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There seems to be an assumption in this article that you need to adopt a typical command-and-control structure to run a successful company. There are several ex

There seems to be an assumption in this article that you need to adopt a typical command-and-control structure to run a successful company. There are several examples of very flat organisations showing this is not the case. Valve and Github are well known examples in the tech. industry. Ricardo Semler / Semco (http://en.wikipedia.org/wiki/Ricardo_Semler http://en.wikipedia.org/wiki/Ricardo_Semler) is an example from outside tech. It's probably more work to run an organisation with a flat structure, but it seems to be more successful if you get it right.

elemeno 14y ago
I'd suspect though that the flat model can only work while a company is below a certain size.
- ruff 14y ago
  There are a number of much larger "organizations" out there that run with dispersed/non-centralized authority. Morning Star is a good example cited by HBS Review: https://archive.harvardbusiness.org/cla/web/pl/product.seam?c=573&i=15715&cs=7c855bfce2fd1c3860846954978b1181 https://archive.harvardbusiness.org/cla/web/pl/product.seam?... BTW, if you're interested in these types of orgs... the linked article is interesting because it actually goes into some of the Pros/Cons of running your company this way. It's not written by an ideologue.
- SatvikBeri 14y ago
  Gore & Associates has a flat model and 9,000 employees.
rgbrenner 14y ago
It's probably more work to run an organisation with a flat structure, but it seems to be more successful if you get it right. Define "more successful"? Valve has 250 employees, github 140. Are you saying that these are "more successful" than more traditionally managed/structured companies like Wal-Mart -- the world's largest retail company with $450 billion in revenue/year?
- noelwelsh 14y ago
  Yes, I am. I wager: - The founder have enough money that they never need care about it again. - Employees are significantly happier on average than Walmart employees. Those are the only metrics I care about.
  - michaelochurch 14y ago
    I regret that I have but one upvote to give that post, good sir.
  - zaidf 14y ago
    Unfortunately you are using a definition that is not shared by most people when judging business success in the long haul. It is okay to have your own metrics but it is disingenuous to suggest that your metrics are also the metrics generally considered by the majority of industry experts. Why do you feel that profits, market cap etc. are poorer metrics to judge a business success than your metrics? You should write about that.
  - rgbrenner 14y ago
    Google is not flat, and was the best company to work for in 2012 [0] because of how happy their employees are. In addition to meeting your made up measurements, significantly more people associated with Google have become richer than at GitHub; Google has made billions more money than GitHub; Employs more people; has more products; etc; etc; etc. Flat works in small companies. It is impossible once they get above a certain size. They cannot be "more successful".. because they will eventually need to restructure as they grow larger. [0] http://money.cnn.com/magazines/fortune/best-companies/2012/snapshots/1.html http://money.cnn.com/magazines/fortune/best-companies/2012/s...
    - michaelochurch 14y ago
      You don't need to be "flat" for people to be happy, but you do need a decent amount of employee autonomy. You probably need some big-picture direction at 1000+ employees, but you don't need the closed-allocation "you work on this project, or you pack your bags" extortion of most companies. Some Googlers have autonomy, some don't. I don't care to get into this discussion because for all my criticism of it, I really admire Google (the engineers and the vision, if not the middle management and HR) but I'll just say that the Googlers who've established a basic autonomy are very happy. They pick their projects and have little interest in leaving, unless to do their own startup. However, there's an underclass who face manager-as-SPOF and live or die by their "calibration scores". For them, Google is a closed-allocation company and these people are not happy. You don't need "flat" structure outright, but open allocation is non-negotiable in technology in 2013.
michaelochurch 14y ago
Managers and "hierarchy" aren't toxic if it's conceptual hierarchy and if management is more of a sponsorship/mentoring role, but when you have a stable hierarchy of people and begin restricting internal mobility, you're fucked. You can't be completely "flat" at 10,000 employees, but I refuse to believe that a company can't get to that point and retain a decent culture. However, you probably can't grow to that number in 4 years. Companies lose their culture when they hire before they trust. That makes an underclass that's used for grunt work but gets no respect. Soon they hire an "HR expert" who sets up a stack-ranking system and an annual "low-performer" witch hunt and the company's culture is garbage. I can't put a number on what is growing too fast, but you can't hire before you trust. By "trust", I mean that people should be trusted with their own working time to do good for the company. I'm not saying they should have million-dollar expense accounts.

elemeno 14y ago

I'd suspect though that the flat model can only work while a company is below a certain size.

ruff 14y ago
There are a number of much larger "organizations" out there that run with dispersed/non-centralized authority. Morning Star is a good example cited by HBS Review: https://archive.harvardbusiness.org/cla/web/pl/product.seam?c=573&i=15715&cs=7c855bfce2fd1c3860846954978b1181 https://archive.harvardbusiness.org/cla/web/pl/product.seam?... BTW, if you're interested in these types of orgs... the linked article is interesting because it actually goes into some of the Pros/Cons of running your company this way. It's not written by an ideologue.
SatvikBeri 14y ago
Gore & Associates has a flat model and 9,000 employees.

rgbrenner 14y ago

It's probably more work to run an organisation with a flat structure, but it seems to be more successful if you get it right. Define "more successful"? Valve has 250 employees, github 140. Are you saying that these are "more successful" than more traditionally managed/structured companies like Wal-Mart -- the world's largest retail company with $450 billion in revenue/year?

noelwelsh 14y ago
Yes, I am. I wager: - The founder have enough money that they never need care about it again. - Employees are significantly happier on average than Walmart employees. Those are the only metrics I care about.
- michaelochurch 14y ago
  I regret that I have but one upvote to give that post, good sir.
- zaidf 14y ago
  Unfortunately you are using a definition that is not shared by most people when judging business success in the long haul. It is okay to have your own metrics but it is disingenuous to suggest that your metrics are also the metrics generally considered by the majority of industry experts. Why do you feel that profits, market cap etc. are poorer metrics to judge a business success than your metrics? You should write about that.
- rgbrenner 14y ago
  Google is not flat, and was the best company to work for in 2012 [0] because of how happy their employees are. In addition to meeting your made up measurements, significantly more people associated with Google have become richer than at GitHub; Google has made billions more money than GitHub; Employs more people; has more products; etc; etc; etc. Flat works in small companies. It is impossible once they get above a certain size. They cannot be "more successful".. because they will eventually need to restructure as they grow larger. [0] http://money.cnn.com/magazines/fortune/best-companies/2012/snapshots/1.html http://money.cnn.com/magazines/fortune/best-companies/2012/s...
  - michaelochurch 14y ago
    You don't need to be "flat" for people to be happy, but you do need a decent amount of employee autonomy. You probably need some big-picture direction at 1000+ employees, but you don't need the closed-allocation "you work on this project, or you pack your bags" extortion of most companies. Some Googlers have autonomy, some don't. I don't care to get into this discussion because for all my criticism of it, I really admire Google (the engineers and the vision, if not the middle management and HR) but I'll just say that the Googlers who've established a basic autonomy are very happy. They pick their projects and have little interest in leaving, unless to do their own startup. However, there's an underclass who face manager-as-SPOF and live or die by their "calibration scores". For them, Google is a closed-allocation company and these people are not happy. You don't need "flat" structure outright, but open allocation is non-negotiable in technology in 2013.

michaelochurch 14y ago

Managers and "hierarchy" aren't toxic if it's conceptual hierarchy and if management is more of a sponsorship/mentoring role, but when you have a stable hierarchy of people and begin restricting internal mobility, you're fucked. You can't be completely "flat" at 10,000 employees, but I refuse to believe that a company can't get to that point and retain a decent culture. However, you probably can't grow to that number in 4 years. Companies lose their culture when they hire before they trust. That makes an underclass that's used for grunt work but gets no respect. Soon they hire an "HR expert" who sets up a stack-ranking system and an annual "low-performer" witch hunt and the company's culture is garbage. I can't put a number on what is growing too fast, but you can't hire before you trust. By "trust", I mean that people should be trusted with their own working time to do good for the company. I'm not saying they should have million-dollar expense accounts.