Why hierarchy used to work? It actually never did. Read interviews of the great company leaders from 70s and 80s and you’ll find out that they had to lay off plenty of people and upgrade their processes to survive.
But while leading businesses were still young in 1930s-1980s communication technologies were poor and free market was still open for practically any product and service.
So it was natural to delegate tasks and keep people responsible for their execution.
One had to rely on people.
Unlike today. People have fully transparent channels of communication. Companies utilize new tools every day. Business knowledge is sufficient to teach school kids within 1 week how to launch and run a startup (isn’t that the case with all of them today?).
Abundance of software helping us track time, tasks, people, financial transactions and our personal lives is overwhelming.
So why many companies still keep and scale hierarchies? The answer is simple: They think they don’t.
Here’s the classic example of hierarchy that prevents growth:
Company sells product. CEO needs his company to thrive. It means he wants to have Great product and Great sales. He asks CTO to make sure the product is always great.
CTO gathers SVPs of Marketing, Sales, Product, Engineering and Design and tells them to work together as peers to keep the product great. Marketing mostly works with Sales and field reps to ensure product will sell.
Engineering, Product and Design work together to ensure product is great.
Most people will look at the picture above and say: “Yep.. everything is correct. Product sources feature requirements from Marketing and Business. Engineering and Design follow Product Manager’s orders.”
Congratulations, you’ve just created another hierarchy and failed to deliver Great product!
The key is to look at that picture from above and see it as a flat surface, rather than a 2-dimensional model where one department is above the others. To help you visualize it I’ll flip the flat triangle.
This model is called: 3-legged stool.
Product Manager talks to Business and Marketing, gathers product ideas and wanna-haves. Then Product Manager, Graphic Designer and Lead Engineer sit down in a conference room and discuss the scope.
The key here is that all three departments at this stage can cross-question product requirements, criticize them, add more ideas to the pot and reject items for lack of business or technical expediency. Note, that all 3 are equal. They are not separate departments any more. They are joint contributors.
You might say: “Hey, that’s not fair! The other two can criticize Product’s work while Product can’t get involved in technical processes!”
And that’s exactly the point.
The result of Product’s work is approved 90-day backlog of particular items(not just epics) planned for upcoming releases and confirmed by both Engineering and Design. That backlog is not just confirmed by the 2, but they have both participated in its creation.
The result of Design’s work is to create actual screens for Engineering. Those screens must be approved by Product, Marketing and Engineering.
The result of Engineering’s effort is the actual product. And since it’s the most technically advanced part of product development cycle that requires niche technical knowledge and specific set of skills, it’s logical that neither of the two departments (Product and Design) could possibly contribute or alter technical decisions made by Engineering.
Not until development is done and product release is available. Then anyone can freely express their opinion about Engineering’s performance and quality.
Not before the release.
Of course these examples only prove that Product department is not aligned with the other 2, nor is it aligned with what company needs: always great product.
Because Product Managers are pushers (which is great). They tend to move faster than technical units and therefore they grow intolerant to outside opinions, contributions, processes, planning and detail clarification requests— the foundation of all successful product companies we know today.
Take a look at Spotify’s engineering setup which involves all 3 stool legs.
Every company is different. Bigger companies will find this model challenging. And that’s ok.
If you want to create healthy environment for your employees, build great products and keep sales high, you need to start aligning 3 legs of your company’s stool. Otherwise, by keeping hierarchy you will fertilize soil for conflicts, low motivation and, thus, weak product.
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