Posts Tagged‘bureaucracy’

On Valve’s Corporate Structure (Or Lack Thereof).

I was a big believer in the typical corporate structure for a very long time, mostly because I wanted to be the one at the top of it. There’s something attractive about being the one at the top and for quite a long time I tried to position my career in such a way that I could become an executive in some nameless company at an undetermined point in the future. I didn’t realize how bad I was at the whole management thing after I killed my university project, no it took me another 2 years to figure out that being at the top of a corporate structure wasn’t for me. I needed to be the one building things.

That’s not to say I can’t succeed in such structures myself, far from it. Being in Australia’s capital city, a town that is basically a giant shrine to bureaucracy, I’ve come to learn how to operate within traditional management structures in a such a way so that I have an incredible amount of freedom whilst also staying within the confines of my designated role. Sure I might not be able to simply up and change my job whenever I feel like it but I’ve rarely felt my creative freedom restrained when it comes to solving the various problems that get thrown my way. Still I’ve always been fascinated with non-traditional management structures and yesterday I came across an incredibly novel one.

It was that of the game development company Valve.

Yesterday one of my long time friends linked me to Valve’s new starter guide book, a typical document you’d expect from pretty much any organisation. It made for some incredibly fascinating reading mostly because it’s unlike any other that I’ve read before. Where there’s usually pictures of organisational charts, links to company policies and reams of out dated information there was instead a comprehensive guide to how Valve functions as a company and how all the employees fit into it. Astonishingly the biggest revelation in there, for me at least,  was that there is in essence no organisational structure at all.

For someone who cut his teeth in a world ruled by bureaucracy such an idea seems incredibly foreign, so much so I initially struggled to figure out how it would work. I mean how does anyone get any work done if there isn’t someone controlling the whole process from the top? As it turns out the process mimics what I envision happens when a lot of talented people get together: ideas start circulating and once they reach a critical mass of supporters they form a cohesive group in order to achieve that vision. Valve in that sense is a kind of idea incubator that enables their employees to chase their passions and should those passions resonate with others it will find its way into reality.

That to me feels like an inspired way of creating a company. The guide admits that whilst this idea works for Valve they’re not sure it would work for everyone as rogue agents operating in such an environment can do incredible amounts of damage. However when you note that Valve makes more profit per employee than Apple or Google  then you have to figure that their process has some merit to it. Being fully privately owned also helps them quite a bit as I’m sure that share holders would be uncomfortable with a company that seems to be in a constant flux.

Would I start a company with a mantra like Valves? I definitely believe in some of the core principles (like hiring people smarter than you) and I do tend to favor less management than more so I could see some form of it working for a company that I’d like to start. Maybe it’s just the residual “I need to be at the top” mentality inside me that’s having trouble letting go of the idea but Valve’s way of doing business seems a lot better than the way I’ve been thinking about it.

Gingrich, Moon Colonies and the Limitations of the Private Sector.

I don’t pretend to be all up on American politics, I look to much more intelligent people than I for understanding of those matters, but if there’s one thing that I know inside and out its space and the industry that surrounds it in the USA. As it’s campaign time now in the USA presidential hopefuls turn to high rhetoric and sweeping promises in order to win votes for their elections and the space program is not immune to this. Indeed it seems that NASA is most often used as a rhetorical tool that ends up under-delivering on its promises, mostly because those promises aren’t backed up with the appropriate funding.

Jumping back a presidency you can see why this was so, with George Bush’s vision for space exploration that had us returning to the moon by 2020. Instead of adding additional funding to complete those goals and all of those already set out for NASA much of the vision was funded out of cancelling other projects, like the Shuttle and their involvement with the International Space Station. What this resulted in was a program that was under-funded and ultimately impinged heavily on NASA’s ability to conduct many of their other core directives. The VSE was then replaced by the Obama administration which had a larger focus on building core space exploration infrastructure whilst out-sourcing rudimentary activities to the private sector, a much better direction for NASA to head in.

Newt Gingrich, current candidate for the Republican nomination, made some sweeping statements about how he’d reform NASA and see Bush’s original vision achieved. He would see a permanent moon base by 2020, a good chunk of NASA’s budget allocated for private incentives and a culling of some of the bureaucracy. They’re ambitious goals, especially considering that Bush made similar ones almost a decade prior that are no where close to being achieved. Still there are some good ideas contained within his vision, but a whole lot more that just show a total lack of understanding.

As always Neil deGrasse Tyson does a much better job of tearing it down than I ever could:

Neil hits on a point that I’ve long held true: NASA should be charged with advancing space frontiers and the private sector should be tasked with the things that are now routine. We’re already seeing that kind of industry develop what with companies like SpaceX gearing up to resupply the ISS with several others developing along the same lines. This is where the private industry does well but it does not do well in pushing the frontier forward. That’s an inherently risky venture, one that’s very unlikely to be undertaken by any private agency. Advancing the frontier is the realm of the government and NASA is the agency to do it.

Where I do agree with Newt though is the slimming down of the NASA bureaucracy. Much of the costs incurred by the Shuttle program was the standing army of people it had, not the actual launches themselves. The original plan of launching often, up to 50 missions per year, would have drastically reduced the impact this standing army had on the cost per launch of the Shuttle. With the cancellation of the shuttle program much of that will have already been cut but NASA is still quite a large agency. How that would be achieved  is left as an exercise to the reader.

Extraordinary ideas require extraordinary amounts of support and whilst I’d love to believe that Gingrich would follow through with this idea I’ve seen how ideas like this have panned out in the past. Thankfully, with or without Gingrich’s interference, the private space industry is setting itself up as being a viable replacement for the rudimentary activities that NASA needs not bother themselves with any more. What I’d like to see now is Obama’s vision for NASA has changed since he cancelled constellation and whether or not he falls victim to the same high rhetoric trap of over-promising and then not support the vision.

Right Sized Organisations.

Today I started my new job. Along with the typical first day awkwardness there was also the information overload that I always seem to get. There’s just so many new things to remember, and I know that I’ve already forgotten at least half of my new work mate’s names. Still my new work place is a great example of what I used to believe was just an executive speak term, but it seems it can actually exist.

Way back in the good old days you’d always hear of companies down sizing workforces due to automation or a down market. Over time the word downsizing became something of a black word and managers sought to conjure up a couple euphemisms so that they could speak about firing a large portion of their workforce and make it sound like a positive thing. Enter the term right sizing where management could say that they weren’t particularly looking to down size, no they were just trying to find the most optimal size for the organisation. Most people would hear that and think that everything was going to be OK, only to get hit just as hard. It seems in recent times that employers are now more direct with their employees and don’t try to beat around the bush anymore, which is probably for the best.

Austrade however is a great example of what I would class a right sized organisation. The total workforce is about 1000 employees worldwide with an infrastructure to match. In terms of technical progression they’re far and away the most advanced of any I’ve worked for, even if I do disagree with some of their choices. There are two major factors at play in this:

  • Lack of unnecessary bureaucracy: In an organisation of 1000 people you require a fair amount of managerial staff to keep everything running smoothly. However, you can’t go the whole hog and copy a large corporate structure as that would probably put more than 50% of the workforce into management. This size keeps the bureaucracy at that optimal point, making sure that the managers aren’t overloaded (like they are in smaller organisations) or completely unnecessary (like in big ones).
  • Funding: This is where Austrade shines. Whilst I have no idea of their current budget they appear to be extremely well funded for an organisation of their size. This not only allows them implement some of the coolest tech around (most of their fleet is windows 2008) but also lets them hire in the talent they need. I can’t tell you how many times I’ve worked in smaller environments and had to fight to get the right person in to do some work that I wasn’t skilled in myself. You don’t get this problem in larger organisations, but you’ll be fighting the red tape for a couple weeks to get it done.

Overall my first impressions are extremely good and I’m looking forward to the challenges that face me ahead. My direct manager has some big plans that he wants to get done, and they’ve already put me to work on achieving their goals.

It’s nice to feel wanted and useful on your first day 🙂

Bigger is not Always Better.

I used to have a lot of pride in the idea of big corporations. After spending much of my life working for the public service (and indeed I still am although in a different capacity) and lamenting at the inefficiencies the private sector looked like the greenest pastures I’d ever thought of. It was then interesting to note that when it came time for me to make the jump into the private sector my initial impressions were pretty much as I had expected. After a while though it all started to morph into the same story I had experienced for the past few years.

Take any large organisation and the one thing you’ll notice is the increase in bureaucracy and this is not necessarily a bad thing. As organisations grow larger they will require more people to lead and facilitate communication between disparate sections. However what I traditionally saw in the public service was that restructures often caused redundant positions to retained instead of removed. This often lead to the too many chiefs problem where you get a lot of people who are in charge of something or someone which tips the management to underling ratio unfavourably. This is not to say I didn’t see the same thing happen in the private sector, it was just less common as when you’re trying to turn a profit from your business it becomes much easier to remove those people who aren’t really adding value to the business.

More recently I’ve encountered this in my own personal financial matters. A couple years ago my fiancée and I took the plunge and bought our first house here in Canberra. The process was actually pretty easy for us and we managed to find our beautiful home in the first week, although we held off making an offer for a while to make sure it was the one we wanted. After a couple quick signatures and a couple of phone calls to our broker the process was over and done with in a matter of weeks. Needless to say we were pretty impressed with everyone involved.

Naively believing that it would be the same deal the second time around we took the plunge yet again to buy an investment property. Now I know most people would be telling us we’re crazy for trying this (I did the figures, and believe me it still surprises me how good an idea this was) but we went ahead anyway. We found a beautiful place that would rent fantastically which unfortunately fell through. We since then found another house which was in good shape for its age and was in a great location. So we went ahead and decided to purchase.

Queue the last 2 months of my life spent dealing with the bureaucracy that is one of the big 4 banks of Australia. Our first loan was from a smaller bank that was from outside of our state and was a painless process. Our new bank had so many different sections that communications between myself, my broker and the bank would usually hit at least 3~4 different sections, all of which were responsible for different things. Not only was settlement delayed over a month because of a simple question I asked they also lost several critical loan documents twice over, something I’d never experienced before from a professional institution (let alone a bank). I was left pining for the smaller banks, at least then there would only be one central location that dealt with everything.

And so marked the end of the idea that a bigger corporation could do something better. It seems that there’s a sort of bell curve phenomenon going on here. When you’re too small you can’t do all the things that the big guys do. Once you’re at the peak you’re doing just as well as the big guys without the inefficiencies. After that it’s all down hill and whilst your company might be more successful you’ve traded in your efficiency to achieve that. It does keep the stock holders happy however.

I guess now its time for me to put my money where my mouth is and start my own company and do better then them. I’ll take the easy route out and blame the global financial crisis for it instead 🙂