Deconstructing Corporate Structure

I’m the CTO and cofounder of a 4 person startup. I think a lot about how our organization can look if we ever have 400 people. I think the way businesses are structured and run needs to evolve, and this is where I muse about one of the ways in which that might be done.

One of the fundamental building blocks of today’s business is the power structure. Employees go to work and report to a boss. That boss hired them, and that boss can fire them.

Recently I started wondering what would a company look like if we did away with that power dynamic? Does an employee really need to “report” to anyone at all? Could we do away with the “boss” altogether? What if we could slim down an organization to the roles and relationships that truly mattered the most to getting things done?

Ultimately, the goal of a corporate structure is to organize a body of people to work toward a single mission; produce a valuable product, improve on it, and solve customer problems. In the most perfect of worlds, you could get a hundred fully self-motivated people to come to work and passionately do their part and coordinate together to achieve that mission.

In reality, power structures have evolved as a substitute for motivation and trust. If it weren’t for the knowledge that a single person could fire them, an employee might choose to not come into work one day. On the other hand, an employee might get super passionate about a particular problem they see and spend months working on it if it weren’t for that one person who could reprimand, or dismiss them if they don’t agree to align their efforts with those of the team and company.

Then there’s the carrots on a stick that the traditional corporate structure provides. Be a valuable asset to the company, and you’ll be promoted to the next level. Perform well and management may grant you a reward.

But carrots on a stick and threats of punishment have proven to be terrible forms of motivation for knowledge workers today. People want more from their job; satisfaction that they can make a difference, and growth in their knowledge and skills.

In traditional (one might say antiquated) companies, the boss had a very clear role:

  • They hired an employee
  • They told them what to do and how and when to do it
  • They evaluated the performance of the employee
  • They could promote the employee
  • They could fire the employee

But how much of this really requires a single managerial role?

  • Hiring in many companies today is usually done by a team of interviewers.
  • Managers are no longer encouraged to tell an employee what to do and how to do it, but facilitate the employee’s job by removing obstacles.
  • Many companies use a “360” format for doing performance reviews, gathering feedback from all reports, peers, managers, and stakeholders an employee works with.
  • Promotions are usually not the call of a single person but need the go-ahead from higher managers and HR.
  • An employee’s dismissal will usually be initiated by HR or other forces in the business out of the manager’s control.

The main purpose of a manager then is just to be a point person in each of these things. But still, when someone is your boss, there’s a power dynamic there that I believe is actually damaging to the higher mission of the business.

  • The employee is less likely to be fully candid about challenges and issues with someone they perceive as more powerful (i.e. can fire them).
  • They’re less likely to discuss the same concerns with a manager as they would with their peers.
  • Employees are more likely spin things in a way that doesn’t reflect negatively on themselves.
  • Managers may feel the need to hide certain facts from an employee to “protect” them.
  • As a result, silos develop between the tiers of leaders and employees and you end up with a disconnect between different levels of the organization, each of which has a different view of how things are running, what problems are important, and what needs to be done.

Let’s imagine that we got rid of the role of a “boss”, but in its place we had roles that solved the actual problems that are important: roles like leader, mentor, expert, evangelist, and counselor.

  • A business needs leaders who can motivate, communicate strategy well, manage stakeholder relations, and organize efforts between individuals and teams. They need to be able to sell an idea to someone and gain followers. They don’t need the ability to fire people or have lots of direct reports in order to be seen and influential in the organization. In many businesses today, product managers already work this way.
  • A business also needs experts who are highly knowledgeable about specific areas of the business — whether it’s technology, design, or customer relations. And the business also needs some of those experts to be mentors — to help junior and mid level employees get better at their craft and be a role model for them. Many tech companies today have already created career paths for their engineers to become either managers or technical specialists.
  • Teams and individuals need evangelists — someone who can sell the work that each employee is doing and make sure their value is known. Someone who can go to bat and vouch for the work that someone is doing. This doesn’t need to be a distinct role, but someone, either a leader or mentor, should take this up too.
  • And teams also need someone who can mediate disputes, address performance concerns tactfully, and help understand any issues an employee is going through and work with them to keep them on a healthy career path.

None of these roles need to come with the baggage of the power dynamic that comes with a manager-employee relationship, yet they ensure that everyone is happy, productive, and working on the right things. These roles also don’t need to be split across separate people — a leader should also be a mentor and an evangelist all at once.

In the academic world, students don’t have a manager but they are still motivated to succeed. They have professors to mentor them, lead them, and evangelize their work; they have advisors who help them plan their goals; and the school has counselors to work with students falling behind.

In a corporate structure modeled this way an employee might choose who their “mentor” is — maybe it’s a leader, maybe an area expert who can then help that employee grow their career along a specific track. That mentor could be their point person in the organization — but rather than being a “boss”, they would be a trusted advisor. That advisor would help to set the employee’s goals and milestones with respect to business needs and be active in helping them move forward.

I think there’s a strong case to be made that removing the power dynamic in a corporate environment would help everyone focus on what really mattered — helping each other learn, building great products, and making customers happier. While I treat all of this as just a thought experiment, I think it’s a good starting point for a discussion & debate about how corporate cultures can be reimagined to deliver on their primary mission.

There are certainly other models of corporate organization gaining traction out there, such as holacracy. While I think it’s a great step in the evolution of organizations, I think some of the core aspects of holacracy are already being done without it (i.e. avoiding micromanagement and decentralizing decision making).

My thought behind this is: aim toward simplicity. Build in the roles and relationships you need for your business to run productively, and let those roles and relationships be defined by the actual problems being faced.

The whole power dynamic that exists today in the corporate world is itself solely responsible for its own propagation into every company out there; every leader who moves from one company to another implements the organization they know and are comfortable with. It would take a true leader to shake that up.