It's long been noticed that public companies tend to be less innovative. There's also a trend in many Agile companies to eschew management. Are private, Agile companies without managers the future?
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Are Managers An Endangered Species?
1. Are Managers An Endangered Species?
If team are self-directing, why do we need managers?
Curtis "Ovid" Poe
http://allaroundtheworld.fr/
Copyright 2014, All Around The WorldApril 3, 2014
2. The Elephant in the Room
• The “unsolved problem” in Agile
• Traditional management doesn’t work
• This problem is often ignored
• So … history
April 3, 2014 Copyright 2014, All Around The World
http://www.flickr.com/photos/hbarrison/7522705738/
3. Hunter-Gatherers
• Follow the leader
• … or die
• Tend to be more egalitarian
• Tend to be more communal
April 3, 2014 Copyright 2014, All Around The World
4. Feudalism Oversimplified
• Local allegiances
• Poor internal communication
– No price signals
– Thus no markets (in the modern sense)
• Command-and-control from king to serf
April 3, 2014 Copyright 2014, All Around The World
13. Why Do Corporations Struggle?
• Why don't big companies innovate more? (Forbes)
• Why big companies can't innovate. (Harvard Business Review)
• Why is innovation so hard for large companies? (Game
Changer)
• Why small companies have the innovation advantage.
(entrepreneur.com)
• The Dark Side of Analyst Coverage: The Case of Innovation.
(Journal of Financial Economics)
April 3, 2014 Copyright 2014, All Around The World
14. Public Companies
• Share prices tied to compensation
• Share prices tied to job security
• Share prices vis-à-vis company takeover
• Share prices as a measure of success
April 3, 2014 Copyright 2014, All Around The World
15. Share Prices
Keeping share prices high
requires minimizing risk
April 3, 2014 Copyright 2014, All Around The World
17. Inefficiencies
• Feudal societies were inefficient
– Local allegiances
– Poor internal communication
• No price signals
• Thus no internal markets (in the modern sense)
– Command-and-control from king to serf
April 3, 2014 Copyright 2014, All Around The World
18. Inefficiencies
• Corporations are inefficient
– Local allegiances
– Poor internal communication
• No price signals
• Thus no internal markets (in the modern sense)
– Command-and-control from CEO to grunt
April 3, 2014 Copyright 2014, All Around The World
19. April 3, 2014 Copyright 2014, All Around The World
If we are willing to die for Democracy and Capitalism
… why do we forbid it in our corporations?
20. People (a.k.a. “resources”)
• Little personal incentive
• Groupthink
• Risk averse/hide-and-seek
• Blame avoidance
• Large projects bring prestige
April 3, 2014 Copyright 2014, All Around The World
21. Why Do Feudal Corporations Exist?
April 3, 2014 Copyright 2014, All Around The World
22. Why Do Feudal Corporations Exist?
• Brand recognition
• Mature products
• Financial reserves
April 3, 2014 Copyright 2014, All Around The World
23. How Do Large Corporations Cope?
• BBC Blue Room
• Funding startups
• Litigation instead of innovation (“Hello, RIAA”)
• Going Agile
April 3, 2014 Copyright 2014, All Around The World
25. 37signals
• Basecamp, Highrise, Campfire, Rails
• 38 employees
• Self-organizing teams
• Reluctantly trying “middle manager” role
April 3, 2014 Copyright 2014, All Around The World
26. Github
• Github!
• 200+ employees
• Self-organizing teams
• Reluctantly trying “middle manager” role
April 3, 2014 Copyright 2014, All Around The World
28. Booking.com
Copyright 2014, All Around The World
Goal Sell more hotel rooms
Strategy An Agile company
Tactics P.O.P. (ish)
April 3, 2014
29. Booking.com
• Third largest e-commerce site in the world
• 200+ IT staff
• Thousands of employees
• No project managers
April 3, 2014 Copyright 2014, All Around The World
31. Booking.com Strengths
• Relatively flat hierarchy
• Excellent customer service
• A/B testing experts
• Strong continuous deployment
• Focus on customers, not code
April 3, 2014 Copyright 2014, All Around The World
32. Booking.com Challenges
• Extensive technical debt
• Lack of Perl developers
• Dutch tax law changes
• Poor US market penetration (*)
• Focus on small projects
April 3, 2014 Copyright 2014, All Around The World
34. VALVE
• Half-Life Series
• Counter-Strike Series
• Team Fortress Series
• Portal Series
• Left 4 Dead Series
• Steam
April 3, 2014 Copyright 2014, All Around The World
35. VALVE
• 250+ people
• Better profits/employee than Google or Apple
• The platonic ideal of Agile?
• What are corporations for?
April 3, 2014 Copyright 2014, All Around The World
36. VALVE
• Entirely self-funded
• Own their intellectual property
• “Hiring well is the most important thing in the
universe. Nothing else comes close.”
April 3, 2014 Copyright 2014, All Around The World
37. VALVE
• No managers
• None
• Really
April 3, 2014 Copyright 2014, All Around The World
38. VALVE
• No job titles, either (except on business cards)
• Everybody is an expert
• 100% Time
• All desks have wheels
• Evaluation by your peers
April 3, 2014 Copyright 2014, All Around The World
39. VALVE Struggles
• “Valve Time”
• Mentoring
• Disseminating information internally
• Long-term predictions
• High barrier to entry
April 3, 2014 Copyright 2014, All Around The World
40. VALVE (Alleged) Struggles
• Not always as flat as they appear
• Excess cash can kill incentives
• Windows lock-in
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42. Ricardo Semler
April 3, 2014 Copyright 2014, All Around The World
•http://en.wikipedia.org/wiki/Ricardo_semler
•http://www.semco.com.br/en/
• 27% average annual growth for 25 years
•http://www.slideshare.net/camilletaper/semco
• "Leading by Omission" speech (Google it)
43. Other “Managerless” Comapanies
• Morningstar, Inc.
• Gore-Tex ®
• Zappos.com
• Medium.com
• … and many more
April 3, 2014 Copyright 2014, All Around The World
44. Process Versus Product
• Products over process
• Managers are often “Process”
• Hence, minimizing management
April 3, 2014 Copyright 2014, All Around The World
45. Managerless companies
• Generally agile/lean
• Usually tech companies
• Almost always privately funded
April 3, 2014 Copyright 2014, All Around The World
46. Open Questions
• Can “managerless” succeed long-term?
• What social changes might this entail?
• Where are managers required?
• Can public companies effectively compete?
April 3, 2014 Copyright 2014, All Around The World
47. Summary
• Corporate management resembles feudalism
• Agile teams are self-directing
• Many companies are eliminating management
April 3, 2014 Copyright 2014, All Around The World
Though generally more egalitarian than today’s societies
Local allegiance. No price signals.
You can leave the company. Room for advancement. Incentives and motivations are different.(Watch Office Space again)
You can leave the company. Room for advancement. Incentives and motivations are different.
You can leave the company. Room for advancement. Incentives and motivations are different.
You can leave the company. Room for advancement. Incentives and motivations are different.
You can leave the company. Room for advancement. Incentives and motivations are different.
I tiny team dedicated to innovation, while the rest of the company remains static
Dark side of analyst coverage: study demonstrating the more financial analysts cover your company, the less innovative you are
Obviously, private companies have more freedom (ValvE)
Large companies often do large projects which means that blame avoidance is a critical strategy to keep your job (tied to ignoring sunk costs)http://www.ft.com/cms/s/0/863409bc-5fca-11e0-a718-00144feab49a.htmlHide-and-seek is easier when the management graph is complex
Oracle atRentrak
Some corps fund start-up "incubators" to tap into startup innovationsIf you can’t stop your competitors, crush them.
Kawasaki: “Beat Yamaha”. Kennedy: “Go to the moon”.How many people can succinctly describe cPanel’s mission statement?