Photo by Sergey Korolev.
Every founder we have ever met loves a flat org. If you line up a hundred founders and you ask them about the org structure they have in mind. The one that will scale with them as the org grows. The one that will ensure decisions get made quickly and we don’t get bogged down in a bunch of process and bureaucracy. They will all. All one hundred of them. Shrug and say, “We plan to keep it pretty flat.”
So it’s no surprise that Tyler Denk, UntitledPerson at CompanyName is making headlines this week for his own version of the shrug. Completing the top of his startup-founder bingo card, he started by professing a love for flat orgs, low hierarchy, and general preference for speed over slow. Not content to win with a row, brother then wrote a manifesto, compared the org to a professional sports team, and then posted the entire thing on LinkedIn. Apparently, in bingo, when they call every number on your card, it’s called a coverall.
We’ve seen this movie play out loads of times, and still, we understand the appeal. The org that was small and nimble when you started gets bigger. There are more stakeholders involved. Decisions that used to require a quick head-nod between founders now involve a never-ending series of meetings with a never-ending series of titles and a never-ending series of presentations from departments that didn’t even exist until a year ago. That does feel slow. And it does feel wasteful. No founder who cares about their company would or should want that.
The other part of the movie starts right around the time orgs pick up the phone to call us. The flat org is having a hard time getting things done. The founders are fundraising or traveling or otherwise unavailable and nothing has been set up to function without them. We’re not making decisions. We’re not shipping. We’re deadlocked. And no one outranks anyone else so while we can talk about what we think might be right, the only person who can say for sure is the person who announced that we were moving to a flat org in the first place. And that person is MIA.
Where executive onboarding takes a dark turn
The flat-org appeal/flat-org limitations conundrum isn’t new. If you’ve ever wondered why startup acquisitions have earn-out clauses and performance targets for founders, this is why. If your org is trained to function with you at the center and immediately after a buy-out you leave, that’s a very risky purchase. Much better to have you tied to the org while the grownups figure out how to implement some scalable process and decouple the business from your personhood. The word for this is derisking.
The really big orgs do a version of this on day one. If you’re taking over as CEO of a megacorp, be prepared to have some very sobering discussions about your untimely demise while signing your offer letter. Key Man Provisions are sometimes called Key Person Provisions and if you haven’t heard of them, you’ll be forgiven for thinking the concept is super macabre. They are an org’s way of saying to an incoming exec, “You will die. That’s not an affront. That’s a limitation of humans. And the org needs to keep going. So we gotta plan for that reality.” And then they send someone to take your blood, ask you a bunch of health and lifestyle questions, and then take out a big ol’ insurance policy on your behalf. Welcome to the team.
Partner-track orgs often have board-mandated succession planning. In these orgs, you can’t get to very senior levels without an answer for who takes over in your absence. This isn’t a theoretical exercise. It’s not a yes/no. Many boards require a specific name and detailed, multi-year development plan for every partner’s successor. And if you ask those orgs why they require that level of rigor, there’s always (always) at least one story of a time it went badly.
The more senior you get, the more you will be called upon to grapple with the relationship between you and the org and the org and you. For our UnnamedFriend above, the answer might be that there’s no space between the org and the self. For our partners on the cusp of retirement, it may be a decade-long process to make space between 80-hours-a-week-no-vacations and actually-ready-for-more-time-with-the-grandkids. And if this were just a neat psychological exercise, that might be ok. You could be one of the lucky few who have time to get everything to a neat and tidy spot before the shit hits the fan.
Or you might not.
A loaded god complex
This week NVIDIA employees are living the shit-hits-fan version. Whatever their roadmaps say, whatever deals they have in pipeline, they are currently in crisis-response mode. Our guess is that, organizationally, they’re probably operating at about 30-50% of regular productivity. Years ago, we wrote about how it feels to work in an org in crisis:
“When your organization is in crisis, you expect it to feel like panic. But it doesn’t. It feels hollow. Everyone comes to work but no one works. There’s no music playing in the office, and there’s no chatter in the kitchen. Instead of code or designs on people’s screens it’s news articles.”
Their CEO hasn’t gone anywhere, yet. He’s still there, in the seat, sending emails. Officially, he’s probably still managing 60 direct reports. Are they getting good management this week? And, if they aren’t, are their teams? Are they preparing themselves for the board to fire their boss, or for their boss to quit? In a normal org that would be a predictable outcome and responsible forethought for each NVIDIA executive. Is it even a possibility here, for an org like NVIDIA and a boss like Jensen? Have the two become so inextricably connected that the org has functionally lost that option?
If you made us bet, as we write this on Tuesday, we think Jensen leaving — by his own choice or someone else’s — is still the most likely outcome. The dust hasn’t settled yet, but some things are already clear. There will be some follow-on revelation for the board to respond to. And then probably another and another. If we’re right, every interview Jensen’s given about his radical approach to management will come back to haunt that organization. The power vacuum will be immense, the incentives for political behaviour will be off the charts. In another company, a responsible board would at least start to quietly prepare a plan B around the heir apparent. But what heir? Added to the list alongside one-on-ones and reasonable management loads, Jensen also doesn’t believe in succession planning.
Bingo.
Et tu?
Maybe it’s easy to see the folly at a distance. Maybe it’s obvious to you that when the CEO at the center of one of the most influential companies in history declares that he should manage 10x the normal executive management load, that’s ego. That when he says he doesn’t have time for one-on-ones, that he doesn’t believe in succession planning, that effectively his set of declared beliefs only makes room for the outcome where he’s at the middle of everything, that’s ego too. Maybe you can even see the counterfactual — that an ego-free version of leadership would involve giving the org the things he is best at, but aggressively trying to offload everything else to avoid becoming a single point of failure.
So how’s your team?
When we talk with leaders we sometimes ask them to make a list. A list of all the things they would delegate if they could. They fight about it and say there’s no one they can hand it to. That it requires weird esoteric knowledge. That their team is overloaded as it is. They don’t say that they are brilliant visionaries who need to be at the center of everything, but they do say that it’s much faster to just do it themselves.
Any of that ring a bell? Look we’re not trying to be shitty, but you don’t need to be a billionaire CEO to make yourself into a Key Person risk. You carrying load so that your team doesn’t have to is noble, sure fine. You dealing with the noise so that they can focus on the work, super cool of you. Right up until the day when you need to dip. And your team is left in the lurch, and no one knows where the keys are for that thing, or what the password is for the admin dashboard, or who should be taking over.
If the people you would hand it to have too much on their plates, help them with prioritization. You, as a team, whether you’re four people or four thousand, have an amount of work you’re trying to get done and a number of people to do it with. If it doesn’t all fit, then something’s gotta give. You might be tempted to answer, “Well the only thing that can give is my own sense of balance and healthy workload, so I’ll just martyr myself for the team and the org.” We get it. We’ve run that play ourselves, at times. But in the end it just makes you a gambler — betting your team’s health and your org’s success on your invincibility.
Delegation isn’t about going slower or being lazy. It’s you owning your role, protecting the org from unnecessary risk, and putting growth opportunities in front of your people. Succession planning isn’t morbid, or catastrophizing, it’s care. The most ego-free way to lead is to build for a day when you’re not there.
— Melissa & Johnathan
