Why Company Culture is Crucial [Entire Talk]
Dharmesh Shah, HubSpot
Where Entrepreneurs Find Inspiration
Ideas and Research from Stanford University
Collection (8 items)
1 of 8
Dharmesh Shah, HubSpot
2 of 8
Patty McCord, Patty McCord Consulting
Startups may want to downplay the free food, beer and haircuts and start hiring and treating workers like the adults they need to thrive long term, according to acclaimed leadership consultant Patty McCord. In this episode, the former chief talent officer of Netflix speaks bluntly with host Bob Sutton about how backstabbing, passive-aggressive behavior and overall coddling of employees are all bad for businesses — and how actual grown-ups can hear and handle the truth, even when they disagree.
3 of 8
Adam Grant, University of Pennsylvania
4 of 8
Bob Sutton, Stanford University
I was raised to view hierarchy as a bad thing. My late father, an entrepreneur, often ranted about the idiocy he battled in the corporate and government bureaucracies that made life difficult for his little company. He loved the Peter Principle because, to him, it explained why so many organizations were packed with people who had risen to their level of incompetence. Perhaps because of my upbringing, I have always been drawn to arguments — such as management guru Gary Hamel makes — that “bureaucracy must die” and that top-down control is “toxic.”
Given my ingrained biases, I was taken aback by my own answer during an interview with McKinsey partner Rik Kirkland. He was interviewing me about Scaling Up Excellence, the book that Huggy Rao and I came out with in 2014. Rik closed the interview by asking what I learned from our scaling research that surprised me most. I immediately said something like, “I have always despised hierarchies in my heart, but this research taught me that they are good and necessary — of course some are good and others are bad, but spreading and sustaining excellence depends on having an effective pecking order.” As I told Rik once the filming stopped (it was a video interview that appeared on the McKinsey Quarterly site), I was surprised to hear my own answer to his question about surprises!
Huggy and I reached this conclusion for two main reasons. I still feel a bit ambivalent about it, but the evidence is overwhelming:
Gruenfeld and Tiedens conclude: “When scholars attempt to find an organization that is not characterized by hierarchy, they cannot.”
Organizations that are celebrated for their lack of hierarchy may downplay and reduce status differences, but they always have some people with greater formal and informal power than others — and associated pecking orders. And eliminating titles such as “manager” or “supervisor” doesn’t make the hierarchy disappear. For example, there has been a lot of talk lately about Zappos’ ongoing reorganization into something they call a “holacracy.” Some headlines suggest that the company is getting rid of bosses — that isn’t quite right. While more power is being pushed down the hierarchy, it persists under the new structure. More responsibility is being placed as people are moved into “circles” (which sound much like self-managing teams). Yet even though they have stopped using the word “manager” for many roles, there are still people who perform what sounds like middle-management roles to me: They are responsible for staffing teams and dealing with employee performance issues. And, while Zappos is getting rid of a lot of titles, note that Tony Hsieh is still called the CEO.
Hsieh may delegate and empower people more than many CEOs. But Wired’s cute claim that he is “the boss that isn’t” strikes me as somewhat misleading. As I discussed with Jena McGregor when she interviewed me for the Washington Post article she wrote on the change, Hsieh is using his power and position at the top of the pecking order to institute the new structure (which seems like a good idea, at least based on what I learned about it). In fact, this kind of claim that an organization is non-hierarchical because the top dog wields his or her power to push greater responsibility and accountability down to lower levels is also seen in hype about other companies including IDEO and W.L. Gore. Yes, when people are given decision-making power and have the requisite confidence and skills, leaders do not need to monitor or coach them as closely – but there is still a hierarchy and certain people have more decision authority than others.
In short, if you can find a group of people (or dogs or baboons) without a hierarchy, I want to hear about it. Yes, power and status differences are sometimes reduced, but hierarchy is a fact of organizational life.
Another interesting test is what happens when layers of management are removed in a company. Certainly, some organizations have too many layers, but some quite famous founders have discovered that they need intermediate layers — even though they long for the good old days when it was just them and a small team. Google Co-Founder and CEO Larry Page is exhibit one. As we wrote in Scaling Up Excellence:
‘Page has been described as “obsessed with making Google work like a smaller company.” In 2001, when Google grew to about 400 people, Page decided that middle managers were creating complexity and friction — symptoms of John Greathouse’s “Big Dumb Company Disease.” So he got rid of all of them. More than 100 engineers reported to a single overwhelmed executive. Frustration and confusion was rampant. Without those middle managers, it was nearly impossible for people to do their work and for executives to grasp and influence what was happening in the company. Page learned the hard way that a hierarchy can be too flat and that middle managers are often a necessary complexity.’
The upshot is that, as you scale an organization, getting rid of the hierarchy — or even assuming that a flatter one is better — is the wrong goal. Your job is to build the best hierarchy you can.
An earlier version of this article appeared on LinkedIn. Bob Sutton is on Twitter @work_matters.
5 of 8
Bob Sutton, Stanford University
6 of 8
Meg Whitman, Hewlett Packard Enterprise
7 of 8
Michael Dearing, Harrison Metal
In order to understand how friction helps and harms work, Stanford’s Bob Sutton, author of the forthcoming “Asshole Survival Guide,” interviews management expert Michael Dearing, a former senior vice president at eBay who has done corporate strategy for the Walt Disney Co. and now heads Harrison Metal, a VC and education firm that focuses on general management, business leadership and product development. Discover the timeless truths of good management, the rules of engagement to allow for creative tension, and the virtue of velocity for the entrepreneur.
8 of 8
Bob Tinker, MobileIron