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Team Culture

Do We Really Need Managers?

How one company did away with its managers, and what happened next.


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?

Sean Blanda

Sean is the Editor-in-Chief and Director of 99U. Find him on Twitter: @SeanBlanda.

Comments (39)
  • http://www.scoop.it/t/daily-clippings/p/4016246785/2014/02/19/do-we-really-need-managers Do We Really Need Managers? | Daily Clippings |...

    […] How one company did away with its managers, and what happened next.  […]

  • 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://www.link-boucetta.de/do-we-really-need-managers-99u/ Do We Really Need Managers? – 99U | Link & Boucetta GmbH

    […] Do We Really Need Managers? – 99U. […]

  • http://www.gazetageek.com/management/do-we-really-need-managers-via-99u Do We Really Need Managers? via 99U - GazetaGeek

    […] See full story on 99u.com […]

  • 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.scoop.it/t/hr-innovatie-technology/p/4016286444/2014/02/20/do-we-really-need-managers-another-holacracy-example Do We Really Need Managers? another Holacracy e...

    […] How one company did away with its managers, and what happened next.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 “holacracy,” a completely flat organization chart with all middle management removed.  […]

  • 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

  • http://www.scoop.it/t/making-love-and-making-personal-branding/p/4016312672/2014/02/20/do-we-really-need-managers Do We Really Need Managers? | Making #love and ...

    […] How one company did away with its managers, and what happened next. 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.  […]

  • http://www.scoop.it/t/inspiring-thoughts-news-and-data-visuals/p/4016351926/2014/02/21/do-we-really-need-managers Do We Really Need Managers? | Digital reach | S...

    […] How one company did away with its managers, and what happened next.  […]

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    […] See on 99u.com […]

  • http://www.scoop.it/t/leadershipabc/p/4016357295/2014/02/21/do-we-really-need-managers Do We Really Need Managers? | LeadershipABC | S...

    […] 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?  […]

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    […] 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?  […]

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