The Hierarchy
The Big Boss
You have to distinguish between the CEO and every other manager, or as well call them the Big Boss and Lesser Bosses.
The Big Boss could be any of,
- A founder (e.g., Steve Jobs, Jeff Bezos)
- A career Lesser Boss (e.g., Tim Cook, Andy Jassy) who is elevated to Big Boss.
- A monied type who elevates himself to Big Boss (e.g., Elon Musk).
The Big Boss sits at the top of the Fiat hierarchy, the boss of the Lesser Bosses.
The Lesser Bosses
No matter the size of the business, the Lesser Bosses compete with each other more or less furiously. There are exceptions to this, but this is the norm; the exceptions are few and far between.
The Big Boss
Rasing Capital
Raising capital is the job of the Big Boss, but oftentimes a Board member or two get it done. “We’ll help you with that.”
This always happens at the start of the business. Later it may happen when
- The Board pushes for growth and new investors are sought to provide the cash. If this is a down round, Board members agree to be diluted (i.e., to have their shares do down in value) given that without the extra cash they may be financially screwed.
- A Board member wants to partially cashout. He sells some of his shares to another investor and he, not the business, gets the cash
- If a Board member wants to fully cash out, the euphemism is that he is “leaving his Board seat to pursue other projects.”. The business may or may not get any cash out of these types of transactions.
Hiring
Putting together the Executive team is way up there in the Big Boss’ job description; it goes right under ”make money” for the Board and the stockholder.
If you are within striking distance of an IPO or some other “liquidity event,” you hire a bunch of people with bona fide credentials from well known companies. You name them CxOs because a big part of your IPO story is having “a strong team.”
If you are far from IPO, or past it, you want to hire an “effective” team, no matter how they go about it, even if they go about it ruthlessly. And when it comes to finances they will get you what you need one way or the other.
In a smaller company, the Big Boss’ main job is to raise money and set strategy. So, he hires an executive team who can take care of everything else. These folks are mostly competent and even nice (but they are their way of being neither).
Firing
It may be distasteful. It may be a mark against the Big Boss, “He made a mistake, he should have never hired such a duffus.” Or it may be something to be proud of, “He didn’t hesitate! This guy can really execute.” In any case, it is usually not a big deal as the Lesser Boss is given a generous severance in exchange for a signed promise not to sue the business.
Strategy
Whether they think of it or they “borrow” it from someone else, the Big Boss sets the strategy, which is how the company is going to grow the business and make a bigger profit.
The Lesser Bosses
Hiring
Except for their direct staff, the Lesser Bosses get involved in hiring just in case their boss asks. They really add no value to the process. In fact, they slow it down. After wasting a lot of time and effort accommodating the boss, and the delays that introduces, he does a very short “interview” and renders a final decision to hire or not. This happens after extensive interviewing by the team, people who know the subject matter well and are going to work with the candidate. Many Lesser Bosses go with the team’s decision, but others don’t, because “I didn’t like her… attitude… tattoos… questions.”
In a co-managed company, ∇ the people who are going to team up with the candidate make the final decision to hire or not. They may even do away with the interview altogether because the candidate is not just a vessel of cognitive skills, the rest of her comes along with it, and her contributions come from her whole person.
Firing
Firing is usually left to the Lesser Boss. Many of them dislike doing it, so they ignore it or postpone doing it until things come to a head. In a co-managed company, the team can eject a person and tell him the reasons why directly. No boss needed.
Mediating Conflict
The Lesser Bosses are often called to play referee. If there’s a conflict between people, he gets in the middle of it and does his best to arrive at a clean break. This general does not resolve the issue, not really, but everybody can go to their own corners to work.
In a co-managed company, either people resolve the issue themselves by bringing it up and talking through it, or they involve a third person (i.e., a tried) and the three of them resolve it. Additionally, they all learn new skills for how to resolve this type of issue and, more importantly, new language to keep it from becoming a problem.
Defending You from Other Bosses
Each department in a business is like a feudal dominion, with a castle in the middle surrounded by fields under its protection. It has a moat around it and you work the fields in exchange for protection (plus a paycheck in modern times). The would-be attackers are the other bosses, and sometimes the people, in the other castles… er… departments. The knight in white armor “defending” you is your boss. As you can imagine, this becomes an obstacle to collaboration and it has a major, negative impact on the business.
Implementing Tactics
Technically, the Lesser Bosses set the tactics to implement the Big Boss strategy.
In reality, the thing that counts the most is the financial goals. The grander strategy may or may not align with the profit-making goals, but when in doubt, make sure to meet the profit goals.
You are the proverbial cog and your job is to implement the profit-making goals.
Unfortunately, you usually have no idea and no way to find out how what you do connects to the profit-making goals, or the tactics, or the strategy. So, you fall back on doing whatever your boss says to do. Everything else is a black box to you (and oftentimes to the Lesser Bosses, too).
In a co-managed company, everything about the company is transparent. So you can figure out how what you do ties to your company’s sustainability (i.e., financials, strategy, tactics, etc.).
Other Things…
The Lesser Bosses are, in theory, responsible for many, many other things. Unfortunately, these things go undone or are done sporadically because the Lesser Bosses spend their time doing one thing or another for their bosses.
Disentangling Management
Other than creating an illusion of control, the Fiat hierarchy is hostile business. It makes innovation nearly impossible and a tremendous amount of money and effort is wasted on the hierarchy and “control theater.”
Radical-hierarchical companies are more efficient because they let go of the illusion of control and let people co-manage themselves. In any case, this and co-ownership is where all businesses are headed. The next stage of evolution is for businesses to transform to co-owned and co-managed companies.
| Hiring |
Except in the most bureaucratic businesses, hiring already is done by the hiring team; the Lesser Boss involvement is mostly a ritual and adds no value to this process. |
|---|---|
| Firing |
Firing can be done by the team as well. Learning to give feedback doesn’t come naturally, even to bosses. Today, we practice a language of competition and dominance and we need to learn a language of love, empathy, and support. And not just for “firing”, but in general. For a whole society, this is going to be a long process. But each company can do it more quickly by the process of acculturation. Among other things, this helps build trust more quickly. |
| Mediating Conflict |
Conflict mediation can be handled by triads. Training on the effect of language (see above), which is a reflection of ideology and habits. |
| Defending You from Other Bosses |
Without a hierarchy, there are no bosses competing for power, on the attack, or to be defended from. That particular source of stress is no more. Besides, without a hierarchy you don’t need to be “defended”. We all need to learn to take in what others say as feedback, something to learn from. Feedback is about us and about them. And, yes, this is different and will feel strange at first, but it is our chance to evolve. |
| Task assignments |
Without bosses, and with transparency, people can get together and figure things out on their own. As an added bonus, they can take into consideration what is more meaningful to them. People working together already have an Explicit Alignment to use as a guide. |
| One-on-ones |
Today, part of this ritual is to get a sense, through our boss, of how the hierarchy perceives you, what are your chances for promotion or a raise. In a co-managed company, anybody in your team can give you feedback on your way of relating to others or your work. Your chances of “getting a raise” is not up one person, your boss, but by your contributions. |
| Career development |
See Training, below, for improving your mastery of particular subjects. |
| Training |
People can train each other, mentor, give talks, etc. In our experience, this is very effective because people,
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| Team Health |
Lesser Bosses don’t measure teams‘ health. They don’t do it at all or, at best, they don't do it consistently. And, really, they don't have the tools (e.g., the language) to do it. Teams can do this themselves, but if they need to, they can form a triad with one or more people external to the team (i.e., triads are not limited to individuals, it can involve groups of people, too). |
ENDNOTES
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Matt Perez, Adrian Perez, Jose Leal. RADICAL COMPANIES: Without Bosses or Employees. 2021. <https://radicalcompanies.com>. Alternatively, you may want to read the shorter RADICAL COMPANIES: For the Impatient. <https://radicalcompanies.com/2022/05/03/radical-companies-for-the-impatient.html>.
