Are Managers An Endangered Species?

If team are self-directing, why do we need managers?

Curtis "Ovid" Poehttp://allaroundtheworld.fr/

The Elephant in the Room

• The “unsolved problem” in Agile• Traditional management doesn’t work• This problem is often ignored• So … history

http://www.flickr.com/photos/hbarrison/7522705738/

Hunter-Gatherers

• Follow the leader• … or die• Tend to be more egalitarian• Tend to be more communal

Feudalism Oversimplified

• Local allegiances• Poor internal communication– No price signals– Thus no markets (in the modern sense)

• Command-and-control from king to serf

The Feudal Era

The Corporate Era

Wait, what?

Startup

Growth

Mature

Senile

Progressive

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)

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

Share Prices

Keeping share prices highrequires minimizing risk

Share Prices

Minimizing riskmeans

minimizing innovation

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

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

If we are willing to die for Democracy and Capitalism… why do we forbid it in our corporations?

People (a.k.a. “resources”)

• Little personal incentive• Groupthink• Risk averse/hide-and-seek• Blame avoidance• Large projects bring prestige

Why Do Feudal Corporations Exist?

• Brand recognition• Mature products• Financial reserves

How Do Large Corporations Cope?

• BBC Blue Room• Funding startups• Litigation instead of innovation (“Hello, RIAA”)• Going Agile

Existing Agile Corporations

37signals

• Basecamp, Highrise, Campfire, Rails• 38 employees• Self-organizing teams• Reluctantly trying “middle manager” role

Github

• Github!• 200+ employees• Self-organizing teams• Reluctantly trying “middle manager” role

Priceline

(profits courtesy Booking.com)

Booking.com

Goal Sell more hotel roomsStrategy An Agile companyTactics P.O.P. (ish)

Booking.com

• Third largest e-commerce site in the world• 200+ IT staff• Thousands of employees• No project managers

Priceline Record Growth

Booking.com Strengths

• Relatively flat hierarchy• Excellent customer service• A/B testing experts• Strong continuous deployment• Focus on customers, not code

Booking.com Challenges

• Extensive technical debt• Lack of Perl developers• Dutch tax law changes• Poor US market penetration (*)• Focus on small projects

• Half-Life Series• Counter-Strike Series• Team Fortress Series• Portal Series• Left 4 Dead Series• Steam

• 250+ people• Better profits/employee than Google or Apple• The platonic ideal of Agile?• What are corporations for?

• Entirely self-funded• Own their intellectual property• “Hiring well is the most important thing in the

universe. Nothing else comes close.”

• No managers• None• Really

• No job titles, either (except on business cards)• Everybody is an expert• 100% Time• All desks have wheels• Evaluation by your peers

VALVE Struggles

• “Valve Time”• Mentoring• Disseminating information internally• Long-term predictions• High barrier to entry

VALVE (Alleged) Struggles

• Not always as flat as they appear• Excess cash can kill incentives• Windows lock-in

New Employee Handbook

VALVEhttp://www.valvesoftware.com/company/Valve_Handbook_LowRes.pdf

Ricardo Semler• 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)

Other “Managerless” Comapanies

• Morningstar, Inc.• Gore-Tex ®• Zappos.com• Medium.com• … and many more

Process Versus Product

• Products over process• Managers are often “Process”• Hence, minimizing management

Managerless companies

• Generally agile/lean• Usually tech companies• Almost always privately funded

Open Questions

• Can “managerless” succeed long-term?• What social changes might this entail?• Where are managers required?• Can public companies effectively compete?

Summary

• Corporate management resembles feudalism• Agile teams are self-directing• Many companies are eliminating management

Questions?

?http://www.allaroundtheworld.fr/

Are Managers An Endangered Species?

Business

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