Evolution after evolution

In the beginning - you are a mercenary. You work fulltime (somewhere more, somewhere less), once in a period you get income. It's simple. Then gradually you realize that you can work as much, but to get at least twice as much - you do an IP (who is smarter - immediately LLC). Then again the turn - if you do not do the work yourself, and focus on finding customers and managing - you can get more money, while increasing the rate of sleep. And so on, as long as there is only one department in charge. Further, management evolves, departments, divisions, directions, etc. appear.

If you focus on the pricing formula for each stage - with constant skuppe and quality of work, the cost of the project always increases (in general, this is the output price for the Customer, it is from this amount that it goes to infinity) regarding the money received by the final contractor.


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This fact means that small organizations will always have a place in the market, since large organizations cannot compete with them on equal terms because of the price. Can this be changed?

Reason for growth rate

Many blame the increase in the rate of increase in the reliability / probability of achieving a positive result for the project. So it is sold inside the company. Outside the song about the best specialists, the full development cycle, multi-stage testing, warranty, brand, etc., is sung to customers.

The reason is different - a multistage control system.



Increases the opacity of the control system. When you work alone, there is no such problem. Several assistants appear - permanent discomfort appears, expressed in the fact that the “obvious” solutions you need to explain to others for a long time and in detail. When information is transferred from one head to another, this information is inevitably deformed. Further more. It comes to the fact that you have not been involved in hiring for a long time, and you see only board members before you. As a result, until your decision reaches an ordinary employee - it will acquire various documents and explanations, which sometimes can change the purpose and essence of the original decision.

The management system becomes so complex that all the conditions are created for disagreeing the goals of the Contractors of all levels and critically reducing their motivation to solve the declared tasks. The most "talented" in this system are sophisticatedly pulling the blanket over themselves (inflating the state, the budget), skillfully using KPI (their own, foreign, companies) and regulatory documentation.

The matter is aggravated by the fact that the competences of the organization’s activities are distributed among its divisions for the most part without intersections, which creates a basis for the parasitic monopoly of some divisions over others. Monopoly units begin to become the narrow throat of the entire organization's production process and, at the same time, are extremely strongly motivated not to change the established order.

The standard path leads to a dead end

Any mismatch or low motivation is attempted to be treated with an increase in control. But controlling a non-transparent system, more like a black box, is hopeless. All new regulations, changes in regulations (sometimes, several times a day), new divisions (the same project office, department of corporate architecture, etc.) are being created ... The management structure is becoming more and more complex, more and more muddy. The time spent on agreeing something starts off scale. Ass Reith is growing. We put out the fire with gasoline.



In this situation, it is very difficult to calculate the real cost of work of specific departments. Accountants, of course, consider all without problems, introducing billions of coefficients (electricity, water, heat, lawyers, bukhs themselves, couriers, etc.), but in fact the business owner still does not understand how much, for example, the same system administrators and testers in the current quantity, how much benefit they bring, why they are in the current quantity - the process of optimization layoffs is constantly underway, which often does not depend on real need, but on the level of the head of the optimized department of presentation and public speaking.

What to do ?

I believe that in 30 years from now I will be writing a similar article praising a tough tree-like vertical of power based on a new round of technologies for controlling people's thinking. For example, by implanting electrodes into the brain, which will help to overcome corruption on the ground and increase motivation (although this concept may no longer be applicable).



At the present time we are very limited in the methods of invasive control. What we have:

• Administrative measures - something like KPI.
• Technical solutions - something like a lie detector.

Both tools are more likely to break up about the possibility of a “smart” person's mind. But the higher the position, the more “intelligent” person I would like to see there. But the smarter he is, the easier it is to circumvent the limitations that we put in order for him to concentrate more on the benefits for the company than on the benefits for himself. No exit…

There is an exit. As always, it is not in patches and fixes on top of the current implementation. It is necessary to change the architecture - to remove the multistage from the vertical of power, removing the opportunity and motivation on the ground to make it opaque and, as a result, expensive in the cost of ownership.
Whom we leave:

• The Board \ Shareholders - someone needs to make a profit. This will be the parent legal entity, which will participate in the capital of all other companies.
• Departments with direct performers. It is necessary to form a legal entity from each department (it is possible on the DOS in order to pay VAT), the General Director of which is to put the head of the department and give him a share of the profits (without share in capital). Be sure to limit the number of daughter (for example, 50 people), to eliminate the formation of a child monster.

Next, we incite competition - we allow our daughters to order services or render them to companies that are not part of the holding. For the final completion of the domestic monopoly, it is necessary to allow the formation of overlapping legal entities by competence. To prevent collusion, clones should be spread geographically.

Objectives achieved:

• The motivation to inflate the staff at the head of the unit immediately goes to zero.
  Previously, he tried to increase the staff by hook or by crook, as the wage fund and the number of units directly influenced the importance in the company, the bonus fund (usually it as a percentage of payroll), the probability of increase to the head of department (the increase often by sign - you can manage the largest department - manage all departments), etc. Now FOT is your personal expenditure item that lowers your immediate income.
• The motivation to tighten the blanket over yourself loses weight.
  There is no common blanket, but what you have is already yours.
• The motivation to mark the work in the "2 counters" disappears.
  In the absence of collusion, a high price will leave your legal entity without orders.
  This concerns not only prices, but also terms.
• Loyalty is no longer the only \ main parameter of a unit employee.
  Now you need to build a team as efficient as possible in terms of production.
• The contribution of each to the company's profits is no longer spread among thousands of other employees.
  How many have gained - received so much.
• In the case of a drawdown of resources \ terms, you can always ask the “clone” unit to help with the task, thereby multiplying the production capacity.

From this point on, it is possible for the Board, on the basis of statistics, to kill inefficient divisions, distributing the resources released to new organizations. Nothing prevents you from doing this automatically.

Visually present the proposed model of a business device like this: for example, people are soap, and organizations are soap bubbles. All these bubbles are governed by the "dad".



Or "mom".



By the way, our universe may have a similar structure ...