I came across this article from the BBC the other day and it absolutely fascinated me. The article focuses on a Swedish software firm , Crisp, and their rather innovative approach to how their business is structured.
Crisp doesn’t have a CEO.
Yassal Sundman, a developer at the firm, explains: “We said, ‘what if we had nobody as our next CEO – what would that look like?’ And then we went through an exercise and listed down the things that the CEO does.” The staff decided that many of the chief executive’s responsibilities overlapped with those of the board, while other roles could be shared among other employees. “When we looked at it we had nothing left in the CEO column, and we said, ‘all right, why don’t we try it out?'” says Ms Sundman.
This is something that I have long suspected about the business world–that in many cases, the boss is completely superfluous. More on that in a bit. So what does a workplace without a designated leader look like?
Crisp holds four-day meetings for all staff two to three times a year. They are used to making decisions on issues that affect everyone, such as an office move, but workers are encouraged to make decisions themselves at other times. It also still has a board – a legal requirement – and this can be used as a last resort to resolve issues if something is not working.
Imagine that, the people who are actually doing the work are making the decisions! Together!
Henrik Kniberg, an organisational coach at the firm, argues that not having to ask a boss for decisions on projects or budgets means the firm can respond faster. “If you want to get something done, you stand up and start driving that,” he says. Yet Mr Kniberg stresses that not having to ask permission does not remove the need for staff to discuss issues or bounce ideas off each other. Because they are all in charge, workers are more motivated, he argues. Crisp regularly measures staff satisfaction, and the average is about 4.1 out of five.
Who would have guessed that giving the worker bees more freedom and self-determination would lead to a happier and more agile workforce? Truly shocking.
What I like about this article is that, for me at least, it dispels some long held myths that people have about business that they apply to their politics. There’s this idea that business is always better at everything than government. I’ve said for years that this patently false for a variety of reasons, but I think this article really drive home on central point:
Businesses can be just as bloated, top-heavy, and overly-administrative as the worst government you can think of. The equivalent of bureaucracy is alive and well in the private sector, and it’s just as detrimental.
I’m not sure how many presidents, vice presidents, junior vice presidents, CFOs and CEOs a company needs, but I’m willing to bet that, as this article from the BBC suggests, the answer is probably “None of them.”
The average CEO in 2014 made $22.6 million dollars per year. That’s a pretty tidy sum for a position, that, if Crisp’s example is any indication of, is essentially worthless. What’s more, that year CEO salaries increased almost 9%–way ahead of the 2.4% that the rest of the economy grew. And a 2000 study found that performance is a weak indicator of CEO compensation. The best predictor of CEO salary was the size of the company–no matter how terrible of a job they did. I’m sure everyone remembers all of those Wall St. folks that gave themselves huge bonuses after they collapsed the economy? The numbers are all here for you to take a look at.
And then there’s the lovely ‘golden parachute’ that we all hear about so much, which sounds like something Donald Trump would pay Russian hookers for, but is really just a giant check they give the top brass upon retirement. Here’s a list of the top 20 golden parachutes according to Bloomberg. I’ll recreate the top five for you here:
- Steve Wynn (Wynn Resorts): $358,134,747
- David Simon (Simon Property Group): $302,425,834
- John Hammergren (McKesson): $198,150,788
- David Zaslav (Discovery Communications): $161,119,864
- Brent Saunders (Allergan): $140,672,343
Man, what a great deal: getting paid tens of millions of dollars a year no matter how poorly you perform…and then they give you HUNDREDS OF MILLIONS when you retire!
What a fucking joke.
How many billions of dollars are wasted every year on executives that don’t do shit? Billions that could be reinvested in the company or the employees. While everyone else’s hours and benefits are slashed because of taxes or Obamacare or whatever bullshit line they throw out, the CEO gets to retire with hundreds of millions of dollars in his pocket. Notice how it’s never the top earners that are asked to tighten their belts during the lean times?
But why is it this bad? How do these salaries get set? Well, in many companies, executive compensation is set by the board of directors. And who’s on the board? You guessed it–all of the executives. Executive salaries are out of control and keep going up despite poor job performance because they’re the ones giving themselves the raises and the golden parachutes. Pretty convenient, huh? This article in Forbes covers some of the insane catch-22s that allow this kind of unfettered greed and inefficiency to continue.
And then people wonder why a candidate like Bernie Sanders is so popular with people. Because people are tired of being bullshitted by business leaders and conservative politicians about how dire everything is while they keep making more and more money. They tell us all that they’ll need to get rid of social security and medicare while lowering the tax rates on the guy who just made $358,134,747 simply for retiring.
Because for all the ways they paint the private sector as noble, something for government to aspire to, the same bullshit happens there, too. The same bloating, the same excess, the same waste, the same frivolity. The same lack of accountability for the people at the top. Human greed and ignorance permeates all aspects of society, something that is often lost on conservatives.
But it doesn’t have to be that way. Companies like Crisp are showing that. They’re just starting to show that there’s a different way to do things. You can essentially democratize the workplace–give the employees the reigns. Give the employees more of a stake in things. Give the employees the freedom they don’t get with a top-down organizational structure.
Because the same is is true in the workplace as it is in politics: the people have the power. Unions used to be how workers flexed that muscle. And then the bullshit started. “Well, you know, those unions, they just ensure that bad workers can’t be fired.” You hear this bullshit all the time, like with teachers. The teachers union just protects bad teachers!
An argument that seems especially ironic given that of the top 25 paid CEOs in ANY GIVEN YEAR from 1993-2012, one quarter of them worked for firms that took federal bailout money. In other words, these incompetent assholes fucked up, then used your tax money to stay in business and continue to give themselves a massive raise and an even more massive golden parachute. But hey, it’s the unions that are greedy, right?
It’s all bullshit, folks. Did you know that there are countries that don’t have a minimum wage? Doesn’t the sounds like a conservative republican’s idea of paradise!? Well, not so fast. Places like Iceland and Sweden have no minimum wage because workers have the right to collectively bargain. A lot of those evil socialist countries follow that model.
Oh, I get it: when the CEO gets to determine their own outrageous salary, it’s capitalism and moxie, but when the workers try to have a say in how much they’re paid it’s evil socialism. Again, how convenient.
So the next time someone tries to tell you that the government is wasteful and stupid, count for them the many ways the the private sector is also full of corrupt hypocrites.