Pratyush Mittal
Hobby coder and a stock investor.

19th July 2022

Organisational Structures

I love reading how software companies work.

We are a very small tech team at Screener. Just 4-5 of us. Yet it becomes chaotic sometimes.

At the same time, there are companies which have 10s, 100s and 1000s of developers. They have fabulous products and keep rolling out new features. I admire them and try to learn a few tricks from them. About how they distribute work, how they keep the codebase sane and how they drive innovation.

These are few of the learnings and mental models from various books.

1. The E-Myth Revisited
This book introduced me to the concept of creating franchisees. It prescribes methods for creating companies like McDonalds, Tanishq, HDFC, Hiltons etc. The fundamental concept is to "make ordinary people do extraordinary things." It does so by creating systems and having manuals for everything.

It recommends having a "functional prototype" where you do all the experiments. Then you observe and document all the processes, create an organisation chart and properly assign the responsibilities. This functional prototype is then distributed and scaled as franchisees.

2. Netflix
The Netflix culture is totally opposite of The E-Myth. They believe that system driven companies fail in long run because they are unable to adapt to changes. They rather believe in hiring extraordinary people who can "use good judgement." They don't have any spending controls and very few signing controls.

This is in the lines of hiring the best, giving them independence and paying the highest.

3. Accidental Empires
This is one of my favourite books. Though it is not a management book, it does have a few chapters around structures.

It recommends organising companies like Police, Army and Commandoes. A company needs a large team of police who manage existing products (existing cities). An army of strategists who plan new territories. And a team of commandoes who actually go and conquer those territories.

4. Creativity Inc
Ed Catmull has worked all his way from being an animator to being the head of Pixar. He closely studied various working styles and shared them in this wonderful book.

Two of his major takeaways were:
1. Hiring people better than yourself
2. Putting quality first

Ed shares about multiple instances where their stories were not taking proper shape. Hiring the best story tellers, the best animators and the sharpest minds helped them achieve the best. As a manager, this required him putting his own insecurities away, and hire people more accompanied than himself.

Another insight that Ed shares is about the focus on quality. The Japanese manufacturing system allowed anyone in the assembly line to stop the conveyor belt. They encouraged (and expected) workers to halt production if they found any defect.
This is an important part of Pixar culture. Though they have a hierarchy, everyone in the company is encouraged to take responsibility without requiring a permission.

5. The CEO Factory
Saw this tweet about Unilever's organisation style.

They classify their team into Mavericks, Company Men and Rogues. The Mavericks are the creators. They are introvert and like to work alone. The Company Men are team players. The Rogues are high on energy but put their short-term self-interests first.

Unilever tries to encourage Mavericks and the Company Men. While Company Men climb to the very top, the Mavericks become the legends in the company's folklore. Rogues rarely make it past middle management.

This is a good way to think about the performances of individual employees.

6. Mythical Man Month
I found this book most relatable. It focuses on product unity.

The book gives 2 analogies for organising and delegating work:
1. The Surgeon Way
2. The Architect Way

The surgeons way works great for small teams. We have a surgeon working on the core problem. There is a co-pilot, with whom the surgeon discusses everything. However, the final decisions rest with the surgeon. The rest of the team helps surgeon do their best work.

The architect way works great for larger teams where the work is divided. It is very similar to how an architect works on a building. They provide the blueprints and idealise the whole project. They define the interfaces that the user will ultimately use. They act on behalf of the user. At the same time, they restrain from dictating the implementation. The implementers use their creativity and create the given requirements.

Of all the above books, I found Mythical Man Month the most actionable. It has covered all the aspects of software programming in a wonderful way.

I personally admire Warren Buffett's way of working. At 91 years of age, being richest person, his office still has less than 20 people. His calendars remain empty, and he gets to do what he enjoys the most.

The other structure that I admire is the open-source culture. Projects like Django have not only lasted but thrived without having any "leaders." They attract people who love the craft and have a common pain. This is the kind of culture I would like to have!