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Comment by yosefk | Hacker News Reader

Author here - I'm simultaneously quite pessimistic about, and very interested in heterodox organizational structures and especially real-world stories about them. I feel that failure or regression to the mean are quite likely and scaling or replicating success stories is very hard, but I am almost certain things will evolve beyond the current status quo eventually, just really not sure when and how.

So thank you very much for sharing and recommendations for further reading will be much appreciated!

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I put together a "High Performance Organizations Reading List" which includes a reference to "Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness" by Frédéric Laloux. You and "LeFantome" who wrote about Creo might find that book and other resources there of interest. Laloux's book provides examples of various companies with better management. https://github.com/pdfernhout/High-Performance-Organizations...

Better and healthier organizations are possible, as Laloux writes about. They are rare though -- and difficult to sustain in our current Western society. As with Creo, you definitely need enlightened management or enlightened major shareholders to "hold the space" as Laloux writes.

I have a theory that organizations that grow fast and scale well all have this “cellular model” at their core.

Investment bank trading desks in the pre-2008 era, partnership at the big strategy consulting firms and even “multi-strategy hedge funds” now are actually all collections of very incentive aligned businesses. They share the Creo quality of making lots of millionaires and people looking back on their time there as one of great freedom and achievement.

In all these places, employees are paid according to the revenue they generate, with seemingly no ceiling to what you can take home. It is true that the size of any one cell doesn’t scale beyond a small number of people. But all the organisations I mentioned above scale by having units tackling small pieces of vast markets.

The main lesson I took away from reading “Barbarians at the Gate” is that big companies hugely suffer from the principal agent problem, where management is mostly out to enrich themselves at the expense of shareholders and employees (sometimes). This looting is however only possible at a company that was established by a founder with a deep vision and passion for the product and has set up systems and culture that generates sufficient cash for the professional management to leech off.

What I have not read yet is a systematic study of these “cellular organizations” and what the common features are that make them successful. My guess is that the key is that each “unit” or “cell” has measurable economics that makes it possible to share the economic value over a sustained period of time. A bit like why sales people get paid a lot.

Agreed on cellular, but life is not a picture, rather a movie… what works at a stage starts attracting people, and eventually you let the wrong people in. A bit like the hype curve. These wrong people start poisoning internal processes and culture, seeking to cash out. And then the model blows up.

The migration of shitheads from Wall Street 80s 90s to Silicon Valley - technobros is for me a solid example of this.

Indeed, an organism can only survive long enough if it can resist infection. For this, an organization should be openly hostile to certain forms of conduct, and should have a way to expel people who bring in wrong values, especially in management.

This is a really hard problem, due to its influence on the morale, and the danger of weaponization of these mechanisms by bad actors.

And don’t forget, people change too, sometimes becoming misaligned over time. Maybe that’s a little like cancer. Org resilience is hard to model.

I also worked at a company that was similar to the Creo story above.

This was a High Frequency Market making company, total employees ~ 250. "Flat" management, nobody had titles, just responsibilities. Everyone understood the mission and goals. Everyone was highly compensated and empowered to make important decisions without explicit approval.

The whole thing fell apart when the company grew and finally failed when merged with another larger competitor.

These great orgs only last when they are kept small.

Perhaps total size isn't as important as ratio of onboarding.

It’s definitely size.

It’s much harder to maintain a shared vision among 20 people than it is for 10.

It get exponentially harder as you add more people.

Since a shared vision becomes hard to maintain, only those with the vision (read: managers and leadership) can make decisions.

> I feel that failure or regression to the mean are quite likely

i suspect that these failures are a failure for humans to adapt to a larger herd than the traditional tribal size - anything beyond a couple hundred people max.

Have you ever read the book "Loonshots" There's an entire chapter about how primitive human societies probably maxed out at about 150 individuals. Companies that exceed this headcount basically need to change themselves into highly hierarchical organizations, and many companies die in this transition.

I went through this stage with a smaller company and there's definitely this point where you no longer know everyone and things change. Creo however did manage to scale this well beyond 150 people. You don't necessarily need a lot of hierarchy but you do need to figure out a structure. Creo always had a hierarchy, it wasn't like Valve or something. It's just how things worked within that hierarchy.

I experienced this as two phases of growth in the path from ~100 people to ~15000 people: the first phase where you don’t know everyone and the second one where you don’t even know every department/major project.

Note that Dunbar's number (150) is quite controversial:

https://www.nytimes.com/2021/05/11/science/dunbars-number-de...

The observation that there is a (very) strong statistical correlation between cranium and social size is an interesting and correct observation.

That much is true and uncontroversial.

What the article takes issue with is the exact number of 150, which can vary from person to person. But really, the criticism entirely misses the point. The number is just a rule of thumb derived from extrapolation. It's not a hard and fast rule like "You can only have 150 friends". Obviously.

Perhaps it should be something like cranial volume / body volume, or else we'd expect whales and dolphins to have massive tribe sizes, yet they typically hang with something like 20 peers.

150 is Dunbar's number, made by extrapolating a monkey species tribe size / brain size correlation to human brain size. Something interesting to think about, but not exactly hard science.

The book Loonshots says as much. Extrapolating from monkey brain sizes to human social interactions is a bit reminiscent of phrenology IMO, but it is an interesting observation. Anecdotally, I've found it to hold true, particularly in startup land when companies transition into blitzscaling hypergrowth.

At Meta, we collected tons of real world data to pretty definitively prove this is true. Humans can only really relate to about that many others a time. And most people have about 5 others that they are actually close with.

Oh my god, this number lines up so perfectly with my experience at various companies.

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