Solution — We Don’t Need Managers!
We don’t need managers 😊
With the economic downturn of 2023–2024 that is pushing for cost-cutting, the trend is once again to question the value of managers. Do we need managers? Could it be that on top of the cost and the additional communication layers, they even have a negative contribution? Are they an obstacle to the success of the organization?
Some organizations recently decided to remove middle management, that is, to lay off team leads, engineering managers, senior engineering managers, heads of engineering and directors. Some are huge companies, some are smaller start-ups or scale-ups.
Some companies presented these managers with the option to transition to an IC (individual contributor) role or to leave.
Even Google removed its managers 2 decades ago.
Let’s have a look at some of these stories.
Bayer doesn’t need managers
Bayer announced a new model in January 2024:
…a new operating model called “Dynamic Shared Ownership” (DSO) worldwide, which will reduce hierarchies, eliminate bureaucracy, streamline structures and accelerate decision-making processes. The aim of the new operating model is to make the company much more agile and significantly improve its operational performance.
Our new operating model is designed to make Bayer faster and more innovative, at the expense of many managerial employees.
Online articles from April 2024 look similar to this: “Struggling pharmaceutical giant Bayer is going boss-less, allowing nearly 100,000 employees to self-manage-and saving billions of dollars in the process”.
It’s the first time I see a connection between having managers and low performance or lack of agility. This is very fresh, so we’ll see how this develops.
We don’t need managers, do we? 🤔
Zappos didn’t need managers
In 2014, Zappos adopted a flat-management structure, also known as a holacracy.
There is a growing body of evidence that shows organizations with flat structures outperform those with more traditional hierarchies in most situations.
It’s time to start reimagining management, making everyone a chief is a good place to start.
- Tim Kastelle (for HBR)
The new structure no longer contained job titles and put everyone in charge of their own work. Since announcing this transition and attempting to accelerate with an ultimatum from Tony Hsieh, the CEO, more than 14% of Zappos’s employees, about 200 people, have accepted severance rather than participate in the company’s new organizational structure.
“So what,” you may ask, as Zappos was very successful. Apparently, the company did ban the title manager, but not the activity. Instead of using the title manager, the company had a mentor or a compensation appraiser. (Other companies have similar tricks, like people who are in the role of “making sure the team is effective”).
Moreover, in the last few years, Zappos has been quietly moving away from holacracy. Executives explained, that after it had encountered some big challenges in its business metrics and sought to redirect employees’ focus back to the customer, it brought back managers while retaining its circular hierarchy, a key artifact of holacracy.
Google didn’t need managers
Google wanted to know for sure whether managers were needed. In 2002, it experimented by removing bosses from its hierarchy. The answer was a resounding yes. Managers were critical not only for structure and clarity but also for team performance.
In an HBR article, they shared that the experiment lasted only a few months. They relented when too many people went directly to Page with questions about expense reports, interpersonal conflicts, and other nitty-gritty issues. And as the company grew, the founders soon realized that managers contributed in many other, important ways-for instance, by communicating strategy, helping employees prioritize projects, facilitating collaboration, supporting career development, and ensuring that processes and systems aligned with company goals.
So we actually ended up trying to prove the opposite case-that managers don’t matter. Luckily, we failed.”
- Neal Patel
Google brought managers back and wanted to understand what made a good manager, so it conducted research on over 10,000 managers, known as Project Oxygen in 2008.
Traditionally, Google hired and transitioned into management based on high technical expertise, but after this research, they realized that a good manager has 8 traits, aka “Eight Habits of Highly Effective Google Managers”, and later on added two more:
- Be a good coach
- Empower your team and don’t micromanage
- Create an inclusive team environment, showing concern for success and well-being
- Be productive and results-oriented
- Be a good communicator and listen to your team
- Support career development and discuss performance
- Have a clear vision and strategy for the team
- Have key technical skills, so you can help advise the team
- Collaborate across Google
- Make strong decisions
Valve doesn’t need managers
The official employee book at Valve reads:
We don’t have any management, and nobody ‘reports to’ anybody else. We do have a founder/president, but even he isn’t your manager.
In 2013, an ex-employee described how the company had “a pseudo-flat structure”:
There is actually a hidden layer of powerful management structure in the company, which made it feel a lot like high school.
When there is no explicit hierarchy, there is an implicit one, which is harder to understand and navigate, especially for new joiners, to be effective and productive.
Another one described the no-boss culture as “only a facade”:
To succeed at Valve you need to belong to the group that has more decisional power and, even when you succeed temporarily, be certain that you have an expiration date.
While Valve has a high review on Glassdoor, among positive reviews you can see things like “paranoia”, “chaos” and “lack of cohesion”.
A quick Linkedin run-through shows employees with titles of “VP”, “Director”, “Head of”, “Manager”, “Principal” and “Senior”.
{Anonymous} startup doesn’t need managers
I took part in a management workshop some time ago. One of the participants, a director of engineering asked for advice.
As he didn’t see value in engineering managers and wanted to cut costs, he laid them off and managed 30 ICs directly. His question was how to reduce the high turnover, increase the low engagement and mediocre performance.
I asked him, if managers were not needed, what was his role then? He was also a manager. He replied that someone had to make the technical decisions.
He tried to have monthly 1:1s and “cover” all his reports in a year, admitting he wasn’t successful. Those 1:1s were mostly random status updates about projects. He didn’t know his reports well.
Upon suggesting he has frequent 1:1s and gives feedback, he replied he had no time and expected them to improve on their own. Pointing out that the high turnover was a result of his managerial practices, he replied that it actually brings new blood to the organization, so in the end it’s not really negative.
So, do we need managers? 😕
Statistically, in most cases, yes.
In a very small company, in a highly dynamic environment, maybe not. Some managers in the example companies above were happy to not manage anymore. Some ICs were happy with the new freedom. There are very few companies that run without managers and seem to be doing just fine.
Only 3 things happen in an organization without deliberation:
- friction
- confusion
- underperformanceEverything else requires leadership.
- Drucker
I hope it’s clear by now that it is not enough to “hire smart people and get out of their way”.
It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.
- Steve Jobs
“Even” smart people need support, feedback, guidance, recognition and safety.
Apart from cost-cutting, it seems to me that there is a perception that managers create bureaucracy instead of promoting innovation. Is it really middle management that creates bureaucracy?
After all, senior management was kept in almost all management-free companies, and it still puzzles me. Some even made great public relations over removing management, but still need directors and other management layers to set the direction and give assurance.
Maybe what we don’t need is bad managers?
If you feel that management prevents you from work:
As an IC
- Recall Google’s experiment removing managers — think how it would be without them
- Tell your manager what you need from them to succeed
As a manager
- Take management seriously, learn this profession
- Your managerial part of the job is critical; less your IC work — hold 1:1s, give feedback, coach, delegate and set psychological safety (see how they reflect the 10 Google traits? If not, read about MX — Management Experience™)
- Deliberately change things, it’s your job
As an executive
- Seriously train all your managers
- Flat organization is a reaction to bad management. Look closely at what isn’t working, and find a solution that fits your stage, size and culture
