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The end of bosses

     

Published on October 14, 2013
in Business, Knowledge by

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The most innovative tech companies today aren’t just inventing new technology, they’re also building totally new kinds of companies. Mature startups like Valve and Github and smaller up-and-comers like Treehouse and Medium have done away with managers who boss people around and expect servile compliance.

Instead, these companies have a flat organizational structure of makers without a middle-management layer. Individuals manage themselves and each other to build awesome things through peer management. These are companies without bosses.

How does anything get done?

I admit that I was extremely skeptical about bossless companies when I first heard about them. But as I worked with and studied innovative companies like Zappos and up-and-comers like Wistia more closely, I saw how their focus on bottom-up company culture drove productivity and motivation without hierarchy and authority.

What’s at stake can’t be understated. As New York Times bestselling author on the future of work, Dan Pink, told me, the most disruptive force in enterprise organization that’s happening today is that “talented people need organizations less than organizations need talented people.” What that means is that to attract and retain the best talent, you have to create an environment rich in autonomy–because talented people don’t like to be told what to do.

In place of hierarchy, authority and control, bossless companies run on accountability, autonomy and trust. People who are stuck on the concept of the traditional hierarchical structure as the gold standard are often buying into a system of a lack of trust, which drives the need to control. Instead, peer management works by entrusting and empowering individuals to control themselves.

How bossless companies do it

1. Information for everyone, not just bosses

The essential ingredients of peer management like trust, accountability, peer feedback, and decision-making autonomy rely on transparency of information. The problem with old school, hierarchical companies is that managers end up operating as obstacles for spreading information freely within a company. And this only becomes a bigger problem as your company grows.

Companies like Foursquare and Buzzfeed use a system called Google snippets, which is an internal database where every employee writes down what they’ve been getting done — as pioneered by Google. In other companies, you may only get the story of what’s happening in the company through your boss, and they have the power to shape the narrative. In companies that use Google snippets, everyone knows what everyone gets done so that you aren’t beholden to your manager for information.

Social media marketing startup Buffer takes information transparency to an extreme. They use iDoneThis to share snippets of what they get done every day, but on top of that, everyone knows everyone’s salary, what everyone is reading, and even how much everyone on the team is sleeping.

2. Peer-driven recognition and accountability

In peer management settings, individuals steer themselves and others, and with that power comes great responsibility to be accountable and take on jobs formerly reserved for managers.

Bossless companies foster that culture of peer responsibility through tools and processes, such as periodic peer-driven 360 reviews and even peer compensation. At Shopify, employees created a system called Unicorn, where they positively emphasize accomplishments at work by giving public kudos for a job well done. Moreover, peer-driven bonuses come out of the kudos you receive on Unicorn. This creates a culture where employees congratulate and celebrate each others’ work — they don’t have to rely on a manager to do it.

3. Strengthen your culture with every new hire

Fit is paramount in peer management because having a bottom-up culture means that it’s all about the people.

Stripe applies what they call the Sunday test: “If this person was alone in the office on a Sunday, would that make you more likely to come in just to hang out with him? We only make a hire if the answer is a strong yes.” Having taken such effort to build a team they believe in, Stripe also allows everyone a veto for candidates.

Innovation and information have trouble traveling through hierarchies and managers, and so the most exciting companies today have chosen innovation over predictability. As former Intel CEO Andy Grove put it, “Let chaos reign, then rein in chaos.”

With peer management, accountability isn’t to a boss or supervisor, it’s to each other, your team, your company, your customers, and yourself. That’s way more motivating than being told what to do. Using peer management to build a culture that enables motivation, autonomy, and purpose makes work fulfilling and joyful, and yields innovative results.

  • Graybeard

    “If this person was alone in the office on a Sunday, would that make you more likely to come in just to hang out with him? We only make a hire if the answer is a strong yes.”
    So does that mean you only hire those that are like you? Thus diversity in age, sex, religion, sports interest probably does not exist there.

    • Touche

      on Sunday’s do you you only ever hang out with people that are like you?

      • http://www.havn.co/ Nico Hämäläinen

        I don’t hang out with anyone on sundays. :(

      • medub

        I think his general point is that the concept of a person being in the office on Sunday already selects for certain subsections of the population and implicitly discriminates against people with family/religious/social obligations.

        • Simple

          You’re misreading it. The test isn’t “Will this person hang out in the office on Sunday?”. The test is “If this person was alone in the office on a Sunday, would that make you more likely to come in just to hang out with him?”. Those are completely different questions.

          The one they’re using does not discriminate against people who would never show up on a Sunday.

    • http://www.themusingsofthebigredcar.com/ JLM

      .
      Me, I want to hang with the guys who are in church and have balanced lives on Sundays.

      Balance in everything wins the race and always has.

      JLM
      .

    • http://gkn.me.uk Greg K Nicholson

      Evidently, they only want to hire men. Not cool.

  • http://teamtreehouse.com/ Ryan Carson

    Thanks for mentioning Treehouse. Have you seen the big series I’m doing on our #NoManager structure? I’m sharing all the nitty-gritty behind it. What works, what doesn’t and how we actually operate every day: http://ryancarson.com/post/61562761297/no-managers-why-we-removed-bosses-at-treehouse

  • Josh

    Awesome article! Thanks for posting. Those are all good companies you’ve mentioned. Ryan Carson’s series on flat management is well worth reading!

    The sunday-in-the-office comment strikes me as merely saying “Would you be friends with this person to such a degree that you would put off alternative leisure activities to spend time with them?”

    It’s “discriminatory” in the same way that most of what we do every day can be categorized as discriminatory.
    We’re friends with only certain people, date or marry certain people, are
    related only to certain people, patronize certain businesses, and work
    (or don’t work) for other businesses. Every single act is
    “discriminatory” in that it (voluntarily) limits our options.

    And… unless Graybeard is friends only with people that meet specific criteria in age, sex, religion, and sports interests…. this criteria, if applied to his own life, wouldn’t limit him at all.

  • http://www.theroadtosiliconvalley.com/ Ernest Semerda

    Great article! Thank you.

    Unfortunately there are still many old school folks that don’t want to let go of old fear industrial structured practices.. and realize that with tech not only the world but how we work is changing.

    I think Daniel Pink nailed it with “talented people need organizations less than organizations need talented people.” – and this will be the catalyst to bring talent back into tribal groups (future companies). Those that wont embrace the new world will struggle and fade with time.

    • http://www.themusingsofthebigredcar.com/ JLM

      .
      Old wine, new bottles. Partnerships of every stripe have long since embraced such a collegial and peer driven flat organization.

      Go look at an Old English partners’ desk. It screams out flat organization, 360 degree communication and collective decision-making.

      Partnerships have dominated the real estate business (driven in part by the Tax Code, thank you very much), law, merchant banking and other professional services firms.

      Read about how Gen Washington used to conduct operational planning sessions at which he would invite the unit commanders of those units which would bear the brunt of the fighting or the point of the spear as well as local citizens who knew the local terrain.

      While there are certainly a lot of hierarchical and authoritarian organizations out there, there have always been ones that have also adopted everything that is espoused as “discovery” in this article.

      JLM
      .

  • http://www.themusingsofthebigredcar.com/ JLM

    .
    Every generation is tempted to believe they invented sex and………..business. Alas, it is not true.

    The notion of flat organizations is old wine in new bottles.

    Special Forces units — part of a very disciplined seemingly hierarchical driven organization theme — are a perfect example of flat organizations which are not only good but folks are dying to join.

    In an A Team, the leader and the exec are typically the least accomplished members of the team while the sergeants are typically so experienced in their own and other jobs as to be literally the best of breed.

    The Team functions as one coherent organism with the ability to punch way above their collective weight. When the Team brief — op order — is given every member of the Team is present and read into the situation.

    This is how excellence is achieved.

    No officer in an A Team has to raise their voice because the Team and Team members know their jobs and battle drill so well.

    It is amusing to see young businessmen discover sex and organizational dynamics as if they were literally explorers.

    It is not so. This generation and mine — neither of them invented sex or business.

    JLM
    .

  • Steve

    Boss less in a smaller growing concern is great. At some point complexity and the need to lead with clarity require structure which should not equate to hierarchy or old thinking. It is an operating reality. Flat Orgs have many challenges when you add multiple product and location challenges. Trust and the leaders who influence through the right blend of behaviors will always trump the structure flavor of the moment. I’ve have lived in all facets. I love your idealism but when you grow add in some pragmatism.