Every company starts the same way.
- Idealism (Google)
- Flat structure, no managers (Google circa 2002)
- Open town halls where you can directly question the CEO on anything without fear of retribution (Facebook)
- Strong cultural values (Early Uber)
- Experiments on org structures (Medium’s holocracy experiment)
- High transparency (Facebook)
- No titles (apart from function heads)
Eventually all of them look the same once they hit scale. (Google today)
- Strict hierarchies
- Well defined levels and stock grants
- X years of experience for Y
- Everything being run by committees
- Risk audits
- High delta in comp for people at the same level
- People floating salary surveys to know if they are underpaid
- Single threaded leaders for cross team alignment
The simplest explanation is that in the early days of company building value creation takes precedence over everything else. Hence people move fast, even if it breaks things sometimes. Once a company reaches scale, value protection becomes the highest priority. Risk takers leave. Big company men (and women) enter the picture. Things slow down to a crawl. Instead of Day 1, Day 2 begins.
This might have been true. But companies like Amazon have continued to experiment at scale and create value by launching new products and businesses. Even Google’s stock value has doubled over the year. I think so has Facebook’s. So my hypothesis in the above paragraph does not hold true. I am sharing this because when I tweeted on evolution of companies a few days back, people started sharing the same hypothesis: “Oh it is all about value protection at scale”.
So if the only way companies can create value is my having flat structures and titles lead to corruption, then why are these trillion dollar companies still growing at 50%? I know this topic is very nuanced and there are hundreds of factors involved. A company does not grow because of flat structure or lack of it.
And hence arguments like ‘Oh Stripe does not have titles and hence they are growing fast’ is also wrong.
I know there is no conclusion for this post. A key takeaway for you. I honestly don’t know the reason for why all companies look and act the same at scale. Ever since I read the Halo Effect, I have realised no one knows anything. Don’t trust me? Check out the status of companies that were mentioned in Built to Last.