When Big Companies Are a Good Idea

When Big Companies Are a Good Idea
yosefk.com

The largest projects I've worked on (70-odd people) have worked best when everyone was working together in the same office. Matching that kind of efficiency with teams in different offices is impossible, let alone when they work for different companies.

Edit: Which isn't to say that outsourcing is impossible to implement well. But it needs to be things with well understood requirements so that little communication is needed. The more communication that is required, the harder it is to make it work well.

1. Is the revenue generated by a company proportionate to its size? Or do smaller companies make more? Or larger companies? Comparisons would be like WePay vs. Microsoft (or, in the same sector), WePay vs. PayPal.

2. Are the problems he notes in a hypothetical industry dominated by small companies outsourcing exclusive to hardware manufacturing, or to all aspects of the manufacturing process?

Starting the article with pg's question--"Why be a manager when you could be a founder or early employee at a startup?"--then going on a different tangent altogether to answer "Why do large firms exist?" never left me satisfied with the author's claim he "could fill a book explaining why" to be a manager when you could be a founder or early employee at a startup. Claiming the question of why large firms exist to be the question implied by pg's original was a logical misstep.

pg's question appears--to me, so obviously I could be wrong--to dispute the wisdom of working at "companies where the only way to advance is to go into management." I'd have expected a "response" of this length to somehow defend either A) going to work for companies organized this way, 2) removing companies from the discussion altogether and defending the hierarchies & organizational principles behind management & its being the default rungs in the advancement ladder, or D) answer why being a manager is to be preferred vs the founder or early startup employee role.

The attempts to explain how markets work to the advantage of large firms--with random mentions of economic theory peppered about--does little to explain why they exist this way at all. It's merely a narrative of what exists now. A better--and more thorough and compelling--article would have tackled the big question of why our markets operate in such a way as to be of greater advantage to large firms who secure resources through contractual negotiations that evince preferential treatment to larger vs smaller buyers. If everyone interested in producing a product were able to achieve the same price-per-piece when buying two pieces as buying two million pieces, this shallow argument of why large firms exists--and are a good idea--would fall flat. The transaction costs the author uses as defense of the big company are artificial--an economic barrier placed atop the market that prohibits entry of competition by securing preferential treatment for one's own company.

Moreover, the article never gets back to the question it begins with--why work where going into management is the only way to advance? This is what I waited till the end of the article to find out. Quite disappointing. I'm still wondering. I've recently started working at a company where the only way to "advance" is to be in management. Before this, I was at a small company where I felt locked in as a programmer--where my ability to build reliable software was, of course, a benefit to the company they relied on, but where in 3 years I was never once asked to "advance" in a meaningful way that didn't mean becoming a "manager". I was pretty disappointed. Even in small startups, the business-as-usual notions of managers over programmers, designers, and other productive talent prevails. This company was better than others, but was eventually undone--a rift between the managers ultimately led them to shut down the entire company and lay everyone off. Now, having moved on to a larger company where I'm now "managing", I find myself wondering why this is any better of a lock-in than my previous post--meetings, emails, phone calls, reports, productivity ... all of this shit just bores me, gets in the way of getting a task done, and offers so little value to both my team's work & the company's bottom line. And of course here, as in so many other companies, advancement is tied to remuneration and other perks. But why should I put up with this shit instead of moving on? I work very hard to keep carving out time & tasks on which I can program directly, but it's tough.

The article touches on a couple key points that (I think) it erroneously attributes to being good points for big companies--namely, trust and cooperation. Moving from a small company to a larger company--and obviously, this can be anecdotal (but I don't think it can be so easily dismissed as such)--trust and cooperation are not abounding. Larger companies divide employees into distinct departments that, rather than operate in the company's best interests, operate in their manager's interest and draw up all kinds of political districts through which it seems impossible to build trust and a cooperative spirit among coworkers. There are departments who attempt to control parts of the business for which they have absolutely no skill, training, experience, or even basic understanding. Offering to work with them to help them meet their goals goes nowhere. Large firms do not equal a sudden conversion of competition to cooperation or mistrust to trust--which the author, to his credit, acknowledges. But neither do they truly "frame things right". Where questioning why to become a manager vs a founder or early employee, pg is questioning exactly what is fundamentally flawed--working in a place where advancement equals management (and, implied I think, where management is the only way to have a voice in the operations, visions, practices, and future of the company itself). Lack of trust and cooperation is a fundamental flaw of the market itself, which big companies both exacerbate and use in their favor. To be fair, there are undoubtedly certain companies which successfully create a culture of trust and cooperation among their employees--and these are companies likely to be admired and studied as examples for others. However, trust and cooperation must be both created and nurtured. Why can't the market do this, too? And are big companies at all at fault for the lack of trust and cooperation in the marketplace? Why would a large firm seek to increase overhead through hiring if they could establish trust and cooperation among partners in the marketplace?

I think the answer to the question requires a careful consideration of management itself--its goals and benefits, its responsibilities and rewards. This article adds little to that discussion. Furthermore, answering the question should entail a discussion of advancement itself. If we pull promotion to management out of the equation (which we should), what are we left with? What now qualifies as "advancement"? Is it just economic advancement? Is there advancement to positions of greater responsibility, impact, input, etc., that does not equal being turned into a manager? If a company (big or small) is hiring the right people for the right jobs, does anyone really need to be a manager? Should a manager's (or other "senior" person who is in a position to dictate what is to be done) idea of what to do next outweigh the input provided by a talented, experienced person who is actually going to do the productive work? Managers excel at creating a lot of fake work for employees and otherwise wasting everyone's time. This is, in my experience, overwhelmingly apparent and exacerbated in large firms--perhaps because small firms stay away from creating a culture of managers.

As it is, answering the question of "Why do large firms exist?" or the author's own premise of "When Big Companies are a Good Idea" needs far more than a marginally informative retelling of how large firms behave in the market today.