Issue 153 No Middle Managers August 29, 2013

I'll be gone tomorrow and thus be unable to post..as such I will see you all Monday. Enjoy the article and have a great weekend.

What if there was no actual management in a corporation? Would it fail? Well that depends on your business model. Here is how it works.

What is it?: Well the companies that embrace the idea of no middle managers are unique. They do not need people to tell them to do their job. Not only do they do their job, they are already highly motivated and self regulating. And that is actually how the model works. In order for there to be no middle managers in a corporation a company needs people hire only self motivated people who are comfortable with a boss less environment. That environment is also purposely built to work. As such, companies like GitHub (a five year old collaborative software company in San Francisco) or 37signals (another software firm) have it so that its employees may hop on a project in any capacity and then switch roles as needed. Ideas are shared informally and may also go out the door without approval of a lead manager. Sure there is top management, but that is also somewhat informal as well. It does have some advantages as it eliminates pointless titles and bureaucratic bloat in a business which saves money. It also allows some members to work at home as well (especially as software can be made anywhere you have a decent enough computer to use {these are tech companies if you have not noticed yet}). Overall it is based around the same principle as one of 37signals mottos "hire managers of one."

Managers do have there advantages: Professor Ethan Mollick of the University of Pennsylvania's Whaton school looker at 395 companies in the video game industry using 12 years worth of data It found that despite all other factors, middle managers accounted for "22.3% of the performance differences among companies, more than three times as much as the game designers who invent story lines and characters." Basically, middle managers help the bottom and the top of a business communicate which is essential.

Compromise: It has been recognized by companies like Github with its now 200 plus employees that managers are in fact needed in a certain capacity and as such has installed some over site. But they want to maintain freedom and keep out the hierarchy. So the people there avoid the term manager (this goes for the top positions too). Tom Preston-Werner the co-founder and head of Github (what he describes as in name only) prefers words like leader, or the companies acronym "PRP" primarily responsible person." They still allow ideas and decision to go public without approval though as they still hire self regulated people. Some businesses rotate managerial roles amongst the staff where they would keep track of group performance and "ensuring goals are met." The manager of the month would also handle customer-support requests (as this was the customer support section of the business). As such while their smaller counterparts may still be able to get buy without managers, the larger companies are finding creative solutions to maintain the speed and efficiency of the no manager business model (a staffer can potentially overrule his boss on a plan in certain instances in this model). Speed is probably the best advantage this model gives with respect to decision making.

Conclusion: This article comes from The Wall Street Journal "Some tech Firms Ask: Who Needs Managers? Among Smaller Companies, Disdain for Hierarchy Collides With Need for Oversight" by Rachel Emma Silverman. And I decided to show this model (or models) to you all as an alternative some businesses are trying. It seems to work mainly in tech and programming companies as that is where it is suggested that this business model is often used. It is important to note that this model will not work with employees who need that manager looking over their shoulder to make sure they are doing their job. So if you do try this model, be careful to only hire the best and only for roles that they are not only suited for, but who are capable of being their own boss. Good luck in all your endeavors everyone.