Illustration: Oscar Ramos Orozco

Do We Really Need Managers?

Ryan Carson was presenting his company’s latest numbers to investors when he broke the big news. In the middle of the presentation, one investor stopped and asked, “Wait, who reports to who?”

“My co-founder [Alan Johnson] and I just kind of looked at each other and laughed,” says Carson. Then they fessed up. “We said ‘No one reports to anyone.’”

Treehouse’s investors are used to workplace experiments like this. The online education platform that teaches its students a variety of programming languages is no stranger to the non-traditional work environment. The company is largely remote, and offers employees four-day workweeks, among other perks. More recently, however, the company opted for a completely flat org chart with all middle management removed.

Instead of advancing the company using top-down directives from leadership, the company organizes around projects proposed by employees using collaboration software. Employees propose the projects they want to see completed and, if enough coworkers join, they can get started. 

It sounds crazy, but it’s a growing trend in business. A similar structure was adopted by Zappos earlier this year and has long been in place at Github, Valve, and other companies.

Since switching to the no-manager structure, Treehouse co-founder Ryan Carson says he gets less than 20 emails a day and believes worker morale has skyrocketed. We talked to him about how it all works:

Why do this?

My main tenet as an owner is to treat other people like I want to be treated. We look at our employees as adults. The basic premise is we all should be able to make adult decisions and take care of ourselves. Everything comes from there pretty easily.

Screenshot of Convoy, Treehouse's internal collaboration software. Credit: Ryan Carson

Screenshot of Convoy, Treehouse’s internal collaboration software. Credit: Ryan Carson

What have you learned now that it is seven months in? 

You have to have a communication tool like Flow and Convoy which are the two internal tools we built. Because you cannot do email. It just won’t work if you try to operate as normal with email. 

Why not?

Email by nature is private, and the only way to run a no-manager company is very publicly. Data cannot be silo-ed anywhere. The second thing I’ve learned is that sometimes it is hard to reach consensus. What is starting to happen is that people will end up not making a decision when they disagree on something. Because no one has the authority to make that decision above anybody else.

My cofounder and I do not want to get pulled into and settle all the fights. Someone can say, “Guys, there are a lot of good arguments going on but there are no conclusions.” Someone has to be brave and say, “Okay, I think this is the consensus. I am going to tell the whole company of the decision.” 

Email by nature is private, and the only way to run a no-manager company is very publicly. 

How does this jibe with the traditional leadership ethos that concentrating all effort behind a very few amount of projects is the best way to move the ball the farthest?

The best description of a no-manager company, is that it is an ant colony. It looks really chaotic and it is sometimes hard to understand what is happening, but then a crazy structure gets built. Often. even as the CEO, I do not understand exactly what is happening on any one day. Entrepreneurs and CEOs are not saviors. They are not perfect. People look at the Steve Jobs brand and think that there is something magical going on, but I believe that is not true. It is not really in the best interest of Treehouse or any company for the CEOs to truly control its direction, because he is just one guy or girl.

We have 65 people at Treehouse, and it is better to have 65 individuals who are capable of making decisions and thinking and seeing things than one. So, we are less decisive, less coordinated than a traditional organization structure, but we are still crazy enough to get stuff done and everyone is extremely motivated. I think if you are going to pick one or the other, I would always go for more chaos, way higher motivation, and more innovation than more control.

I would always go for more chaos, way higher motivation, and more innovation than more control.

Do you think that is because Treehouse’s business model is pretty well established at this point? You guys know what you need to hit for revenue. It is not as if you are a bootstrapped startup still trying to figure out kind of your market fit at this point.

That’s probably fair but you know at the same time, we are still very much trying to figure out our business. Yes we have revenue, but our primary revenue is probably going to come from stuff that we do not even do yet. I think it will be pretty hard for a company who does not know what its business is to operate this way.

You took VC funding in 2013. Typically this comes with a large amount of pressure to scale very quickly for a potential exit event. Is this chaotic no-manager approach appeasing your investors? Are they okay with this?

Our investors love it. We actually didn’t tell them until after it was done. After we explained it they said, “Oh gosh, of course that’s better. Everybody in the whole world believes their managers don’t actually do work and they pretty much despise them.”

Usually people use a management org tree as a way to advance their career. Is that possible here? I imagine your response to that is, “No, but you can then do much more cool stuff because no one’s standing in your way and that will advance you career more so than anything.”

And I love that. It kind of reduces all the political bullshit. I used to spend probably 50 percent of my time working on the org chart. Now basically it’s up to everyone to make themselves happy and make sure that they are enjoying their job. And if they don’t, then they can leave. 

It’s up to everyone to make themselves happy and make sure that they are enjoying their job. And if they don’t, then they can leave. 

Has anyone left since you have been doing this?

When we made the change we let three people go and that was because we felt like they did not want to fit in with the structure. Since then, we have actually let two people go because they were not performing. 

So how do you keep everyone accountable?

The way it works is, every quarter, you do an anonymous review with the people that you worked with. If you get negative reviews, it’s just a “one strike and you’re out” policy. You get one meeting and then after that you get let go. Unfortunately, we’ve let two people go this way. They were issued warnings and when they got another one, we had to let them go. The other good thing about no managers is there is nowhere to hide. If you don’t perform, everybody knows that and you can’t blame anybody. 

Not only did you remove any managerial “cover” but everything is probably very exposed.

Yeah and when we enacted it, the managers immediately went back in the frontline work. It was as if we hired six people.

Are you familiar with the concept of “Dunbar’s Number?” It’s the amount of people supposedly we can keep a relationship with. People theorize it is anywhere between 120-150. If and when Treehouse grows past that, does that make the no-manager rule unsustainable? 

It will be weird. I am definitely worried about that. W. L. Gore and Associates [creators of GoreTex] does it, with 9,000 or 10,000 employees and there have been no managers since 1958. The way they used to do it was by creating physical campuses. It’s going to be a challenge, but I guess I’d rather worry about that than all the political B.S. you know will be part of being big.

Is there any other thing you’re thinking about implementing that is non-traditional when it comes to company structure?

We’re thinking about exposing everyone’s salary, but that’s only because it will help everybody make a decision. For instance, if you want to set up a project and you add a bunch of people to it, you should have some sort of idea as to the cost of that. If you don’t understand that a developer is paid twice what a support person makes, you can’t make the decision unless you have all those facts. 

Many startups have “perks” like food or games around. How does that compare to what you’re doing?

We figure, hey, if you can create a company exactly how you wish it would be, then why not do it that way? We find that not all the traditional cheesy stuff like ping-pong table and a cafeteria matters, really – worker satisfaction is more related to doing something important.

How about you?

Would you work for a company with no managers?

More insights on: Leadership

Sean Blanda

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Sean is the Editor-in-Chief and Director of 99U. Find him on Twitter: @SeanBlanda.
load comments (39)
  • Anon

    My manager took an hour and a half lunch break, went home half an hour early and spent the day planning her extra marital affair and telling me to do things I’d already done. Yesterday she took 3 hours off. It seems her entire job is telling someone else what to do…when they are perfectly capable of telling themselves what to do.

    • Roche

      The no manager approach is sound in theory … but there are risks associated with it …. If the king is not healthy and absent for prolonged periods of time …. unstructured chaos will reign …. employee morale will dip and profits will plunge.

      • Michiel van der Blonk

        in the case of the above story there is still a king, you can even get fired. And if that person is sick, he’ll simply appoint another king. No need for hundreds of kings though.

  • Harald Schirmer

    very good approach – I’m trying hard to work on that “on eye-level” and transparent condition in my surrounding – it takes a lot of energy, people are afraid of letting go, giving responsibility, building trust, offering chances, not permanently under-estimating lower grades – but it is worth every minute trying …

  • http://holacracy.org/ Olivier Compagne

    I work with HolacracyOne, the company developing Holacracy, and I’d like to clarify that the treehouse system looks nothing like Holacracy. Holacracy is a very specific system with explicitly defined rules — and is NOT a flat structure…

    • http://teamtreehouse.com/ Ryan Carson

      FYI I never said we were a “Holacracy”.

      • http://holacracy.org/ Olivier Compagne

        Cool, good to know. Aside from the Holacracy thing – I’m very interested in your project management tools & practice. It’s great to see innovation in that specific area.

      • http://teamtreehouse.com/ Ryan Carson

        Are you guys a business? is it a similar model to Red Hat where you charge for support but the project is open source?

      • http://holacracy.org/ Olivier Compagne

        Yes, HolacracyOne is a business developing the system and helping companies adopt it. Holacracy itself, the system, is freely available at holacracy dot org slash constitution (sorry, links get marked as spam…), but it’s in creative commons license non-commercial and no-derivative, so I wouldn’t qualify it as open source per se. Aside from that, yes, we offer the system for free and charge for support.

    • Sean Blanda

      Ryan never specifically said “Holacracy” — and after reading through other companies and the constitution, I think you’re right. Article has been edited.

  • http://www.codemink.com/ CodeMink

    My vote : Yes, every company need managers. I cant say about startups but when it comes to big companies, then yes it need manager. http://codemink.com

  • BenguluruHuduga

    Nonsense. you are a slave to the manager !

    • Mahesh111

      Structure is created the moment you make people accountable because it immediately give rise to the question ” Accountable to what?” and hence the structure comes into being. You are left to decide about the quality of your comment.

      • BenguluruHuduga

        Structure / hierarchy stifles innovation. The creative ones never get the due because of the “process”. One needs to be accountable to oneself first. How / why do you think open source works ? Structure ? Crap. Most OSS software is better off than commercial software. Its run by a group of individuals who want better software ,not run on budgets !!

      • Mahesh111

        But by any stretch of imagination it can’t be said that OSS are entirely devoid of structure. Can there be a software that runs without code, code being the structure?

      • BenguluruHuduga

        Rubbish and probably coming from an individual who hasn’t written code. Firms particularly large ones like to formalize as it aids in less risk taking.Ones who are innovating, don’t care. They just do it. period. Everything in software is logic so yeah structure exists. But there should be no structure in how code is written ( formalized process )

      • Mahesh111

        I don’t think you really understand what is a structure and structure function relationship.

      • george

        I had to sign up to say what the hell are you talking about? The structure of my code has nothing to do with the structure of the organisation I build it in, even if I build it by myself it has structure but it doesn’t answer to anyone, it doesn’t get sign off or feel undervalued. Kindly stop talking about and devaluing my industry.

  • http://nicole-simon.eu nicolesimon

    The article has two parts. A description of what works and how with Treehouse and another part where it is suggested that we do not need managers – my answer is to that second part.

    Would I work for a company who has no managers? Hell no. And even Treehouse has managers, a lot of them: It has people who are working there who have reached the mental level of structuring their surrounding in a way and work in collaboration which each other which makes ‘management’ in the old sense expendable. Would I work with such people? Yes. But those are two *very* different things.

    tl;dr: The right people can work absolutely with no structure because they have structure in themselves. People without however will bring mediocre results at best. It is time to differentiate between those two and apply thinking fitting to the organization at hand / transformation in the work / goal for the future instead of throwing the baby out with the bath water.

    Working for one company and a few more with a specific small set of people, let’s gloss over simple things like size of corporation, existing problems and structures and just proclaim flat hierarchies / no managers as the solution – yeah. No.

    It is not the solution for everyone. I like to compare it to a similar ‘problem’ which makes my point a bit more easily instead of going into organization development discussions.

    The original barcamp was made by people not getting into foocamp. They where, as I like to call it, keynote speaker material on top conferences. Getting those people together and tell them “come unprepared and hold an awesome session” works absolutely great because all of them have been around long enough – they can come in with a hangover and deliver something stellar which will get everybody buzzing in the room. The majority of that group also was highly active, most likely all of them.

    In comparison today’s barcamp as I see them in Germany (I have heard similar from other countries) are done by ‘normal people’ who heard about the idea, liked it and want to participate. It is more community college / night school level. They come in more as a spectator, and most likely have not been presenting in front of a crowd for a long time let alone have experience. They heard before “unconference! nobody needs strucure!” and translate that also to no preparation.

    The results are mediocre at best. They still are excited because it is something different. But it is like amateurs thinking they play on olympic levels. But is it not the solution. Different folks and organizations need different approaches.

    “Instead of advancing the company using top-down directives from leadership, the company organizes around projects proposed by employees using collaboration software. Employees propose the projects they want to see completed and, if enough coworkers join, they can get started.”

    Let’s try that approach just like this on a production line. A shop which has to have opening times and needs personal there when they have to be there and not when they feel like it. Where there is more than enough parts of a job which are not as sexy as in a company like this. A worldwide corporation with >500 people.

    Again, I am not at all debating that it works for some company types and situations, I am sure it is. I also strongly believe that many corporations and SMB could profit from the ideas behind it. And as long as numbers look good, everybody will be happy to accept this approach.

    In a crisis, a company like treehouse also is better prepared than others – going back to the above example it is again the keynote speaker material not the night school person dealing with it.

    The lesson taken from that is not to through out management but start simpler and start looking at the own corporation / company with professional eyes of somebody who knows what they are doing. Which usually is the first problem – i cannot count the number of times working over the years with companies where even the sales people where not capable of describing their target customer. Or their companies mission / goal / products (I so wish I was joking). Throwing these kind of companies into the new hype of ‘no management’ is useless.

    The other side are startups – they breathe these articles in and start making even more foolish choices. I don’t say you need to have written statements and job descriptions for every person in the company – but the “flat!” people take this as a blanque check to go “oh you have a job description but I do not really know what you should do, or what your goals are – but we want to be successful!!”. you do not need reporting structures and waste time on that – but those are just an extension of “who is doing what and how do we keep that together”.

    I had talks with people telling me how they loved agile development and that they needed a daily jour-fix because otherwise the company could not work together – having so much going on that you move forward at a stellar speed is one thing. having a 10 people department in traditional corporate world not being able to get together and work on a long time project without a daily jour fix is just poor planning and execution – and “agile” is just a new excuse.

  • Leslie F. Miller

    Interesting. But it’s a main TENET, not tenant. You’re not renting an apartment. (If you edit, please delete my comment.)

    Grammar Manager

    • Dave

      First thing I noticed too! You don’t need tenants unless you are a rent-seeking manager, which clearly Carson is not :)

  • Shaun Chavis

    I love this concept and I’d work for a company with this structure in a heartbeat. (Maybe it’s because I’m a Quaker; we have no clergy and we make decisions by consensus.) I think this approach treats professionals like professionals (and adults). I think it demands more of the employee; but I also think it is more rewarding.

  • MerzInTally

    This is such an exciting article! I have worked at a private company for a very long time and over the years it’s operated in different ways – but always with one single head and sometimes with a cadre of middle managers. The most enjoyable times at work have always been with the leanest staff when everyone’s contributions MATTER. Reading about the possibility of business models like this, and citations of successes like GoreTex, is very encouraging.

  • http://www.mindthemix.com/ Federico Montemurro

    Titles not titles at the end responsibilities still exists and you have to deal with humans (egos, personalities, etc.)

  • Robyn McIntyre

    You don’t really need managers if you have leaders. It’s when no one is willing to step up and say, “we need to stop talking about this and take some action” that group action can fail.

  • Steve Lawrence

    “My main tenant as an owner is to treat other people like I want to be treated”…I think you meant to say “My main tenet.” Tenants rent apartments.

  • sparky888

    I love the concept. How do people decide who gets compensated, and at one amount?

    Oh, and I don’t think you ever worked for Steve Jobs. Sure, Apple is relatively flat, but it was ruthlessly steered by Mr. Jobs. (I saw this first hand).

  • guest

    Hey, Sean–the word is JIBE not JIVE.

  • filmfwd

    I love working for a flat-managed company (Olark live chat). It’s definitely a bit chaotic and sometimes it feels harder to make things happen, but the huge benefit is that my contribution matters a lot and isn’t limited to a certain area just because of my job title. I also feel like I’ve had a lot of personal growth in learning to work with people without the structure of hierarchy. It helps that we have the principle of “assume good faith”- but that in and of itself reflects the nature of a flat structure versus managed enforcement of cooperation.

    Hiring is the most important part of this approach. We’ve doubled in size in the last year and even though it’s a challenge every time we hire someone to bring them in to the culture, the ultimate result is a solid team with common goals.

  • gjbloom

    There is a reason most businesses have evolved into the traditional hierarchy model. I strongly suspect Treehouse will not scale much beyond their current size without implementing some levels of hierarchy. At the very least, the communication will have to be channeled and abstracted. A fully-connected network quickly becomes overwhelming:

  • http://www.rickshawbags.com/ Chris Schroeder

    I agree with the premise from this article’s perspective of what a manager is, but often times, I find my role is a manager is really to help coach and develop employees and help them solve problems when they get stuck.

    For people who have experience at a company structured like Treehouse, do you find you can get the same collaboration and mentoring from other your other co-workers?

  • steve whetstone

    From what I understand, they describe the structure briefly in the article above.
    .
    No emails and they have another system (aka structure) that is more open called “flow” and “convoy” that does more than just email, it also creates a sort of on the fly ad-hoc quasi-permanant organization or more likely incentives for specific known beneficial communication patterns and structures. it’s description leads me to believe it is Quasi-permanent and also the workers have identities and history which is integrated into their flow and convoy systems which is a Quasi-permanent way of encouraging, evaluating, re-inforcing, and accountability.
    .

  • steve whetstone

    Thanks for the interesting article.
    .
    As a UX consultant I see a lot of my work is identifying and working with management stakeholders and the private nature of emails is a major hurdle for me in this task. Just finding out the skill sets or resume or incentives of the people involved can be politically touchy and often stops the stakeholder management aspects of my work from being successful. When the button does something the user dislikes, I have to figure who put the button in their and why it works the way it does before I start monkeying around with fixing it. If there’s a series of buttons that reflect a common problem such as missing functionality area, then I need to look for an institutional reason to address the institutional causes of the user experience concern.
    .
    Interestingly, Some of the places I work have a SharePoint intranet for company collaboration and SharePoint is intended to do something similar to what the author describes. It’s intent is to achieve a manager-light sort of organization by helping workers collaborate and manage themselves. Mostly it works by supplanting emails with ad-hoc group pages and message forums broken out by subject or some other way. Any thoughts on this topic? mostly SharePoint seems to be adopted by management heavy business sectors so I think it’s an interesting example to compare with.

  • Robert Randell

    I was intrigued by your uses of the ant picture, since of course ant societies work very well without overall managers. In Africa large ant hills maintain their temperature within very narrow limits much better than human designed structures. We spent centuries trying to find our hierarchical structures in insect societies to the point of calling their reproductive castes kings and queens. But there was no hierarchy to be found, each ant knows what it needs to do.

  • http://lusdesign.com/ Luisa Ambros

    I was thinking earlier: isn’t “to promote” some tallented people as a manager a waste of knowledge if one of the primary things about a good manager is to coordinate to achieve major objectives, not getting involved with the projects itself?

  • Rajkumar Pooniya

    The article is so interesting but in a MNC every employee wants to see himself in a first row .so many ideas are spread on every table if they get a chance to become like a pillar.Only the manger can either promote you or send back.

  • chuckblakeman

    I really enjoyed this article. My most recent book, “Why Employees are ALWAYS a Bad Idea”, is really about why managers are always a bad idea (they create employees – we want Stakeholders). This is not a fringe idea, but a mainstream tidal wave of change. Companies that want to hold on to the tired Industrial Age management practices that include dumb things like managers, employees, and time-based work will be left behind.

  • Wojtek

    This sounds really great! My Warsaw based company is going through some structure changes at the moment and i think we’ll try the “flat” approach.
    Can anyone recommend project management and collaboration software that would fit such a structure? We don’t have time, resources nor skills to create one of our own.

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