Number of levels in the hierarchy seems like a bad way to determine this. I've worked in a company with 500 employees (and three levels) and lots of bureaucracy and a company with 100,000+ employees (~6-8 levels depending on your division) with relatively little bureaucracy (yes, on occasion, I ran in to bad cases of it, but it didn't effect my day-to-day work).
It's simply not possible to have 100,000+ employees and less than 6 levels, unless you have managers with tons of employees. But it is possible to be in a division of a large company where your group has relative autonomy and are empowered to do what they need to do. In my case, there were about 20 of us inside of a larger 500 person group. 95% of decisions were made within the 20 person group (obviously this is an approximation). Another 4% were made at the 500 person group management level. 1% were made by company-wide executives. In other words, my boss was accountable for most of what we did. On occasion, he's need to go to his boss for something. And very rarely, his boss would need to escalate to higher ups (where there were another 3 or 4 levels to the CEO). This company was very well run, but there are much smaller companies with fewer levels in the hierarchy and lots more bureaucracy.
There is also a “toxic valley”, where an org has outgrown what can be managed by informal social mechanisms, but has not (yet) had the time/reached the size for professional practices.
I always liked this essay about "The Null Process" [1] which touches on some of the same topics:
>> Our fear of "unnecessary process" has created workplaces with something worse than bad process: no process. I call these types of processes "null processes," and they are rampant at startups and technology companies.
> Number of levels in the hierarchy seems like a bad way to determine this.
It's incomplete as a measure of the problem, but it's definitely a valid measure of a key risk factor.
The span of control (# of direct reports) of each supervisor in a direct chain of command from the employee to the top-level manager is also a measure (higher is worse), as is the “span of reporting” (the number of supervisors[1] to which each employee reports) from the employee up to the top-level manager (again, more is worse, and there is a big jump from the condition where the maximum is 1 anywhere in the chain and the condition where the maximum is > 1.)
[1] this includes both “people” and “functional” managers where those roles are distinguished, as well as people that aren't characterized as having reporting relationships but from whom the employee is expected in practice to take direct direction.
> Note that those outside the company, such as investors or regulators, seem like they should effectively count as a level under some circumstances, but not under others.
I think there's obviously some room to fudge with what the exact boundaries of the "organization" are. So yeah, maybe a sufficiently-empowered department head functions more like a CEO/boss.
What I instinctively interpreted that as is "branching factor". i.e. the number of subjects at each management node.
Tall companies have many middle managers (middlemen) but small teams with no slack. Flat companies have large groups and infrequent interaction with leads or managers. Perhaps more slack, perhaps more ambiguity and less direction. Both can be unhealthy.
the 6 layers isn't really true, in part due to line managers can manage 15-30 people. If everyone is doing the same job that is fairly rote a single line manager can handle a lot of people, reducing layers. Additional CEOs tend to have a lot of direct reports.
Sample Example
(0 Layer) CEO --> 10 Direct reports is typical for large publicly traded companies.
> With only one level, there’s nothing to worry about. With only two levels, a boss and those who report to the boss, the boss has skin in the game, no boss causing problems for them, and not enough reason to reward bad outcomes. With three levels, there are middle managers in the second layer, so one should be wary.
Based on this wording, it seems like the CEO and the people under the line managers count as levels (levels though maybe not levels of middle management). By that reasoning, this structure would indeed be 6 layers.
In reality, it varies by division if you are in a large company. If you join at the bottom of the legal department at Google, you probably have fewer layers above you than if you are a junior dev working on android.
> the 6 layers isn't really true, in part due to line managers can manage 15-30 people
Yes it is, IMO; any layer above line managers over nonprofessional staff should have a span of control not greater than about 3-5 subordinate managers with full-depth (1 level less than the manager) organizations and a similar number of supporting staff that either have no reports of their own or supervise organizations about 2-3 levels less deep than the manager above them. Yes, lots of real organizations have broader spans of control, but lots of real organizations also are what the author describes as “immoral mazes”.
There may be situations where 15-30 direct reports is workable, but that is a very large number of reports. Academic studies generally settle on a maximum effective team size around seven, give or take a few[1]. In my own experience, I saw diminishing returns and reduced satisfaction in my management performance after ten direct reports. These issues resolved with a restructuring.
But you don't have to take academic studies or anecdotes to heart. Some back-of-the-envelope calculations suggest there are severe challenges to effectively and healthfully directly manage 30 people. Take the typical 40 hour week[2]. With 30 direct reports, that gives a maximum of 40/30 = 80 minutes/week to devote to each individual employee. If the manager does a weekly or bi-weekly 30 one-on-one, that leaves about an hour on average to deal with any issues.
Of course, not every employee has high priorities issues at the same time. But we've only considered the individual, one-on-one work of the manager. There is also the team-wide and cross-team work. And, it turns out, team size also dramatically increases the time and effort these other facets take.
Consider the typical daily stand-up (blech), used to keep the team aligned. If the manager allots (and strictly enforces) five minute slots per team member, that meeting still takes 2.5 hours. People won't be happy with that, and it will cut into the managers limited time to actually make progress on individual and team issues. Even if the manager splits the meeting (to spare team members for a super long meeting), the manager needs to attend each one to stay abreast of the big picture.
Likewise, we presume that if a team has 30 reports, it's because what they are working on is of critical business importance. There are more demands from sibling teams in the same org, more budget and staffer reviews with higher-ups, more hours spent with HR and recruiting. (Alternatively, the manager is empire-building. But that doesn't really help the calculation. The time that the manager would've spent on delivering business value is instead spent on politics.)
Even if you think you can keep all these balls in the air, it's hard to not conclude there are incredibly tight windows here. And the whole thing is very fragile. If you fail to identify, understand, and address a critical issue, it can quickly infect other team members.
[2] I know. We often work more than that. The exact number doesn't really change the story, especially since we're talking about retaining our physical and mental health.
Just because someone is a direct report doesn't mean they have to be in the same scrum team.
I worked at a company where all the engineers reported to the CTO, but we had a number of different scrum teams that worked independently from each other.
> It's simply not possible to have 100,000+ employees and less than 6 levels, unless you have managers with tons of employees
Math does not check out. 5 levels for 100k employees results in 10 reports per manager (assuming a top level with 10 people rather than 1, which is approximately correct given CEO/CTO/CIO/etc/etc/etc). Maybe 10 qualifies as 'tons' for you? Going down to 4 levels gives 18 reports per manager, which feels a little closer to 'tons'.
I think we agree in principle, just different understanding of how to count levels. Based on the article, a company with a boss and one employee is two levels ("With only two levels, a boss and those who report to the boss..."). So for 100,000 people, with average 10 employees per manager:
1 Big Boss (Level 1)
10 (Level 2)
100 (Level 3)
1000 (Level 4)
10000 (Level 5)
100000 (Level 6)
That's six levels. In practice, some people will have more than 10 and some less, but unless the people under you are doing menial work, I think 10 is probably middle of the road.
You have level 5 managers managing 10 each, and you have level 4 managers managing 10 teams each? That stops checking out. The higher you go the more disciplined you have to be about grouping relating teams under the same umbrella for efficient execution.
In fact, the levels don't matter as much as the autonomy at each level. The more autonomy, provided that the right people are hired and are focused on the goal, makes it better and less managerial burden going up the chain.
> Math does not check out. 5 levels for 100k employees results in 10 reports per manager
It results in 10 reports with full-depth organizations per manager, which is a lot at any level except line managers.
Except for line managers of nonprofessional staff, 5 full-depth subordinate organizations and 5 support staff or shallow (~2-3 levels less than a full-depth subordinate organizations) is about the limit of what is reasonable. A full-depth span of control at 10 at each level , with 6 levels, is pretty certain to be an “immoral maze”.
10 direct reports on average is a lot. It might be okay at the highest levels where you mostly make strategic decisions, but it's too much for a manager that's involved in day to day processes and decisions.
Second line managers with 10 first line managers is pretty unmanageable. Similar going up. In most places I’ve seen, a second line manager will only have anywhere from 3-5 teams and maybe some ICs.
In my experience, if you are stuck in a maze, you need your manager to show you the way through the maze. They'll only have enough time to show you the way if the number of reports is bounded.
would be interesting to see some AI-assisted version of holacracy replace middle managers -- you'd still have low-level team leads and high-level strategy people, but a lot of the informational glue and project updates could be taken over by machines
you'd need to go into a project like that (1) believing that middle managers eventually suppress more value than they add and (2) you're okay operating in a random mix of cowboy team leads and inconsistent organizational glue between them.
you'd set broad parameters like 'don't over-duplicate work', 'pick projects that are more or less on-topic with our company', 'get third party verification of plans and estimates'. Firing could be some mix of 'future needs', performance and random. Moving teams would happen based on an internal market of skills & personnel budget.
I've been really interested to watch what Holacracy actually does (sans AI) in healthy, agile companies. A lot of the management overhead gets cut (while keeping functional management of the company, though a lot of it becomes process rather than people), and a lot of the projected issues are just things someone can propose a solution for and get it enacted via Holacracy governance.
Springest is a really interesting example. Very anti-bullshit culture, rigid focus on OKRs and efficiency, and yet they're extremely light-hearted and lack the political crap most similarly high-performing companies have.
Maybe AI makes it better in the long run, but I'm a believer already.
I worked briefly for a very large company where the bulk of the effort was around supply chain management. The actual production of the product was simple and relatively solved long ago -- it was so much more about branding and distribution. Early on I started to wonder if any of the people I was working with had ever stepped foot in one of the warehouses we were managing software for; or met a user of that same software.
The whole place was rife with consultants and contractors who had been working there for years upon years. I was there as a consultant (glorified contractor) and it quickly became apparent that I was there to be an evil consultant. The goal wasn't to produce the system they needed, it was to produce billable hours and ingratiate ourselves to the host such that we could land another project. We were using whole off-shore teams to do work which might have been done by one or two people locally. It was all about getting the margins on the highest headcount possible. For all of this, I was a BA, one layer off the "line" of people actually producing. The people above me only talked to other people who were neither buying the product nor producing it, exactly as the article describes. They were less interested in the product getting made than their ability to show that things were going well.
I found (actual) work elsewhere.
Half joking aside: this also reminds me of the java frameworks/architectures that got me to hate the language so much.
hah reminds me of the demotivator "Consulting, if you're not a part of the solution there's money to be made prolonging the problem"
I'm in consulting and there is a lot of that. Especially in big companies on big projects where entire teams can hide and just bill hours and a deliverable never materializes. The consultants have no emotional investment in the client and so as long as the invoices are paid no one is going to care.
Now, withhold payment until milestones are met or the deliverable is in production and everyone gets much more interested in productivity.
Once worked at a large corp that called these "Arthurs" (after Arthur Anderson). The executives would order them up in bulk, as in "Project X needs 80 for the next six months".
Once, to meet deadline (and thus $$$) on integrating two alarming systems, they had an Arthur watch for alarms 24x7 on system one and manually type each one into system two. You won't learn that sort of thing at university.
in many corporations of this kind it's all about:
- over-billing the customer (see Acc. and their legendary $20-30M site that was not working)
- internal power plays between managers who want to show-off managing as much headcount as possible, as that is correlated with paycheck
etc. etc.
I remember looking at this when I joined MSFT. I think I was 7 management links away from billg. And yes, many of the middle managers fought with each other constantly, not knowing what was actually happening on the coding level.
We had these huge reorgs where all the middle managers would get shuffled, but almost all the ICs and their leads would be doing the same thing as always, maybe once every other year.
Although this article leaves out that even in a flat organization, if you have people that have it out for you, or are trying to manipulate you, they are essentially building an immoral maze as well (and one that by design you will be found lacking).
I once read that nerds never understood that popular people spent all their time being popular, while nerds actually were educating themselves.
Likewise, middle management machiavellis spend all their time scheming for their promotion and enrichment, so any manager that is trying to "do good" will be stamped out because they just don't have the time to compete with full-time schemers.
Eventually all managers of morality will be ejected from that organization.
For those of you wondering why informal hierarchies can often be worse than formal hierarchies I offer an old but still very relevant essay by Jo Freeman, "The Tyranny of Structurelessness": https://www.jofreeman.com/joreen/tyranny.htm
What is disturbing to me about the idea of having skin in the game is that I really struggle to imagine a work situation in which I would even _want_ to have skin in the game. Skin in the game means responsibility at some personal level, and the absence of that personal responsibility is precisely the nice thing (perhaps the only nice thing) about wage labor.
Two ways to have a healthy organization that promotes skin in the game: workers receiving shares in the company as compensation, and having a healthy, system of promotion.
Expanding on that second one, if the most reliable way to get promoted is to create something of value to the company, that's a very good sign. If the main way to get promoted is for your boss to like you or owe you a favor, run away.
Receiving shares in the company only creates skin in the game when the typical worker can materially affect outcomes. My employer has ~$1T market cap. I can move the needle on the projects close to me, but I can't do much to move that market cap, or our earnings, or anything else. I receive shares each quarter, and happily sell them immediately, precisely because I have next to no control over the outcomes. They are guided by systemic forces and leaders much more powerful than me.
(I don't see any of this as a problem, BTW, but I think it's worth pointing out.)
Side question - won't it be more profitable to sell some and keep some for potential future profits, so the overall risk is lower but you still profit potentially?
All depends on if the stock goes up or down! And therein lies the rub. If I had held on to all my stock that was ever granted to me, I might be worth $1-3M more than I am today. (Large range because I never bothered to calculate it.) But on the other hand, there were periods where the situation was seemed dicey and it was unclear if the company would stagnate. If that had happened, I might be worth $1-3M less than I am now!
So, rather than gamble, I did what I felt was prudent and sold all my stock. I've got plenty tied up in the well-being of the company already, from my unvested stock to my future career trajectory. Even the value of the real estate I own could rise or fall with the fortunes of my employer. I don't need my fate any more tied to or correlated with the company than it already is.
> Side question - won't it be more profitable to sell some and keep some for potential future profits, so the overall risk is lower but you still profit potentially?
Selling all your stock comp immediately is more about diversification of risk.
If rsus are a nontrivial aspect of your comp, then you're already extremely exposed to risk in your company's stock price stock price (if it tanks take a big pay cut and they might even lose their job).
Well, if you save the company a million dollars, do you get even .01% of that?
Nope.
Large companies are like communism, even when there are opportunities for internal competition, it is stamped out. And for all the talk of "market pay" and "executive rentention bonuses", there is little in the way of incentivizing employees with revenue sharing tied to what they produce.
Which underlines the entrenched oligarchy of the USA. Like a meta-conway's law, our government is just a reflection of large corporations in the age of cartel/monopoly/consolidation in virtually all sectors.
The point is less about the bullshit-job nature, and more about how the job warps you as a person (i.e. to make it to upper management, you end up having to do unethical things, and rearrange your life/hobbies/etc to be the things that get you ahead)
I’m unsure if how many layers deep alone is a good indicator of if it’s an immoral maze.
I once worked with a company that had 50 employees and the hierarchy was five people deep. I once worked in a company with 10,000 employees and the hierarchy was six deep.
The larger company with one more layer was much better.
Yes, the number of levels needs to be normalized by the size of the org (although probably some log of the size, it should not grow linearly, following the nature of an org tree). If one manager has around 5 direct reports on average, you need seven levels to span 80K employees. If a single manager has 10 direct reports you still need five levels to reach 100K (though I doubt there is a single 100K+ employee company that is only five levels deep)
There is probably some room for differentiation between a purely personnel layer and a product layer. If you have 5 people, you need someone who can provide a room and some computers. If you have 500 people, you need a layer that can provision a building. Personnel wise it makes sense to have another layer -- but it doesn't follow that the product itself needs another approval layer.
I see a lot of comments saying they would be afraid of skin in the game. I ask those who feel that way; why on earth would you work every day toward something you don't see yourself in, breathe and beleive in? That sounds utterly soul-crushing to fear the one thing that gives work meaning.
Some don't have a choice. Some find meaning elsewhere, for example some see a job as simply a means to provide for their family. If a job is just a job, switching jobs for greener pastures becomes easier. Perhaps putting their family's interests before their own also becomes easier (how many stories of founders having family issues have you heard?). It's a question of priorities.
Being personally invested in a company has risks and advantages. I've seen people tolerate a lot of nastiness from their employer because the victim "believes in the mission".
I for one have to watch my tendency to get attached to "missions," lest I lose too much self-determination capacity.
> Are there large revenue rich organizations that are NOT immoral mazes?
Because both depth of organization and (the author doesn't point to this, but it's my experience of the effect the author describes) span of control contribute to the effect, there aren't large organizations beyond a certain size (independent of revenue) that aren't immoral mazes.
You can balance depth and span to mitigate the problem, but limiting organization size is the only way to actually avoid it.
Isn't it simply a matter of humans being simpletons and not meant to take into account complex phenomena such as the good for millions if not billions of people?
Most everyone I know only thought about themselves and a few thought philosophically about others but lacked experience, until they had kids. With kids, they started thinking about their kids' success so they started to care the minimum amount to get their kids into good neighbourhoods, schools, etc.
That's the extent of most people I know, most of whom are University graduates - I can only imagine people without higher education thinking even less or parroting what they heard on tv.
Given that people are this simple, 'immortal mazes' are just a natural consequence of our make-up. If we want to live in big cities and work in offices with hundreds of people, many of whom keep changing jobs, we're not going to achieve communities and the good things that come with them.
The suggestion of not having anything to do with these mazes is in effect a suggestion not to have anything to do with any extremely successful company as far as I can figure out - so, at what monetary point will a company become a maze?
It's not at a monetary point. It's usually when the company has succeeded to the point that it's not in danger of failing, even if inefficiency sets in. Once it reaches that point, then it's a matter of how long it takes the culture to rot. (Most cultures rot eventually.)
I wonder if "immoral maze" explains our politics as well, and if it has the same cause. The US hasn't been in danger of failing, even if the government became insanely inefficient.
Unless skin in the game counts as accountability, then that's definitely missing from the list. My previous employer had zero accountability for the people above the software engineers who implemented things and unfortunately these people made all the decisions. You'd have architects and PMs who had all these terrible ideas, tell people to implement these terrible ideas and then blame the engineers when things didn't work. So dumb.
Based on the article, it looks like the fundamental problem is lack of "skin in the game," and the author notes it as a defense against becoming an immoral maze. But, how can one identify "skin in the game," particularly 2+ levels of the hierarchy above oneself?
A core implication of the article's thesis is that it's very hard in general. Otherwise, the owners of any organization would just issue an order saying "everyone's gotta have skin in the game". (In fact they do try to issue that order; a typical corporate middle manager will get quite a bit of their compensation from performance-based programs and company stock they're culturally discouraged from selling.)
That doesn’t quite get at what I’m saying. I’m claiming that “skin in the game” is not really something an individual employee can identify organization wide. And, if it’s not possible to determine whether your boss’s boss has “skin in the game,” it’s a useless construct for determining whether a given organization is an immoral maze, regardless of its causal role.
Holding someone to their promises strictly is not the same thing as having stakes.
It's used as an equivalent to area denial weapon - time spent being listed with work is time you do not get to challenge the immediate superiors or peers.
The work does not have to be related to company goals.
Since the work gets pushed down, ultimately rank and file workers get screwed the most.
It's true that hierarchy is bad, but I don't see why it was necessary to spend 1500 words in saying so.
He also misses something big: your relationship with your boss is more important than the shape of your organization. A good boss can shield you from official weirdness, even in an organization 20 layers deep. A bad boss can turn any working arrangement toxic very quickly, even in a company completely devoid of hierarchy.
I wonder if the writers of HBO's Succession have read this series of web page? I have only glanced at a few pages TBH, but this immediately came to mind.
It's simply not possible to have 100,000+ employees and less than 6 levels, unless you have managers with tons of employees. But it is possible to be in a division of a large company where your group has relative autonomy and are empowered to do what they need to do. In my case, there were about 20 of us inside of a larger 500 person group. 95% of decisions were made within the 20 person group (obviously this is an approximation). Another 4% were made at the 500 person group management level. 1% were made by company-wide executives. In other words, my boss was accountable for most of what we did. On occasion, he's need to go to his boss for something. And very rarely, his boss would need to escalate to higher ups (where there were another 3 or 4 levels to the CEO). This company was very well run, but there are much smaller companies with fewer levels in the hierarchy and lots more bureaucracy.