Big Companies Are The Best… In Maintaining Status Quo

What happens when company grows from 10 to 100 people?

Initially there’s a group of highly motivated and hard working people led by one or a couple of visionaries. Everyone knows each other well. Everyone knows what anyone else is doing at the moment. Then some success happens and organization grows. At the beginning it scales up trouble-free. Somewhere along the way teams emerge. Suddenly company needs a few managers. Who is promoted? What a question. Of course those who were in the pack when employee counter was one-digit.

First hierarchy self-emerges. No one really thinks about this much. After all it’s all about a couple of teams, not full-blown organization. Then the company grows further and by the time it reaches 100 people there are probably at least two levels of management. First managers add new folks to their teams to the point they need middle management to deal with their 30-something people.

Note: at that point there still isn’t much planning when it comes to organizing company structure. It is created in the meantime while people aren’t focusing on their work.

What happens when company grows from 100 to 1000 people?

By the time organization has 100 employees self-emergent structure becomes suboptimal. It is no longer a bunch of people working toward common success. If you don’t hire great candidates only, and let’s face it: you don’t, there are some people on board who just work there and don’t really care for anything beyond their paycheck. There are also few managers who shouldn’t become managers at all but should stick to engineering. To add some spice the company still grows at constant rate.

The bigger it grows the more power management gets. Execs no longer work with line employees most of the time. They work with excel sheets and if they meet someone they are other execs or senior managers at best. Real power is moved one level down – to managers who make hiring decisions, promote employees and deal with all people-related issues. Who are they? Remember this few veterans who were around from the very beginning and become very first managers in the company? Well, now each of them leads one of multi-team departments with close to 100 pairs of hands each.

Sure, there are reorganizations but most likely they happen out of the center of the company. Core remains unchanged. Why? Well, that is damn good question.

A short answer is: because big organizations are great in maintaining status quo. I don’t want to argue whether a few hundred people make a company big (it does not) but somewhere between 100 and 1000 people this attitude appears and it is there for good.

And here’s a long answer.

• Think about management skills of early-managers. Most likely it is their first management job. Most likely they were engineers initially. I’ll be brutally honest: chances are good they doesn’t really suit management job. The problem is they don’t even know that. They can’t. They may even do their best and still suck as managers. If they have grown with the company they may lack just good role-models in management. I could bet my money against their management skills in this situation and, on average, I would win.

• Now, put yourself in shoes of these veterans. They are with the company from the beginning. They career seems to be well-earned. They aren’t aware they may suck at what they do. When they were engineers they had simple verification of their work: test passed, client didn’t complain thus everything was good. With management it isn’t so easy. Their team won’t come to them to say they suck. Hey, you just don’t go to tell such things to your boss. We can even consider managers are aware they suck a bit. And what would they do? Resign to leave a position for someone better? You must be kidding me.

• So what do execs do with this? Pretty much nothing. They’re chewing through their Excel sheets and as far as numbers are fine everything else is too. And if numbers start to stink who would they talk to anyway? Well, managers I guess. They’re disconnected with most of the rest of people for a long time already.

Maintaining status quo is a safe choice for everyone who has enough power to make any important decision in the company. Those who see problems and would like to change something are either somewhere on periphery of organization or very low in hierarchy structure. The former aren’t taken seriously the latter hit the glass ceiling.

What more, existing status quo propels the same behavior all over again. If the company promoted three out of four engineers from early setup to senior management the fourth one pretty much expects the same. And most likely he will get the promotion, no matter whether he was the best candidate or not.

Of course you can find counterexamples. I don’t say every company works that way. I guess when Google hit 500th employee mark they were still nothing like that. I know startup where all 3 co-founders had experience in management so they aren’t likely to hit this reef either. I know companies which will never make it past 50 people so they definitely shouldn’t care about these issues.

Anyway more often than not defending status quo is a problem. I’ve seen it at all stages from few dozens to few thousands of people. And it always looks like decision-makers weren’t aware of the fact or, if they were, like they didn’t care. When company grows to specific size it is just easier that way.

In the next posting I’ll give an idea what can be done to change the situation. Stay tuned.