Eliminate Managers? CEOs Who've Tried It Explain Why It Works
BY Laura Montini
In a recent blog post, CEO of Treehouse Ryan Carson explained why he decided to eliminate management.
You've no doubt heard about companies that have embraced the "no manager" org chart. If you've ever wondered whether you should implement the strategy at your company, good news: Ryan Carson, CEO of education platform Treehouse, recently spoke with 99U about why he decided to do just that at his 3-year-old company.
"My main tenet as an owner is to treat other people like I want to be treated. We look at our employees as adults. The basic premise is we all should be able to make adult decisions and take care of ourselves," Carson told 99U. Carson had also written in a blog post last year explaining that as the young startup grew to 60 employees, divisive politics were suddenly introduced into Treehouse, where they hadn't been before.
So how does anything get done at a company with a flat organizational structure? At Treehouse, employees use an internal company program to propose new ideas. If enough people want to work on them, they begin the project, Carson said.
Treehouse isn't the first company to adopt the approach. Zappos, video game company Valve and web application company 37Signals have banned virtually all managers. 37Signals President Jason Fried recently echoed Carson's desire to do away with the less beneficial aspects of manager-to-employee interactions.
"One of the things I like about the arrangement is that it frees us from the often toxic labor-versus-management dynamic, in which neither party truly understands what it's like to be on the other side," Fried wrote.
Even if the flat org chart manages to successfully eliminate company politics, the strategy does have its drawbacks.
Carson said Treehouse had to let three people go when the change was made. It was clear that they simply wouldn't be able to fit in with the new structure. After that, two more people were let go because they were underperforming.
There are a few other things you need to be aware of too. As Inc.'s Erik Sherman recently put it:
Egos will not magically disappear. You and your executives might find yourself accidentally resorting to your old ways, forgetting that you don't have a team working under you anymore. It's a hard habit to break.
Hire with the structure in mind. With this system you'll need employees who are very good at many things. "They should also have enough flexibility of outlook and attitude that they could take up something else in the company if it were necessary," Sherman said.
The company will require more transparency. "If everything isn't transparent, this entire experiment will fall apart," Sherman warned. Treehouse's Carson seems to agree with that point. He said the company is thinking about publishing all salaries because it will help everyone plan their projects better if they know how much it will cost.
"If you don’t understand that a developer is paid twice what a support person makes, you can't make the decision unless you have all those facts," Carson said.
LAURA MONTINI is a reporter at Inc. She previously covered health care technology for Health 2.0 News and has served as an associate editor at The Health Care Blog. She lives in San Francisco. @lmmontini