We’re not big fans of what I consider “vertical” ambition—that is, the usual career-path trajectory, in which a newbie moves up the ladder from associate to manager to vice president over a number of years of service. On the other hand, we revere “horizontal” ambition—in which employees who love what they do are encouraged to dig deeper, expand their knowledge, and become better at it. We always try to hire people who yearn to be master craftspeople, that is, designers who want to be great designers, not managers of designers; developers who want to master the art of programming, not management.
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From Jason’s latest column in Inc. Magazine: “Why I Run a Flat Company.” More: All of Jason’s Inc. columns.
From Jason’s latest column in Inc. Magazine: “Why I Run a Flat Company.” More: All of Jason’s Inc. columns.
Cameron
on 06 Apr 11Most of what’s written in the article “seems” right, but the problem is this: roles don’t exist/not exist based on whether or not you allocate titles to individuals.
For organizations of non-trivial size, what you typically have are de facto managers w/o a title OR a couple of founders/principles/executives who wear the “manager” hat for all departments. This scales reasonably well if you’re hiring highly-skilled professionals who are capable of self-managing and you keep the company and the team narrowly focused.
I’m skeptical as to how well this would work for organizations with 100+ employees. Again, even if an organization declares “no titles” or “same title for everyone”, a de facto leadership structure will typically emerge. At some point, the lack of labels just makes things more opaque to observers or newcomers.
OnLooker
on 06 Apr 11The article was interesting, but I don’t agree with this. Why not give Sara more responsibility? There had to be a way to do this without having to “bump” her up to a higher level. I find it hard to believe there isn’t some responsibility that Jason and/or David could have given her related to support. Seems like there are 2 chiefs at the top that want to keep tight control over the company. But then again, it is their company, if someone doesn’t like it, they can go start their own company… like what happened in this case.
Mihai
on 06 Apr 11Horizontal growth you say. Hmmm that sound a lot like a Japanese man thinking.
Their culture is oriented on getting better at what they do instead of getting higher on the ladder.
At least that is what we learned at school about the subject.
Kudos.
scottdc
on 06 Apr 11I agree to a point but there is a problem when someone does move on and is applying at other companies as many HR departments put a lot of weight on titles and apparent vertical growth. It’s tough to get a higher paying job without the title to back it up from your last gig, even if it has the same responsibilities.
Lance Jones
on 06 Apr 11Where I work (very large consumer and small business software company), there are two primary paths for employees:
1. Move up “vertically” into management, where their focus changes from applying subject matter expertise to people management.
2. Move up “horizontally” to higher levels within their area of expertise (e.g., senior -> staff -> principal).
Both allow for substantial salary increases, but I would say there is a ceiling for the latter group. There are no VPs that I can think of in the second group, but plenty of engaged and highly paid SMEs.
Thanks for sharing this.
Lance
max
on 06 Apr 11Jeez Lance, I wonder what this “large consumer and small business software company” is where you work! ;)
Ian
on 06 Apr 11Do you folks provide compensation for an employee increasing their breadth of knowledge similar to compensation one would receive from “vertical growth?” How is that growth measured and compensated?
JF
on 06 Apr 11I’m skeptical as to how well this would work for organizations with 100+ employees.
This doesn’t concern us since we’re 27 people. If we see the need to change the way we’re structured once we hit a different point, we will. Until then, it’s a waste of our time to worry about how something may or may not work in the fantasy future.
Aaron M
on 06 Apr 11I would in some ways myself like to move up in a sense of having more responsibility, but i dont at the same time want to become a manager that just looks over people. I love being knee deep in the code, and from my current standing, I never want that to change. I agree with Jason’s point that horizontal makes sense and is more effective in a smaller company. At my work we do have managers, but it’s not overkill. Theres about 16 of us under one manager for production. The whole office is about 50-60 people.
Cameron
on 06 Apr 11Until then, it’s a waste of our time to worry about how something may or may not work in the fantasy future.
Of course. It also seems silly, though, to suggest that there isn’t hierarchy in place today and that your organization doesn’t depend on that hierarchy. Just because the organization below you (and DHH?) is “flat” doesn’t mean it isn’t hierarchical. It just means you don’t need greater than two levels of hierarchy for 27 people. That’s actually not particularly surprising. Uncommon, perhaps.
Adding managers to the mix sends a strong cultural statement about flatness giving way to hierarchy.
This is the silly bit. There is hierarchy at 37Signals today. It’s just constrained to two levels. Shallow hierarchy isn’t the same as no hierarchy, but that’s how you seem to be presenting it.
JF
on 06 Apr 11Cameron: We’re not perfectly mathematically flat. We’re as flat as possible. Yes, we have two founders. And yes there are a couple of other people here with more responsibilities than other people, but I think most people who’ve worked here, and people on the outside who know how we work, would consider us quite flat, all things considered. Purity isn’t what we’re after.
Cleavon J. Blair
on 06 Apr 11I understand what you’re saying, BUT it sounds like you’re saying management isn’t totally necessary or is bad for an organization. Right now, you guys are able to be as flat as you are because of your size. That pretty much takes away some of the craziness that you get in corporate hierarchies.
Even though you are flat, you still provide leadership for your organization. You help chart a direction (either with your employees or not), work the environment to allow your organization to move in the selected direction, you help your company achieve goals that are set for it. That is what I call leadership and good managers know and understand this.
So, management isn’t bad if they are good leaders. If they are not good, meaning they just carry a title, collect a paycheck, and “stay above the fray”, then that organization is in trouble.
Scott
on 07 Apr 1125 / 2 = 12.5 people per partner. That’s about a normal span of control. Doesn’t seem unusually flat.
Paweł Wrzeszcz
on 07 Apr 11I definitely agree.
With the “vertical” career approach you quickly encounter what is called Peter Principle: People move up the ladder until they reach a position at which they cannot work competently.
-Paweł
Anonymous Coward
on 07 Apr 11Looks coherent.
That’s why DHH is still an employee, and not a manager and a partner.
Grover Saunders
on 07 Apr 11Are you sure it wasn’t about money? You certainly know the situation better than I do (i.e. at all), but I find it’s at the root of these things a lot more often than we like to admit.
Even if you pay “above market” salaries, a customer service salary is generally not something a person with any motivation would be satisfied with for life. I would have loved to do my last job for the rest of my life but there was no way for me to provide the kind of lifestyle I want for my family at a job at that level. But on the other hand, how do you solve that unless your tech support folks make the same amount of money as your lead programmer? Is that the case at 37signals (genuine question)?
I agree that pointless titles just to appease egos is counterproductive, put there are some very real economic issues at play here that we all seem uncomfortable discussing (likely for fear of looking greedy).
Paul Montwill
on 07 Apr 11Too many craftspeople became managers just to be fired a few months later because they didn’t have managements abilities.
Tevi Hirschhorn
on 07 Apr 11Having worked in all types of business environments – small start ups, self employed, small biz, and huge corporations – I can understand and agree with your sentiments that awesome designers should not be forced to do management work; that people great at a craft shouldn’t be forced to pick up work in areas outside their strengths.
I also agree that management can be a huge impediment to efficiency. The fact that there are poor managers or management, however, does not mean that all mid-level management is bad and kills efficiency.
I believe you’ve already identified the problem!! Hire good managers and leaders to run the organization; not designers and developers who’ve been given the job based on their tenure.
It’s a strange practice that I never understood: just because someone’s an expert (assumed to be since they’ve been doing it for a long time – another problem!) doesn’t mean they know how to run things, inspire teams, organize projects, manage employees and deal with clients. Those are all specialized skills and it’s unfair to expect a whip-sharp coder to have to pick them up.
TomK
on 07 Apr 11Ever hear of the principle of 5’s organization? A 1-5 person company is basily completely flat and has a different structure than 6-50, which is different than 51-500, and 501-5000 is very different than 5001-50000, etc etc. Each shift of the decimal point adds a layer of management and roles become more structured/defined.
I worked at a place that went from 500 and the cultural and structural changes that happend in those 2 years was interesting to watch happen.
jameson
on 07 Apr 11Matt Damon’s character, Chief Warrant Officer Miller, in the “Green Zone” illustrates the US military (except for the Air Force which doesn’t have Warrant Officers) solution to the above horizontal vs. vertical career path dilemma, they’ve created two separate career paths. One for managers, one for high level specialist.
The first are the managers, or Commissioned Officers. These are generalist that move from job to job, with a focus on gaining command (management) skills.
The second are, Warrant Officers. They are specialist officers, who are saluted, called sir (or ‘Chief’ if they are a Chief Warrant Officer), paid almost as well as regular Commissioned Officers, yet they are expected to stay focused in one particular specialty their entire career. At times they will command small detachment of specialist, this is not there primary roll. Kind of like a senior designer asked to PM a project.
“Chiefs” are helicopter pilots (Army), intelligence experts, chemical and nuclear weapons experts, logistics, etc… just about any field that benefits from years of technical knowledge and expertise. They progress through there career by always keeping there hand in there craft so to speak.
A few visionary companies such as 3m have created this kind of second, specialist track for their researchers and engineers, realizing that how much of a waste it is to loose hands on talent just for the sake of career advancement.
Ted Pearlman
on 08 Apr 11As the owner of a private company, like 37signals, there really are only two things you need to be concerned with:
1) Does everyone love coming into the office every day (including yourself)? 2) Is the company doing well enough to allow everyone to keep coming into the office?
If the answer to both of those is yes, then the structure – flat, matrix, hierarchical, double-helix – doesn’t matter.
The potential problem with a manager-less organization the size of 37signals is not so much that it can’t function operationally. The problem is that it sometimes can’t function emotionally. The first-line manager role is not about decision-making. It’s about empathizing and caring. It’s about making sure the people you are managing are getting what they need to thrive.
If you are familiar with the Myers-Briggs type indicator, you know that one way of categorizing people is by whether they make decisions to preserve logic (thinking or T) or harmony (feeling or F).
From Wikipedia: “Those who prefer thinking tend to decide things from a more detached standpoint, measuring the decision by what seems reasonable, logical, causal, consistent and matching a given set of rules. Those who prefer feeling tend to come to decisions by associating or empathizing with the situation, looking at it ‘from the inside’ and weighing the situation to achieve, on balance, the greatest harmony, consensus and fit, considering the needs of the people involved.”
Without first-line managers focused on empathy and care (F/Feeling), especially in a technology company like 37signals, where a large majority of the employees and often the leadership can lean hard toward T/Thinking, you can potentially endanger your organization’s human character.
I’m not saying 37signals has this problem, but it’s one of the potential issues with organizations that are “manager-less.”
Ramesh Tiwari
on 08 Apr 11Most 100+ organizations suck (there are exceptions, tho). The trick is to break businesses doing discrete things once you hit that number. That way you can stay small, flat and nimble.
Michael Baun
on 13 Apr 11When I read this article I see an opportunity that was missed in regard to synergy and internal entrepreneurship. This is neither a characteristic of flat or hierarchical organizations. It is characteristic of the competence of stake holders within an organization of promoting and adopting synergy within an organization. Certainly the vision and energy of this employee indicated they were partner level material and the thinking involved about opportunities narrowly framed. Bottom line is that a growth opportunity for your company was missed due to management with limited skills in promoting synergy at this level.
This discussion is closed.