solving big problems than he does about money or people. The push to deify or villify him is all about satisfying ones own judgement, but personally I find those reductive opinions to be far less interesting than actually looking at the various things he's done and evaluating them on their own merits.

potatolicious 4y ago

A few thoughts having worked at a bunch of large companies before, with varying degrees of rewarding empire-building. - The orgs most susceptible to rampant empire-building are ones where execs seem disconnected from the product. IMO the best way to discourage rampant headcount growth is for upper-level execs to scrutinize hiring needs. Some orgs (especially pre-2022) have been apt to approve headcount growth without sufficient oversight as to what the new people are actually supposed to be doing, and whether or not they're necessary. Loose hiring policies result not only in corp bloat and high expenditures, but reward empire-builder managers more than product-oriented managers. - To double down on that point, part of the problem is that in too many companies execs and managers don't speak product. The point of hiring is ostensibly to ship more/different/better product, but when execs themselves do not speak product hiring becomes divorced from this underlying goal. You hire so your seniors have juniors to mentor. You hire so a manager can get promoted. You hire to "expand your scope". But at the end of the day there is only one valid reason to actually hire: so the company can produce more/different/better products that it otherwise cannot do without hiring. This is especially true at companies like Google and Meta where the PM track and Engineering tracks are fully decoupled.