Great Discussion on Corporate Hierarchies

Damn, but this is good! Jeremy Weiland of Social Memory Complex got into an interesting discussion with Alexander Kjerulf on the latter's blog post "How Not to Lead Geeks." The post itself wasn't bad--a fairly good Dilbertesque take on tech workers' negative reactions to the pointy-haired boss. But the discussion in the comments was amazing.

Weiland entered the fray about halfway down, channelling Friedrich Hayek and R. A. Wilson:

I would be very interested in your opinion on the proper role of management.

We can talk all day about the ways management messes up in its relations with any social category (as if this type of conflict was anything fundamentally different than the ongoing tension between labor and management since the Industrial Revolution) but I’m afraid a lot of geeks see management as the solution to a problem that management itself created. Here’s the problem: no matter if you’re a geek, genius, or MBA, unless you’re doing the work, you’re in the least informed position to make decisions. Reports, scrums, charts - none of it is a replacement for being there, doing the work, and knowing the situation at hand. You can’t separate the experience of work from the process.

The problem isn’t bad management, it’s the whole concept of management: the idea that decision making can be separated from the actual work.... The problems with management are the same problems in any organization hierarchically structured where information flows between relatively more powerful and relatively less powerful people - because the jobs are on the line, and management is always playing catch up to the true situational picture, managers are simply told whatever they need to hear in order not to be fired much of the time. There’s a delay involved as well as a fundamental case of rose-colored glasses. It’s easy to see why somebody like Ken Lay could argue he didn’t know what was going on - in fact, I fail to see how any manager who isn’t getting his hands dirty on a project could possibly claim a knowledge of the project sufficient to judge it.

Really the only use for management is to keep other bureaucracies internal to the organization (such as HR) and external to the organization (such as the IRS or OSHA) from bothering the creative guys. Other than that, I see no reason why - if we’re going to have some people doing make-work “management” - they should be calling the shots. I don’t see why we working geeks should need to ask for the right to make decisions in the first place, other than that the power relationships are severely out of whack. Maybe we should start reforming there, instead of finding better ways to use managerial voodoo to pretend like managers have some gift to offer those of us who actually do the work.

Kjerulf responded in the voice of Tom Peters, who can also be pretty good at times:

Jeremy: You’re right, as long as we define management as making decisions for others. That has of course been the traditional role of management for the entire industrial age and we’re stuck with the paradigm.

However, I think that this type of management works pretty badly in industrial, production-oriented workplaces. In knowledge-based, creative businesses it’s even worse, for precisely the reason you mention: It’s an attempt to concentrate decision making away from the people actually doing the work. In a constant world, this has at least a passing chance of working. In a fast-changing business environment? Forget about it!

So traditional management is out. But leaders and managers are still very much needed, it just has to be a different brand.

Yesterday it meant making decisions, allocating resources, making plans, checking quality and enforcing regulations.

Today it has to be coaching, mentoring, teaching, facilitating and supporting.

THAT is the role of management. One that not only makes people happy at work but also gives businesses much better results. It’s not pie-in-the-sky, this goes straight to the bottom line!

Back to Weiland:

...let me make clear: I have no problem with managers are you describe them - at least, when they make business sense. I have no problems with hierarchies, where they naturally occur. But as long as one has to operate in the business world, one will have to deal with those inputs and influences that drain energy from productive organizations. So if managers can keep that stuff off of the guys in the trenches, provide actual (if marginal) value to those workers, and make sure the focus is not on “command and control” (it didn’t work in the Soviet Union; it’s not going to work in the corporation) but on arriving at decisions through a process that at least APPROACHES informed consensus - while still giving individuals freedom to take risks and pursue personal visions of value-adding to the organization - then I think that’s great. And if some suit-and-tie types get a little scared in the process, well, so much the better - market corrections happen, right? :-)

If leaders foster this environment without overburdening the individuals (i.e. seeing employees as “resources” whose output must be maximized rather than essential, creative, nuturing parts of an organic organization) then great. And I agree - a well managed work force is a total bottom line matter. The problems in current corporate climates rise not from the profit motivation but from the inability of management to see the long term time horizon, where the true growth and profitability occurs - usually from a lack of information, sophistication, or passion about a given project. True revolutionary, profitable value creation rarely occurs overnight or over the course of a year, even.

The key is to get managers into a frame of mind where they don’t interject themselves where unneeded. You sound like the type of manager who manages from a position of competence and not simply “monitoring human resources”. But please be aware: you are the exception (as I’m sure you already know). There is a “class” of white collar paper pushers and timesheet minders who see the worker as an adversary, not a partner, and who try to harvest the forest rather than grow and nurture it. This is a matter of fundamentals: “Who moved my cheese” or “Fish!” philosophy and mindlessness can’t mask it.

That "time horizon" thing is pretty synchronicitous, if that's even a word. I first read this exchange several weeks ago, before I read the book that resulted in this recent post: "Robert Jackall on Corporate Bureaucracy."

Kjerulf enthusiastically endorsed that comparison of top-down direction in the corporation and in Gosplan:

I could not say it better!

He also linked to a post about the success of Enterprise Systems:

* We had no managers
* People did excellent work
* We made major decisions together, democratically
* We made good money (not obscene, just good :o)
* We had fun
* All employees became co-owners
* People didn’t work too much - 40 hrs a week or less
* Leadership changed hands dynamically

Elling joined the exchange at this point, expressing his doubts about the dispensability of hierarchy:

....I think you’re attacking structures which you can do without in a small company....

In a large company there’s a NEED for the structures which you are proposing to tear down. And I think you’d notice it if you spent some time as a manager in such a company.

Weiland's response:

I can anticipate some of this need - the need to account for diverse costs accurately and thoroughly, the need to maintain a standard of output for workers in an organized, fair fashion, etc. - but these play to the weaknesses of large organizations. In other words, large organizations SHOULD be at a disadvantage, and the structures we’re proposing tearing out actually add value only in the sense that MegaCorp is inherently inefficient and out of scale with the market.

So... the need for management - and the organizational pathologies that accompany it - are symptoms of the problem of scale, not the problems themselves.

Elling again:

What I mean is that large companies need to have a hierarchical structure. And in such companies there need to be people assigned with jobs to “manage” groups of other people. If you do not organize it this way, it simply becomes impossible to handle.

Cityzen jane made an excellent point about the difference between intrinsic and extrinsic motivation, that sounded an awful lot like Paul Goodman:

What a lot of manager’s seem not to understand in more traditional companies (and I’ve worked both for huge companies and skunkwork garage projects) is that creative people (geeks, visual people and researchers) are intrinsically motivated. If they are good, they wake up and go to bed and dream about ng things better, more elegantly - more beautifully. I certainly do.

And that there is no better way to kill that in a person than to apply arbitrary, theory driven management methods and standards to them, or try to shove a technology you read about in PC magazine as the next big thing at them. Most managers get into their positions because of external motivational factors…. more money - bigger car, bigger house…Yes, those perks are great icing on the cake - but the best most of US hope for is a place where our talents and brains can be fully expressed.

We are internally motivated. We are on the eternal search for the best possible work situation and we very often will leave on a dime - for less money to find it....

It’s hard for a manager to hear that for the most part they are often irrelevant to the productivity of the techie. But it’s pretty much the case. I spend about 70 hours a week. 40 required by my job, the rest - because I am insatiably curious about technology and how to do things better. It is my nature. You want to encourage me to be myself in this regard or I am unmotivated to use my extra cycles for YOUR bottom line. With proper care and feeding I wish to make that MY bottom line - but that doesn’t happen if I’m a just cog in your plan for world domination or at least a Lexus by end of next quarter.

Weiland's response:

I think this applies to production and line workers, too - it’s just that management likes inculating a culture that prevents them from expecting the right sorts of incentives for efficiency. Whenever possible, management wants a bunch of predictable, homogenized worker “units” rather than having to deal with people with different talents, motivations, etc. It’s just easier if you’re gonna do central planning....

My point is that for the typical manager, a workforce of 100 people who all produce at 80%, who all have the same world view, and who all have the same capacities - that is FAR preferrable to a workforce with some people who are 100% prouctive, some who are 60% or 70%, and who are diverse and have different goals in life.

That’s why in the blue collar industries, the goal is to deskill labor by making everything an “assembly line” process. If they can get labor to do just what’s necessary for production with no creativity - and have management direct all production centrally - they prefer it even though it’s less efficient because it makes them necessary.

He tied this strand in with the other one, Elling's remarks on the need for hierarchy in large organizations:

The problem for large organizations with this model [of bottom-up organization and self-directed work] is that it’s hard to guarantee reproducable results, NOT that it’s unworkable. The key is the control issue - they’d rather have control than success when it comes down to it. It seems perverse and counterintuitive but it’s true - when your job is on the line and you don’t have control over all the factors of production, you can be incredibly risk adverse, to the point of defeating the whole reason you exist: profitability.

Large organizations need to moderate the volatility of human factors such as creativity, personal lives, touchy-feely concerns, etc., which is why they higher managers to turn us all into “human resources” that are rationalized and understandable. They’d much prefer a decrease in productivity to a decrease in forcastability because of the inherent problems with large scale organization (it’s the same with a government, an educational institution, etc.). This is largely due to an entire class of people who see management as a task distinct from the actual productive work, which as I said before is ridiculous. They are scared on some level because they often simply don’t understand what it really means to produce good value. How can they - human motivation and ingenuity is not something you can break down into a cut and dry formula and “institutionalize”!

Since large groups can’t internalize the decision making necessary to engage in authentic risk (like individuals can) they are doomed to continuously direct workers by fiat, micromanage strategies where they do exist, and collect copious amounts of metrics to systematize what is essentially an entrepeneurial, personal, passionate endeavor that really can’t be quantified.

For me, the question is not whether or not large organizations need hierarchy. It's whether large organizations themselves are needed. All the management machinery that was created to manage the large corporation became necessary only because the state encouraged the growth of firms that large in the first place--firms far beyond the point of diminishing returns when it comes to efficiency. One might as well ask whether hierarchical management was "needed" in a single state factory that produced half the widgets used in the USSR. The question ought to be why the factory was that big to begin with.

Kjerulf was so stimulated by the discussion that he summed it up in a new post: "The Need for Structure."