I don't have much love for the idea of a professional executive, though. When you have people whose job it is to Make Decisions and nothing else, then you end up with a small group of people who feel entitled to make their ideas unassailable. That's horrible.
I basically agree with that, but on the flip side, I'm not convinced that management has no role. Self-organization sounds good, and it certainly works in some systems, for some value of "works". The question I have is, when the system is designed to achieve a very specific end - "maximize return on invested capital" - can total self-organization do that?
I also think it's a misnomer to suggest that executives do nothing but "make decisions". Good executives aren't just sitting ivory towers mandating things by fiat, they are conduits and coordinators. They proactively seek out information, identify problems, bottlenecks, etc. and work to coordinate efforts between all involved parties to mediate things.
I think management is a job that most companies structure extremely poorly.
Now that I agree with.
Don't get me wrong, I'm all for a very flat organizational structure, empowered employees, shared purpose and self-organization. But I think specialization of labor has a role to play as well, and I think there is some value in traditional management.
All of that said, I would love an opportunity to go visit Valve or the W.L. Gore and spend some time observing how things work there. When they day comes that we can grow Fogbeam Labs and have start having to deal with more people, I am very much intrigued by trying to keep management as minimal as possible.
"Maximize return on invested capital" is a horrible goal. It's not even the real goal of most investors. Retirees have most of their money in bonds-- stock gives better returns, and exotic vehicles do better than that (on average)-- but at that age, they don't want the risk. Investment isn't about "maximizing returns". It's about managing risk. Applying calculus and basic knowledge of derivative securities, I can come up with an investment strategy that has an EV of +50% on one year... but that has a good chance of leaving you utterly hosed. (Load up on beta using out-of-the-money call options.)
Also, the claim that CEOs are legally required to operate in short-term shareholder interest is a common misconception, but it's not true. There is no such law. CEOs aren't allowed to make decisions to the advantage of their personal financial benefit while hurting the company (that's called "stealing") and if they use dishonest means, they can go to jail. But a CEO who prioritizes a subjective health concern (sustainability, ethical business, fairness in compensation) isn't doing anything illegal. It's the CEO who gets caught embezzling funds who goes to jail, not the one who increases salaries by 10% to improve morale.
Now, there are a lot of sociopathic executives who use this "legal obligation" (to maximize short-term shareholder returns) to justify a lot of selfish and questionable things (that benefit their bosses, and thus them) but the truth about it is that it doesn't exist. It's an excuse. Classic negotiation tactic: It's Not Up To Me.
Healthier companies, I would argue, are less prone to downside-heavy but often invisible (non-financial) risks. If everyone feels micromanaged, overworked, and underpaid, then you're at risk of external "poachers" if the job market improves. This doesn't show up on a balance sheet, but it's pretty critical.
I basically agree with that, but on the flip side, I'm not convinced that management has no role. Self-organization sounds good, and it certainly works in some systems, for some value of "works". The question I have is, when the system is designed to achieve a very specific end - "maximize return on invested capital" - can total self-organization do that?
I also think it's a misnomer to suggest that executives do nothing but "make decisions". Good executives aren't just sitting ivory towers mandating things by fiat, they are conduits and coordinators. They proactively seek out information, identify problems, bottlenecks, etc. and work to coordinate efforts between all involved parties to mediate things.
I think management is a job that most companies structure extremely poorly.
Now that I agree with.
Don't get me wrong, I'm all for a very flat organizational structure, empowered employees, shared purpose and self-organization. But I think specialization of labor has a role to play as well, and I think there is some value in traditional management.
All of that said, I would love an opportunity to go visit Valve or the W.L. Gore and spend some time observing how things work there. When they day comes that we can grow Fogbeam Labs and have start having to deal with more people, I am very much intrigued by trying to keep management as minimal as possible.