The Ultimate Corporation
April 29, 2008
The Ultimate Corporation is one that reinforces my excitement and happiness. I want to wake up in the morning turned on. No snooze button or other foot-dragging. What are the characteristics of a corporation that is not simply good, but great to work at?
Characteristic 1 (Foster community, avoid faction and alienation):
This is achieved through limited population. Many companies confuse growth with development. This results in bloat that eventually murders a company. I’ve thought over different optimal maximums for limiting growth which I’ve written about here and here. I think the number is somewhere below 150. And my current attitude is to let employees decide where that number lies under that maximum. Growth beyond this number necessitates a new business division to be physically isolated and separately run from the original seed company.
Characteristic 2 (Structure for creativity):
Have 20/80 splits of time on the hourly, weekly, and yearly scales. This means 20% of a person’s time every day is allotted to their own initiative. One day of their work week is exclusively for their own projects. Two months out of the year, they leave and are payed double their salary. Half of that goes to them, and the other is invested in a company idea of their choice. Those two months aren’t enough time to start a company, but they are enough to get the ball rolling, and to see if the project fails or succeeds. If it fails, they return. If it succeeds, we either spin them off into a new company or if it makes sense, absorb the project into the main body.
Characteristic 3 (Create trust through transparency):
Everyone’s wages are transparent to everyone else in the company. If someone isn’t pulling their weight and getting payed a lot, then it becomes obvious they should decrease their pay, or be fired. If the CEO is getting payed one thousand times what the janitor earns, then it is obvious that something is wrong (Or maybe the CEO is generating a billion dollars in revenue single-handedly, and is justified, however unlikely, in such pay).
Characteristic 4 (Acknowledge dynamic rhythms)
Let people get to work when they want and leave when they want, as constrained by the necessity of synchronous times for socialization and laboring. Employees decide this for themselves. Moderated by an appreciation for safety, this incentivizes speedy work, thus reducing costs.
Characteristic 5 (Profit is health, so make sure everyone knows it)
Employees get 33% of the profit the company makes. It’s harder to hire someone useless if you can see them eating your bonus.
Characteristic 6 (People work best under leaders they choose)
Employees elect their own bosses. Either from peers, or from outside the company. If the boss isn’t doing a good job, the employees oust him.
This article was inspired by many companies, including Gore Associates, Semco, Google, and HP.
On a tangential note, I recently read the HP Way, and though the book’s forward has the occasional vacuous corporate speak, the rest of the book is quite good. I did not know that HP essentially started off boot-strapping, rather they started off with a general idea of how they wanted the corporation to be. What their values were. Of course they knew they would be heading in the electronics direction since they had both been students of radio technology, but it’s not like they had a specific product in mind. That approach, more than anything, is what inspired this post. After all, as a self-interested party, it is about what a company does for me, and a product is only part of that.