I predict the end of bloated, multi-layered corporates

This old structure that encourages heavy politics is just not competitive in this new world where AI and offshore teams are going to rule.

I was talking to a friend earlier in the week who works at one of the large SE Asian tech conglomerates.

He’d been there for a couple of years and was feeling very frustrated. His boss had left awhile back and he and his team were reporting to someone else that was from a different department.

That new manager only allocated about 30 minutes every week or two to the team and didn’t really understand what they were doing or care for that matter.

And the rest of the larger organization kind of understood that.

Which meant that he and his team were shit on at every turn. Because they didn’t have air cover.

He described being in a large meeting and having a member of another team unfairly blame them for many things with other teams chiming in. Basically because they knew that this was an uprotected team.

They were cannon fodder.

And so my friend was preparing to leave. Even though he was probably much better than most of the idiots there.

Just another day in the corporate world :)

This is just everyday politics in big companies

What I describe above happens ALL OF THE TIME in large corporates.

Particularly when a leader gets swapped for another leader. The people under the old leader lose their protection and are often left to fend for themselves. Some of them successfully, some of them less successfully and eventually leave or get shown the door.

Hundreds of books are written about how to operate in the corporate world to protect yourself in such situations.

Books like the “48 Rules of Power” etc.

I just find the whole thing so hilarious. Because almost all of the organizations that operate like this are probably going extinct in the coming years.

Times are a changing

In the past it made sense for corporations to have large organizations with layers of hierarchy. But i think the business case for this is rapidly disappearing with AI, offshore labor, etc.

As well as solid project management systems like Clickup, Asana, Monday, etc.

There is less need to have people ‘managing’ because a lot of the work is done by either AI or if it’s done by humans it is done in a very transparent, efficient way.

For example I find it easy to manage 20-40 folks directly myself when every task is a Clickup task and i’m following all of the updates.

I don’t need to hire a ‘manager’.

And if i expand too far it is better to just form a new team with a new lead that builds his own team. But he’s different from a ‘manager’ because i’d want to set it up as if it is its own independent operating unit with its own set of goals.

And small teams can get a LOT done. Particularly with how quick AI is progressing.

Entrepreneurs operate so differently

Being an entrepreneur now for the past four years I also see how much different it is on this side of the fence.

When it is your own company it doesn’t feel like work most of the time. You spend much more time, much more care, and it feels good.

You feel very motivated because the fruits of your labor directly dictate the success without any managers making a subjective decision.

When you hire people you also want them to feel the same way. And so the way I try to structure my relationships is such that they feel like mini-entrepreneurs.

They have their own goals/KPIs and have a lot of freedom in how they operate to achieve that goal.

Can it be done for everything? Probably not.

But still at this smaller scale it is easy to keep the stupid politics like I described above out of the equation.

Can large organizations operate much closer to the entrepreneurship model?

This is a question i’ve thought about fair bit.

Why can’t large organizations just be lots of smaller startups that have their own incentives and operate independently for the most part?

They transact with other startups in the organization but are also not forced to purchase their services from the other groups if they deem it uncompetitive.

For example if they don’t like the HR function provided by the group they can bring in some other service provider.

The Yandex Example

I saw a slightly less aggressive version of this when I was contracting for Yandex (Russian version of Google) back in 2019.

It was essentially a holding of lots of other companies like Yandex Market (ecommerce), Yandex Taxi (like Uber), Yandex Drive (car sharing), etc.

And each one had their own independent teams but used some shared services from the group.

They also had their own internal valuations that were audited each year. For example Yandex Taxi was valued very highly back then, let’s say $1 billion.

And everyone in Yandex Taxi could sell their shares at that valuation anytime they wanted. It was one of the reasons why the parking lot near the Yandex Taxi offices were full of Porsches back in 2019.

But I even think this is not aggressive enough as these component pieces get quite large and start having pretty significant politics anyway. For example I wouldn’t be surprised if Yandex Taxi had at least 300+ people back then.

And so I like setting a rule.

For example, no team can get larger than say 20 core members. And they need to operate according to a set system that prevents most politics from occurring (like my Beast Method).

You’re essentially trying to mimic modern warfare where the most effective fighting units are small like Navy SEAL teams. Each team can operate independently and continue to self optimized in a rapidly changing environment.

Unlike large, slow corporates who operate more like the Titanic.

Closing thoughts

In this article i’m trying to make the point that I think these bloated corporates with old school politics are heading towards extinction.

You have piles of people that are essentially incentivized to dump on each other. Because it often feels like a zero sum game.

If they dump on that other person than that person gets blamed when things are not going well. And let’s be honest… in these companies things are often not going well these days. Haha

So people are just gonna dump on each other more and more in an effort to survive as these large corporates wind down. A bit like the game musical chairs.

The key is in creating smaller independent teams that operate more like entrepreneurs. Not only will people work harder and smarter, but they will enjoy it a lot more.

Let’s see who makes the change. And who simply goes extinct :)