Why Hacking Management is Bad

Posted by Kyle Redinger on Dec 16, 2013 9:44:00 AM

Hacking_Management

The tech community is obsessed with innovation, sometimes even to its own detriment.

Many interesting workplace innovations have certainly occurred as the result of hacking management. Some good, and some bad. We’ve adopted an unlimited vacation policy and other policies that allow us to trust our employees to make smart decisions. But we’re also careful to not make rash decisions that create more risk, especially when it comes to big management styles or cultures.

Often, founders will make a decision to hack management because of the belief that alternative management styles will attract people who want to work in startups.

Alternative management styles are meant to define a culture in the company, but the problem with this approach is, quite frankly, how do you really know that management style is going to work? And, more importantly, why would you create alternative management styles that increase the risk to your firm?

The majority of the risk in the startup is in the product/market fit, and in the scale period, so why create additional unknowns and experiments?

The Bad Hacked Management

Bad hacked management are things that don’t scale with your company or that achieve short term benefits in the expense of long term value. For instance, I read about a startup that had decided to let employees vote on their own salaries, in a very public manner. This is not unlike law firms where partners have responsibility to bring in revenue, the difference being, that it’s logical to tie compensation with revenue. If this startup does grow, can you imagine how many compensation issues will surface? What happens when the company needs support staff that don’t demand a premium salary? I imagine this would get quite messy. People have a tendency to get jealous if they perceive unfair differences.

Or, another company that is getting rid of management all together. Will this work? Why would they want to take that risk? Are shareholders ok with it? Time will tell.

The Good Hacked Management

Good hacked management works and creates lasting value for your company. It helps create challenges for people; puts people who benefit from each other together; and helps people make a meaningful contribution. Importantly, Good Hacked Management is unique to a company; it is not universal. Here are some examples of unique hacked management that work and possible reasons:

  • Valve’s flat, ad-hoc development-oriented organization: It works because the gaming industry has some of the most passionate people in the world and Valve is one of the few companies that has more creative control than other companies. Valve lets people choose their own contributions because creative passion guides people to make good decisions.
  • GitHub’s 50%+ remote workers: It works because GitHub is a tool built for distributed workflows, so naturally their team understand the cultural elements of working in this type of environment.
  • Google’s 20% Time: It works because Google is so absurdly profitable. It’s also a recruiting tool, especially when there are so many Bay Area startups that are taking talent from Google. I’ll bet  that 99% of tech workers are aware of the Google 20% time, so it worked, sort of. It’s being phased out, because, management probably figured out that this didn’t create the internal startups they envisioned and spending 20% of time optimizing ad placement is much more valuable for wallstreet.

Do you agree that there is too much management hacking in the tech community? How much management hacking do you do? What things have worked for you? What do you copy from others? What do you abhor?

Picture from EJP Photos.

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