5 ms·

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 structu

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.

mathattack 13y 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 http://en.wikipedia.org/wiki/Dunbar's_number
- mortenjorck 13y 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.
  - mathattack 13y ago
    Good point. CEOs tend to be good relators, so that biases the number up. They have to relate to a lot of externals, which would push the # down. My guess is salespeople would utilize most of their attention externally. Perhaps junior engineers internally? (This could also explain why it's economical for companies to pay for dinner and sponsor happy hours)
  - tbrownaw 13y ago
    That 150 limit also involves your ability to keep track of people's relationships to eachother I think. Which would mean that you should be able to maintain relationships with significantly more people if they're divided into mostly-disjoint groups.
    - mathattack 13y ago
      Exactly - organizational hierarchy. :-) This is where the "There are no managers" can break down. Another area that organizations struggle with is spending the time to put the structure in. They may say, "It takes more effort to put in structure, so while we want to be structured, let's just work harder as we go from 150 to 250, we'll solve it later when we're less busy" Then it goes from 250 to 400, then the next thing you know it's a 1600 person mess. :-)
      - thibauts 13y ago
        What if you break the company in two companies (or more) ? The problem may be trying to keep a flat looking small pyramid look small, when it is in fact starting to show its real face. I don't know if it's even possible, but why not push a small group to become owners of their own shop, outsourcing work to them ? This might push those small groups to seek other connections to the external world and thus build strength and resiliency. Of course this implies giving up the money. This is probably where the core tension lies. I guess many wouldn't even want to think about it.
        yuhong 13y ago
        I think michaelochurch has pushed for open allocation, which solves the main problem in a similar way.
        weichi 13y ago
        It's a really interesting question, and one that economists have studied quite a bit - google "theory of the firm" for some details.
        mathattack 13y ago
        This is the idea for divisional structures. P&G does this by letting their brands fight it out for resources, creating the spirit of independent companies. It worked out for a while, but eventually they found the right structure was by product category. (Soap the category versus Tide the brand) Semco (quoted elsewhere) was big on the "fund your best people's ideas" concept to cut loose companies. When you have to get external funding too, it forces discipline. The kerietsu (sp?) concept breaks down during tough times when partial owners subsidize the weaker units in the group. This happened in Japan. This isn't a simple problem, because there's no one size fits all solution.
dnautics 13y 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.
- notahacker 13y 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.
  - dnautics 13y ago
    fair point. I think corporations live on a spectrum of authoritarianism, and these are "far out in the distribution" but they aren't perfect, and I don't think in reality a perfectly flat corporation can exist because all employees have a natural range of skillsets. But by "dramatic" I meant dramatic relative to the parent post's claim about organizational size relative to success of the model.
- mathattack 13y ago
  The Semco story is fascinating. I wish I knew some folks that worked there. The wiki (http://en.wikipedia.org/wiki/Ricardo_Semler 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.
  - mikeleeorg 13y ago
    I used to work for Viant, a digital consultancy where they kept every office to about 100 (or was it 150?) employees. If they had to hire more employees, they'd spin off a new office. This was based on Dunbar's number (referenced elsewhere in this thread).
jasonwatkinspdx 13y ago
You're assuming this is a consensus or self directed free for all style flat approach. It's not: http://holacracy.org/constitution 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.
- nomade0 13y ago
  All this insight from reading the constitution? I'm impressed
  - jasonwatkinspdx 13y ago
    It just frustrates me that people pattern match trivial criticisms without actually learning anything about what they're criticizing.
jeremymcanally 13y 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 13y 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-textiles-terri-kelly http://www.theguardian.com/business/2008/nov/02/gore-tex-tex...

mathattack 13y 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 http://en.wikipedia.org/wiki/Dunbar's_number

mortenjorck 13y 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.
- mathattack 13y ago
  Good point. CEOs tend to be good relators, so that biases the number up. They have to relate to a lot of externals, which would push the # down. My guess is salespeople would utilize most of their attention externally. Perhaps junior engineers internally? (This could also explain why it's economical for companies to pay for dinner and sponsor happy hours)
- tbrownaw 13y ago
  That 150 limit also involves your ability to keep track of people's relationships to eachother I think. Which would mean that you should be able to maintain relationships with significantly more people if they're divided into mostly-disjoint groups.
  - mathattack 13y ago
    Exactly - organizational hierarchy. :-) This is where the "There are no managers" can break down. Another area that organizations struggle with is spending the time to put the structure in. They may say, "It takes more effort to put in structure, so while we want to be structured, let's just work harder as we go from 150 to 250, we'll solve it later when we're less busy" Then it goes from 250 to 400, then the next thing you know it's a 1600 person mess. :-)
    - thibauts 13y ago
      What if you break the company in two companies (or more) ? The problem may be trying to keep a flat looking small pyramid look small, when it is in fact starting to show its real face. I don't know if it's even possible, but why not push a small group to become owners of their own shop, outsourcing work to them ? This might push those small groups to seek other connections to the external world and thus build strength and resiliency. Of course this implies giving up the money. This is probably where the core tension lies. I guess many wouldn't even want to think about it.
      - yuhong 13y ago
        I think michaelochurch has pushed for open allocation, which solves the main problem in a similar way.
      - weichi 13y ago
        It's a really interesting question, and one that economists have studied quite a bit - google "theory of the firm" for some details.
      - mathattack 13y ago
        This is the idea for divisional structures. P&G does this by letting their brands fight it out for resources, creating the spirit of independent companies. It worked out for a while, but eventually they found the right structure was by product category. (Soap the category versus Tide the brand) Semco (quoted elsewhere) was big on the "fund your best people's ideas" concept to cut loose companies. When you have to get external funding too, it forces discipline. The kerietsu (sp?) concept breaks down during tough times when partial owners subsidize the weaker units in the group. This happened in Japan. This isn't a simple problem, because there's no one size fits all solution.

dnautics 13y 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.

notahacker 13y 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.
- dnautics 13y ago
  fair point. I think corporations live on a spectrum of authoritarianism, and these are "far out in the distribution" but they aren't perfect, and I don't think in reality a perfectly flat corporation can exist because all employees have a natural range of skillsets. But by "dramatic" I meant dramatic relative to the parent post's claim about organizational size relative to success of the model.
mathattack 13y ago
The Semco story is fascinating. I wish I knew some folks that worked there. The wiki (http://en.wikipedia.org/wiki/Ricardo_Semler 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.
- mikeleeorg 13y ago
  I used to work for Viant, a digital consultancy where they kept every office to about 100 (or was it 150?) employees. If they had to hire more employees, they'd spin off a new office. This was based on Dunbar's number (referenced elsewhere in this thread).

jasonwatkinspdx 13y ago

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

nomade0 13y ago
All this insight from reading the constitution? I'm impressed
- jasonwatkinspdx 13y ago
  It just frustrates me that people pattern match trivial criticisms without actually learning anything about what they're criticizing.

jeremymcanally 13y 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 13y 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-textiles-terri-kelly http://www.theguardian.com/business/2008/nov/02/gore-tex-tex...