The process chart for healthcare.gov

21st CenturyWays of Working

Why we can – and must –fix Corporate America.

We’re at the precipice of a massive modernization for how large, complex organizations work. Instead of centralized authority and systemic alignment, startups are choosing a different path as they grow their headcount from 10 to 10,000.

It pains me to walk through the cubicle-ridden halls of large corporations. Employees wallow in 8-hours of meetings. They’re stuck replying to hundreds of emails. Managers manage managers. No one seems to be doing any work.

And everyone seems bafflingly content. I recently learned about a massive, management-consultant-led re-organization of a Fortune 500, decades-old company. Their actual design principles:

• Centralized authority, pushed to the highest-level possible in the organization.
• Agendas for strategy discussion must be sent 12 weeks in advance.
• A 12-month timeline for innovation-funding.
• Prescriptive responsibilities were written for hundreds of positions.

These principles are profoundly outdated. They use the same approach to org design from decades ago, pre-fucking-Internet, invented by a generation who communicated via paper memos.

We have an industry of consultants who are actively perpetuating everything that make big companies terrible places to work – ultimately accelerating BigCo’s death. A-player talent will never work under these conditions – they’ll continue to go to small companies, startups, and tech giants.

20 years ago, these principles made sense. The only way to move a 100,000-person organizations forward: alignment. Org charts, centralized authority, bureaucracy, and hierarchy – it aligned everyone with management’s strategy.

In big organizations, the trade-off for alignment has always been autonomy and speed. Historically, startups and small firms start with both, but fall victim to centralized authority as they scale.

What’s interesting is that the current breed of tech firms are challenging this theory, growing from startup to huge company while keeping speed and autonomy alive. Without any inertia to dictate centralized authority, places like Google, Facebook, Uber, Spotify, Valve, Tesla, Amazon, etc. are experimenting with new ways of working.

What I believe is happening:

1. Osmosis from agile development, open source communities. Tech firms are applying the development principles from their startup stage to their grown-up corporate culture. E.g., working software over comprehensive documentation, responding to change over following a plan. That is, developers have a damn-good blueprint for governing teams, not just shipping code. Spotify or Valve are great examples.
2. Tools enable small, startup-like pods to operate at-scale. It’s never been easier to make a company-wide two-pizza rule work (i.e., teams are small enough to be fed by two pizzas). Tools such as Slack, Google Docs, Dropbox, and Trello allow everyone to work in public. Want to know what team X is doing? Look at their Trello or Slack. These tools allow a network of small units to operate with cohesion, which would have been chaos, pre-Internet.
3. We make digital shit. Our output is bits instead of atoms. If you look at Undercurrent’s big corporate clients (e.g., GE, Amex, Pepsico, Estee Lauder) the result of their effort is increasingly a code commit. Consequently, we can minimize dependencies and allow a network of small teams to have the autonomy to ship, without consulting others. And since it’s so easy to commit, our bias is towards testing and learning, not spending months to decide on the perfect decision.
4. The next generation is better at working this way. The Seniors in college are not pre-disposed to meetings and email. They’re instant messaging/AIM-natives, who are happy to adopt Slack. They’re Google Docs users who are depressed by Powerpoint culture. They’re debilitated by red-tape and group consensus.

This is a huge opportunity: create the “stack” for large companies to manage a network of small, autonomous teams. Most startups are building for organizations smaller than 100 – imagine the Hipchat or Slack that supports 100,000 people. Imagine impacting the lives of millions of employees in Corporate America.