Thrynn wrote:

] "Through the years, I have greatly feared and sought to keep
] at bay the four beasts that inevitably devour their keeper --
] Ego, Envy, Avarice, and Ambition."
]
] And therin lies the problem. People who start and/or run
] businesses end up getting consumed by ambition and ego. Their
] businesses end up failing, or failing to meet the full
] potential becuase that person refuses to make an organization
] that can function without him or her. This seems unnatural
] since many people feel they *are* their work and if their work
] doesn't rely on them they feel they are wandering without
] purpose.

I would vehemently state that this is a gross oversimplification and generalization. There is a distinct difference between people who start businesses and people who end up running large enterprises.

With that said, I am ambivalent about this article. I agree that an organization that pushes empowerment and accountability as far to the edge as possible is better. This is in line with Drucker's thoughts on the nature of entrepreneurialism. However, scale creeps in and some other dynamics that make it very difficult, impossible even, to make the organization function effectively. For instance, given today's requirements for corporate governance, it becomes incredibly difficult for a CEO/CFO to sign off on quarterly statements when there are things going on at the edge of the enterprise that they have no idea about due to the autonomy in force there.

Today's hierarchical organizational structures and command and control philosophies are so prevelant for a reason. They work, particularly well in super scaler systems. You see them all over nature. While it can be easily demonstrated that these structures have originated due to hubris and insecurity on the part of the leading point (King, Pharaoh, CEO, whatever...), I can still see a good amount of usefulness in them. That's not to say that bureaucratic or autocratic systems are preferable. Quite the contrary. You want a mixture of hierarchy and empowerment.

That's why I find it intriquing that they use the term 'chaordic'. We're not given enough detail on what the organization looks like at Visa. We have no idea who reports to who, or what committees are present, or who's responsible for what, or even if none of those things apply. So it's difficult to say whether it's more or less 'chaordic' than any other organization. I think of hierarchy as the skeleton that allows the muscles to get work done. One needs the other. It's ironic that entrepreneurism preaches chaos, while staunch corporate management theory preaches control. The typical organization is constantly vacilating between those states. It's never one or the other, and the tension is constantly changing on a daily basis. It's that tension, muscle pushing against bone, that gets things done.

The 'DNA' that makes up an organization is what constitutes where on the spectrum it sits in regards to being more chaotic or more ordered. That DNA is typically an extension of the founders, or the management team, or maybe even the CEO. Things radiate from the top. I don't think that's ever going to change in any organizational structure. It's human nature. We can't all be leaders. We can't all follow all the time. There is a balance between the two where you make people part of the mission. Integral parts. And by doing so, you bring out the best in them. But there's no magic formula for achieving this. It's based on knowing your people, and the situations they're in at that moment. Giving them more (or less) breathing room to do their jobs. It's art, not science. But that gets really difficult as the organization scales.

The best that you can do is to hire the absolute smartest and confident people you can find. And herein lies the biggest problem I see with Hock's theories. In order to push out power to the edge, you need two very important things: competence and communication. If you have the latter, you usually get the former, but not always. And nurturing both is a full time job, and is essentially the job of the CEO. She has to put the pieces in place - build the machine essentially, and maintain it - while the machine does the work. So intrinsically, you are saying that the 'maker' is the most important piece. Even if everyone around her 'gets it' and regurgitates the message in exactly the same way, there's no one minding the health and wellbeing of the machine. Now you can try and assuage that to some degree by hiring smart people. But then you're trading efficiency for HR costs. And you run into scaler problems again, because in any given area, there are only so many A+ people. It's impossible to get them all. I know. I've tried. And you'll never have enough.

A people hire B people who hire C people, and so you've just started building hierarchy again. And as we already know, A people are more susceptable to trying to prove that they are A+ people over the other A people. Competition is good, I agree with Hock there, but too much competition breeds contempt, and that breeds politics, and then you're back where you started from. Because politics will seek to enforce command and control in order to wield power. And we haven't even gotten into humanity's imperfections, like inconsistency, or shortsightedness.

So in short, I think that organizations can be built that are not the typical pyramid of power. In my experience, I sought to build organizations where the field was what I used to control the top and the middle. That is to say that the points where we interact with customers, vendors, suppliers, and partners are the most critical, and everything lines up along facilitating those processes. But there are problems there too.

I also agree that senior management gets paid too much. In fact, I think that your Director level folks, the sales managers, customer service managers, and the like, should be paid much more than the CEO. But I don't see that changing because the CEO is ultimately the leader of the organization. And how can you respect and follow your leader when you are 'worth' more to the organization than she is? When your opinion and input matter more to the overall strategy and execution than the CEO's? That's a dynamic that few, if any of us, could operate under. Overall, I'm glad that someone like Hock is there pushing us in that direction, but I think that the ultimate place that he wants us to go is not practical for all but very few specialized small organizations.

RE: The founder of Visa on Corporations