Jason Fried: Why I Run a Flat Company

"The only problem with this analogy is that it presumes that managers can effectively see exactly where the cheese is."

Yes, its the difference between good managers and not good managers. And yes the downside of a bad manager is that a bunch of people have a poor experience rather and the rest of the team having to cover for a poor developer. So picking managers is hard, must be done carefully, and must be constantly evaluated.

"non-technical people are promoted to management where they can supposedly do less damage."

See the comment about the role of the CEO (or more senior manager) if someone isn't the right person for any job in your company, then you have to let them go. If you can't do that you're not doing the management thing correctly.

While I completely agree that flat vs a vertical hierarchy should be assessed from organization to organization, I tend to prefer flat structures mainly because they allow for the culture to mold perception of progression over an existing structure itself. What I mean by this is that if you have a structured way for internal progression (usually vertical) people mold their perceptions around that ladder no matter how much you try convincing them otherwise.

You can clearly see this being played out within the big 4 accounting firms (I recruited for them and from them). Within the firms its extremely vertical in that progression is dictated largely by how long you stayed until you hit partnership where its strictly vacancy. Thus, you're basically looking at steady yearly promotions until you reach being a senior manager after 6-8 years within the firm.

This is where I was able to take the most senior people usually in a seasonal manner pretty easily. This is because after being a senior manager you really have only two trajectories within the firm, associate partner or partner. The AP is basically a position they created to please senior managers who sounded too old and weren't good enough to be partners. So what you generally see is 3-4 hotshot senior managers all vying for the 1 partnership position that will be available that season/year. Inevitably I'll have 3/4 partner potential senior managers leaving because they know they're better off leaving the firm and going to an industry position or worse a competitive firm. They already know the stigma of being an AP.

Thus, you don't simply see attrition at the top level, but the attrition of the very best at the top level and the rest being APs. What's worse is those guys who are the best usually have a loyal following within the firm. Well guess who gives me a call after placing that senior manager as a hiring manager where they're building a team? Now you see an attrition of even better people who you were probably underpaying at junior positions leaving the firm for better pay and better hours. The only guiding light there is you're hoping that senior manager becomes their client in the future.

Thus, you see a system where the highly vertical nature of the structure led to a culture where attrition was the norm. While it might be naive to think so, I think being a flat structure might give a better chance for the culture to shape that perception of the promotion and have them "feel" it rather than perceive it.

Since when is benefitting oneself by adding value to something a bad thing or a "Machiavellian scheme"? This is what you need to do all day: figure out how to establish yourself inside your customer’s head, no matter where he or she is - get the singer they listen to, get in the publication they read, get on the radio show they listen to etc. As a CEO you should chart out your customer(s) and go after them - establishing yourself as the best choice (every demographic has a different definition of "best" so be careful here) through all and any mediums.

Also, think about it like this if you feel "evil" doing this, as a CEO you are the mind of the organization, you must think for the organization because like a baby it cannot fend for itself. I am commending Jason for being creative - most companies throw away money year after on ads in magazines like Inc that barely get glanced at - Jason, on behalf of his organization, has sold you his product - correct me if he hasn’t.

I actually feel like I got quite a reward for my time at 37signals - Yes, that's me Jason's talking about :)

Since this topic is sort of centered around a small part of my experience, I'd love to shed some light on a couple points:

True! I started my own business! For about 7 hours of my life I didn't know what I was going to do if I couldn't bloom at 37signals, and then I told David and Jason I was starting my own company, CoSupport.us.

True: I left 37signals because I really wanted to do more support-wise, and the needs of the company didn't mesh with my ideas. They need people full-time on support, they don't need someone who's not there responding to tickets. After 4 years of answering 100+ emails a day, I wanted to do other things. Needing me on tickets interacting with customers is what Jason means when he says they can't have people working on a team not doing the work of the team.

True: David and Jason may sometimes come off a bit stiff, perhaps even cold, when it comes to how they manage their business, but that's the unfortunate aspect of print, edits, etc. In truth, working for them was the most challenging, educational, inspirational time of my career so far. They are the opposite of cold when it comes to their employee's ambition, ideas, talent and goals.

True: My experience leaving was equivalent to a professional football player saying to his coach, "Hey I think I want to try being a referee!" The player isn't on the team to be a referee. If he wants to be a referee, he needs to go to referee school and become a referee, not say, "I'm going to stay on the football team and be a referee, too." That's not how it works in football, or at 37signals.

False: I was not at all "rewarded" for my ambition by being shut down, put down, held down, or in any way shuttered by David or Jason. I was rewarded by them telling me I had too much ambition to be contained there, and by them supporting my new company as best they can.

False: I actually did my first job for 37signals in 2005, and started full-time in March 2007. So a little more than "just about 3 years."

The only bad thing I have to say about 37signals or their management or my leaving is that they stole my frog, which you can ask Jason Fried about.

I think it's a good thing that a potential employee of Jason's can read his blog and be warned or at least aware of what kind of company he's running and potential future careers there. Personally as a developer I'm looking forward to gaining more managerial experience as I can see how you can make bigger more exciting things as you have more people contributing. Incidentally I work for a company twice as big as 37 signals although growing quite fast in comparison and I can see that the people in the nontechnical roles quite enjoy the possibilities (and realities) of progressing to different and managerial roles. It makes me happy that they can stick around and don't have to leave when they might otherwise stagnate.