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Creo (based in Vancouver, BC) used to be a company that tried to address this. The concept that was used was called "unit presidency". Each employee was empower

• sroussey 2y ago
  > This extended to decisions that involved spending money, not just should you pick language X or language Y for your next software project. Just want to point out, the choice to pick language X or language Y is very much about money. Training, triage, getting into production, scaling, testing, etc. Most bigger picture technical decisions are in fact, economic ones.
  • YZF 2y ago
    For sure. I was just pointing this out because I've worked in organizations where there was no problem with delegating language choice to engineers but the minute any actual money had to be spent it was treated very differently. You are absolutely right that technical decisions are economic ones.
• LeFantome 2y ago
  [Edit: apologies for the wall of text. A lot of pent up emotion around Creo.] Best place I ever worked. This was “the Creo Philosophy”: Our priority is to provide unique and sustainable value to our customers. 1. All decisions must be based on sound economics. 2. Key decisions are made in consensus, with full team agreement to accept and implement the decision. 3. We believe that people are most effective when self-managed. 4. Compensation is based on contribution, gauged largely by an annual peer review. 5. All employees share the wealth created by their hard work and innovation. Creo was extremely proud of how “flat” the organization was but my primary take-away from there as an ex-employee is actually how important management is. First and foremost, management created a shared vision of the future. Not silly posters to laugh at but a real shared mission. It was exciting and motivating. Every Creoite knew how the world would be changed when we were successful. Decisions could be distributed because it was obvious which outcomes were aligned with the companies goals. Trying to push outcomes not aligned with the goals was hard ( as it should be ). Second, there was a strong framework for how decisions were made and how to identify good decisions from bad ones. Economic thinking and consensus were two important principles that you were expected to follow unless you could demonstrate very good reasons not to. Third, management provided a great deal of mentorship, both through direct education and through calling re-enforcing the primacy of the principles. One of the reason Creo could be so “flat” is because everybody knew how the executives would behave if they were in the room and they could insist that others act accordingly. It was easy to assume executive sponsorship without having to resort to politics. “We do not tolerate politics” was an important mantra through the best parts of the company history. Most importantly, I got to experience the everyday effectiveness of the organization under three different CEO’s: Ken Spencer, Amos Michelson, and Mark Dance. The “culture” was only as good as the man at the helm. At Creo, we made the claim all the time that we basically did not have hierarchal management. It was true we did not always have “supervisors” but we had the best management I have ever worked for. As said above, Creo stopped working when it acquired a rival that had more employees than it had. The politics exploded. The effectiveness disappeared. Financial performance followed. The company was sold to avoid a shareholder revolt. A sad end for a spectacular organization. The original Creo employees stuck to the principles. Well, except management. Hierarchical authority was suddenly more important. Decisions did not have to make economic sense. What mattered was who was doing the deciding. Consensus stopped being a requirement. Speaking truth to power stopped being a path to better decisions and started becoming a career mistake. Executive sponsorship became real and aligning with people in position became the most important criteria for individual success. Empire building replaced shared vision. The lack of alignment between making the company successful and being successful as an employee completely broke. The company failed. Managers and employees looked at Creo folks and their “philosophy” like naive children. Sure “the philosophy” worked well enough for Creo to beat them to begin with but, once merged, the acquired were right. Creo was idealistic and naive. But this was not inevitable. Why did Creo fail? Did “the philosophy” not scale as the final CEO I think believed? I do not think so. I see it purely as a failure of management. The final CEO provided little vision. Other than a focus on the bottom line, there was no insistence on economic decision making ( eg. instead of breaking up meetings because they had too many people in them - too expensive - he held meetings with dozens of people in them ). Instead of coming down on politics and insisting on consensus, executive authority became sacred. In fact, the term “consensus” became most often used when an executive used it as an excuse for their own lack of leadership by claiming the team should have to solve its own problems. If strong management had provided the leadership, the mentorship, the vision, and support for the culture ( most importantly the principles of good vs bad decision making ), Creo would still be with us. If I was lucky, I would still be working there. Creo ruined me in a way. I have never been able to accept why things cannot be as good anywhere else. Such simple ideas. So dramatically effective. Unfortunately, good management ( executive level ) is an absolute requirement. Even hundreds or thousands of well trained employees was not enough to make these principles work without strong management behind them. Management matters. I got to experience some amazing leadership for a while. All I can do is try to emulate those role models as best I can. And everywhere I go, I try to make economic thinking an important part of how decisions get made. RIP Creo. You left us too soon.
• electrodank 2y ago
  > Each employee was empowered, expected, and trained, to make decisions as if they are the president of the company. And compensated at a president’s salary for the new insurmountable levels of responsibilities right?
  • marcinzm 2y ago
    Not everyone is afraid of responsibility simply because it's responsibility.
    • chii 2y ago
      It's not about being afraid, but about being compensated for.
      • Aeolun 2y ago
        If so, great, if not, I’ll still take it because otherwise someone else will have it, and they very rarely live up to my standards.
      • marcinzm 2y ago
        Why does responsibility require or deserve more compensation? You're stating something as if it was a law of the universe but provide no reasoning.
  • LeFantome 2y ago
    You would be surprised. I know of Creo people that worked in the call center that bought million dollar homes with their compensation from Creo.
    • lupire 2y ago
      What is Creo?
      • pseudalopex 2y ago
• marcinzm 2y ago
  > Another requirement for this to work well is that management (e.g. the CEO or other leaders) are able to lay down a broad strategy for the people of the company to execute on. If the leadership has no strategy then tactical decisions can not be made properly. They also need to make sure there's coordination and structure. In my experience this isn't a core requirement so much as the ability to discern if a proposed strategy is good or not based on first hand experience. In other words, the ability to spot very well written bullshit yourself without relying on anyone else's perception of it being bullshit or not. If you need to rely on other people's opinions or the way a proposal is written or something else then it will not work. It's very rare for this to be the case at a larger or public company. Even if the CEO has this ability if the board doesn't then it will be the same.
• th324j234llkdf 2y ago
  Trouble is most middle/upper-management is so technically incompetent, that not only can they not do technical work that their moronic decisions entail, but they can't even distinguish b/w arguments for how something is to be accomplished. As a metaphor: for problems in NP, verifiability is in P. So you have some super-duper savant alg. that outputs some answer, but even a dumb-system should be able to quickly verify. Our managers are typically dumber than this.
  • btbuildem 2y ago
    I'd argue the opposite: it's the technically-savvy people who got promoted to management/leadership positions, while lacking the people skills, the strategy chops, and the basic understanding of business realities - these are the truly incompetent managers.
    • makapuf 2y ago
      But you need to be able to promote good technical people or they will finally leave and you ll be left with gif managers an no one good technically to manage.
      • Tabular-Iceberg 2y ago
        Gif managers?
        • makapuf 2y ago
          Sorry bad spellchecker. Good managers.
  • mavelikara 2y ago
    Where do these clueless managers come from?
    • Aeolun 2y ago
      Somewhere amongst the 90% of emloyees that do not have a strong opinion one way or the other?
• joe_the_user 2y ago
  I'm not sure what "empowered" means relative to the parent article. Aligning each employee's incentives with ROI seems extremely difficult. The former Yugoslavia had a system of self-managed enterprises where large firms shared profits equally among employees and employees ran the enterprise democratically (usually electing a manager). The problem is that profitable enterprises would democratically decide not to hire any more people since doing so would dilute their profits.
  • yosefk 2y ago
    I did not attempt to cover heterodox organizations such as what Creo appears to have been in the article. I think these are extremely interesting, though quite likely to fail, regress to the mean, and be hard or impossible to scale or replicate. But, I'm sure the first multicellular organisms were no picnic, either. Eventually humans will learn to work together way better than today and anyone trying already now has my attention and sympathy, especially if there are positive testimonials by employees (there's no shortage of managers who claim to run a different kind of org / culture when it's either false or true in a bad sense, meaning, their org is much worse than the standard system; in fact I like managers who apply zero lipstick to the pig that is their org and do the standard ugly thing in an openly ugly way - teaches you how to operate in this environment more quickly vs trying to get people to remain naive to their detriment)
    • joe_the_user 2y ago
      Your analysis could be applied to Creo without much change because you're looking at implicit incentives in any place managers (or resource-controllers) are expected to accomplish goals. That said, I think your analysis is a bit weakened by a moral elements (good managers vs bad managers). And even more, it's not necessarily bad for an organization to have locally controlled resources. One can posit an omniscient central controller that would manage resources better than local managers but it's likely that there are limits to both central controllers and local managers. What's "best" depends on the task, the organization and who's judging the result.
  • chii 2y ago
• highfrequency 2y ago
  Interesting! A few questions: 1. Could you expand more on the practical details of how decision making by consensus worked? Eg if I want to buy a $1m machine, how many people and which people do I convince that this makes economic sense? Who can actually sign off on the purchase? 2. How did incentive based compensation work for employees whose work could not directly be tied to the bottom line? For example, legal and compliance staff sometimes prevent profit making activity that is deemed as risky - making these functions prime candidates for internal monopolies that drag down the performance of other groups. Or recruiters whose natural incentives revolve around number of people hired rather than efficiency. 3. How is economic decision making enforced? What stops a middle manager from acting out of self-interest and expanding his own headcount or project scope to increase his own importance at the expense of company economics? Even if there is some consensus required, it’s probably not hard to convince a few friends with fanciful projections. Is this mostly a camaraderie / honor system thing? If you feel like these are the wrong questions and are somehow missing the point - let me know! Sounds like Creo pulled off something special and I’m sure there is lots to learn.
  • YZF 2y ago
    1. You were supposed to identify who the stakeholders were. Let's say you're a mechanical engineer and you need some $1m lathe. The economic decision making basically says you need to consider options like contracting the work to someone that has that machine and show some reasonable ROI period on actually buying that lathe vs. contracting it out or renting it or whatever other reasonable alternatives. People involved in this decision could be your team lead, if you're a mechanical engineer, and the project manager. If the amount is so large that it impacts the entire company maybe the CEO is also involved. You get everyone in the same room and talk about it. Anyone can sign off on the purchase. The project I was on built some large very expensive machines (multi-million dollar per machine) and we've done things like build clean rooms and buy pretty expensive equipment without a lot of friction. I worked on software so I wasn't personally in the loop for those purchases. 2. I guess it's no different than RSUs, stock options or a bonus plan or any other form of profit sharing. At the end of the day people are trusted to do their job. At least during my time with Creo it didn't seem to create a barrier to experimenting, if anything there were some projects that were maybe were too experimental. 3. Not enforced in any formal way. Peer review and just culture/peer pressure would do the job. I am aware of one case where someone abused the system and someone found out and they were fired. In terms of your example, the power was fundamentally less with the middle manager and more with the engineers in the first place, so there wasn't a lot to gain personally from empire building as in traditional companies. For the most part managers did not manage people, they managed projects. For example, as a software team lead I was under a project manager but I didn't report to him in the traditional sense of the word and they did not control my compensation (which would be mostly the outcome of the peer review process). The project manager's success was also measured by peer review. I think the interesting thing about Creo, and what made it tick, was that the founders were in it not just to make money. They wanted to create a place they would want to work in, were passionate about this, and tried to hire people that fit into this vision. They have seen the things they didn't like and thought they can do better. It sort of happened in the right time and place where it managed to gain momentum. EDIT: I managed to re-find this old video of Amos Michelson explaining how this works better than me: https://www.youtube.com/watch?v=mXTWMlRK0LE https://www.youtube.com/watch?v=mXTWMlRK0LE
• wslh 2y ago
  The problem is finding people that have those traits, it is far from common even when you try to empower people to take decisions. It is also good to take into account the different cultures regarding this. A way to not be extreme is to do that with x% of people (beyond their hierarchical level in the organization).
• refurb 2y ago
  I had a similar experience thought not quite as outstanding. The best manager I had was: - focused on organizational efficiency. She’d tell you “you three, make a decision” instead of groups of 10+, which seemed to be the default - wouldn’t sugar coat things, but was never mean (many leaders miss this). If she disagreed you knew it but it was done in a respectful way. - the best part of her management was goal setting. I was 3 goals, and even 10 years later I still rattle them off. Short, actionable. Her attitude was “if your work doesn’t move towards these goals, stop doing it” Like you, it’s hard to work in jobs later when management isn’t up to snuff. It is possible to have efficient, well managed large organizations. It’s just that the vast majority of managers don’t have the skills and as you said, without someone at the top setting the rules it never works.
• polishdude20 2y ago
  How did the consensus bit work? Like, how much consensus would you need from people before making a decision? How much time did everyone spend voting on consensus?
  • darby_nine 2y ago
    Presumably you'd have moments of contact and separation where strategy and policy are communicated. I don't see any impression this is a replacement for executives.
• deleted 2y ago
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