Avoid rational conceit

With the continuous expansion of scale, the company needs to gather more talents and build a more efficient organization. At this time, only a single, top-down instruction is often not enough; a distributed management system is established within the company to allow Only when employees are more involved in decision-making and promoting openness and transparency of internal information can they respond to higher management requirements.

I have always felt that we should recruit as good people as possible, but what should we do after we gather the best? How to build an effective organization? How to deal with management challenges as the company grows from small to large? This is also what we often discuss and think about as Toutiao grows up. Now, we are inclined to the “Context, not Control” solution.

To avoid excessive instructions and approvals, first explain the difference between Context and Control by using an analogy.

There are two ways for computers to process tasks: one is a supercomputer, which uses one computer to process very intensive tasks; the other is distributed computing, which allows many machines to process tasks together, decompose tasks and the resources required by tasks. In enterprise management, there are two management modes that are similar to these two calculation methods.

The first is to treat the CEO as a supercomputer. The CEO makes strategic design, proposes a strategic plan, decomposes it layer by layer, and executes it afterwards. If you encounter a situation during the execution, report it up again. After the CEO summarizes the information, he sets the task again. In this process, there are approvals, procedures, and many management mechanisms. In the past, many companies have adopted this approach, mainly including: constructing strategies and control procedures.

The second is to have more people involved in decision-making, allowing more ideas to emerge from the bottom up, rather than a top-down strategic decomposition. This process requires more people to make judgments based on Context, rather than executing them based on instructions.

Specifically, Context refers to the collection of information required for decision-making, including what is the principle, what is the market environment, what is the overall industry pattern, what is the priority, what degree needs to be done, and business data and financial data, etc. Control includes committees, instructions, decomposition and summary, processes, approvals, and so on.

In our opinion, Control often brings some dangers. Human beings always have an illusion when judging their own rational control ability, especially intelligent and rational people, who often have rational conceit. CEOs often have successful experience, especially in the early stages of the company. CEOs have no superiors and are seldom “challenged” by others, and they tend to feel that they are wise and powerful.

But everyone has overlooked one point. The industry is constantly evolving. Although your knowledge is abundant, it is still limited in the ever-changing industry. Sometimes, CEOs mistakenly think that the methodology they put forward is particularly good and the model is particularly elegant, and they hope to be implemented on a large scale throughout the company, but they ignore the gap between abstract knowledge and concrete forms. Reason is often only suitable for knowledge abstraction, but it is not necessarily really helpful for solving specific problems. Of course, we cannot deny the role of rationality altogether. We just want to avoid the dangers caused by excessively amplifying rationality.

Top-down grand strategies are often disasters, and there have been many real examples in the industry.

For example, Windows Vista, which is a project that Bill Gates pushes according to his own technical concept, is scheduled to go online in 2003. The theory sounds very good and it is very leading, but it was not until 2006 that the project was really launched. In the middle, it was refactored once, the goal was lowered, the plan was revised, and it was finally launched.

Jobs made the same mistake. When he first left Apple to do NeXT, he proposed a very ideal computer model, including an elegant operating system and a fully object-oriented language, but in the end he did not sell many units.

There are also such examples in China. Shanda Yibao had a grand idea, but it did not match the situation of the entertainment industry, Internet bandwidth, and policy environment at that time, and it failed in the end.

In addition to the strategic problems that Control will bring, it will also cause slow response of the company due to the pursuit of a sense of control. We can try to add up all expenses, contracts, and offers to calculate the number of documents that need to be approved every day. Assuming that there are 15 in a day, there are more than 5,000 in a year. How many of these are really effective, how many have been carefully considered, or is their existence purely based on a sense of control?

In comparison, are your subordinates or others better able to approve? I think so, because they make decisions on the front line and have more external information. Due to the limited energy of the CEO and a large number of delays in approvals, many things have increased by one to two days.

In addition, there is a wrong solution to the problems that will arise when the company grows larger-premature BU (business unit)ization. This solution can cause several problems:

First, there is no cooperation between departments. For example, the BU department handles the PR (public relations) crisis by itself, recruits engineers by itself, instead of looking for colleagues in the marketing department or the technical department, the lack of cooperation between the departments, or the lack of cooperation between each other makes the cooperation worse.

Second, redundancy within the department and reduced professionalism. For example, the standard of engineers recruited by a single BU is not high enough, and the size of the engineer team is not large enough, learning from each other is not enough, progress is not enough, leading to a decline in professionalism and internal redundancy. For the CEO, he feels more like a contractor, not participating in the process after the task is sent, as long as the result is obtained. If things go on like this, corporate culture will deteriorate.

Of course there are some exceptions. If it is a relatively independent or very mature business, it does not require internal support and cooperation from the company and can be BU. The significance of the company’s existence is to divide labor and cooperate, and to ensure that the internal cooperation costs are lower than the market transaction costs for business activities within the company. A large number of BUs that do not cooperate should not exist in the enterprise in essence.

Premature BU is a relatively common error solution. Many companies set up many subsidiaries prematurely, or split them into many project groups, and even further separate their businesses and raise funds independently. In my opinion, these practices are often not good solutions, but lazy solutions, because then there is no need to solve cooperation and communication problems.

Adequate decision-making, a small number of instructions compared to Control, what are the advantages of emphasizing the Context management mode?

First, distributed computing. Let more people use more CPUs for computing, let more people participate in decision-making, and use collective wisdom. As a management, it only takes 30 seconds to make an approval decision, but others can spend three hours, do more research and make judgments.

Second, it can be executed more quickly. There is no need for layer-by-layer summary, no need to queue up and other approvals in the CEO’s place, and it can respond in a more timely manner.

Third, sufficient external information input. In the Control mode, any information must go to the CEO node and be distributed by the CEO. The CEO has largely become the interface between the company and the outside world. Compared to relying solely on the CEO to contact the outside world, understand the market, industry, or the macro economy, using the Context model can enable more employees and supervisors to directly face the industry. At this time, the information will definitely be more adequate and the perspective will be different.

Fourth, a sense of participation stimulates creativity. Doing the same thing, if employees know it, and know why, it will be more interesting than just knowing the instructions. This is also helpful to the creativity of employees.

Fifth, it can be scaled. The construction of Context may be in the form of internal systems or knowledge sharing documents. These can be reused and can be scaled. However, the time and energy of the CEO and the management team have bottlenecks, which can be solved by hard work, brain power, and endurance, and these often have no scale effect.

Of course, sometimes you need to use Control mode:

1. Emergency and key projects. For example, there is a major PR crisis that requires quick response; or the same is true for key projects. If competitors are already pushing in, at this time, there will be distributed discussions and the pursuit of bottom-up inspiration will emerge. It is too late to solve the problem. Time window It will pass soon, so emergency situations and key projects need Control.

2. Early stage of innovative business and new department. If a department has just been established, or a new executive has taken up the post, and has not yet adjusted to the company, more control is needed at this time. In addition, in the early stages of innovative business, when more support and resources are needed, the CEO’s unified coordination is also needed to lead the progress.

3. Mismatched position arrangements. If there is a big gap between the person in a position and the company’s philosophy, then his superiors also need to use Control to intervene.

Why does this problem appear after the company has developed for a period of time, but not in the early stage of the company? Because in the early days of the company, the CEO is generally an expert in the business. The company’s business is simple, the industry situation is simple, the CEO can make his own decisions, and the efficiency is higher. But as the company grows, the CEO’s energy is scattered by many things, such as PR, financing, external activities, etc., organization and management of the enterprise itself also consumes the energy of managers. In addition, the market environment becomes more complex and the business is diversified. The CEO is no longer an expert or even the most sensitive person to the business. We require CEOs to learn and grow quickly, but people’s energy is always limited, and there are always many aspects that are not as good as those in the entrepreneurial stage.

Bill Gates was an excellent architect 20 years ago. After more than 20 years, if he still uses his ideas to guide the entire large-scale project, the effect will be very limited. Of course, some companies do not have such a problem, such as Laoganma hot sauce, because they are in a stable industry and less innovative, and they only need to abide by the traditional process.

In summary, I think good organizations include:

1. Excellent people. Enterprises need distributed processors, not just an executor. Every distributed computer has the ability to judge and must be smart.

2. The management mode of “full context, little control”. Everyone has a role he needs to play, master all contextual information, and make business decisions. When necessary, make a small amount of intervention.

With the above two points, you can ensure that the transaction costs within the organization are minimized and high-quality decisions can be made. Based on this concept, when we encounter problems in our company, we often ask first if the Context is not sufficient, instead of adding Control. For example, if there is a problem in the progress of a project, we will not consider letting higher-level people do it first, but instead think about whether the context is not enough, whether the industry situation, business data, and past failure cases Share with executors.

As a manager, think about whether you make better decisions than others because of your strong ability, or because your own context is more adequate, and there is information asymmetry with other employees. If you observe carefully, you will find that sometimes managers even use information asymmetry to reflect their own value. Therefore, in the company, we must first complete the basic project of building Context. Although this is not easy, it requires a lot of communication, management, and product technical work.

From a specific operational level, Toutiao has done some practices and shared with you:

First, reduce rules and approvals. We don’t allow departments to make regulations arbitrarily. Even if they have to have rules, we also hope that the rules are very simple and do not allow rules that are several pages long and very difficult to enforce. It is necessary to reduce approvals, and even hope that approvals are not as much as possible.

Second, the organizational structure is flexible, it rejects territorial awareness, and can flexibly adjust the reporting relationship. Let everyone realize that the reporting relationship is just a way to summarize information, which can be adjusted at any time as long as the business needs it. If we have a project that is very important and we may need colleagues from the marketing department to support this project, then during this time, the director of this project is also the director of the colleagues in the marketing department.

Third, weaken the hierarchy and title (label). We encourage young people to give more ideas. I first served as CEO when I was 26 years old. I believe that 26-year-olds in our company have good practical experience and well-educated. As long as they are given a good context, they can make good decisions.

In order to prevent these forms from suppressing the grassroots nodes, we weaken the hierarchy. First, we do not allow the existence of titles such as “boss”, “so-and-so” and “teacher”. Once such a title comes out, many ideas will not emerge. Now, employees may tend to listen to what the “teacher” has to say first, and they can’t say it first. We also don’t have the daily visible treatment difference brought by title, such as what kind of person is equipped with what kind of computer, what kind of person is equipped with what kind of desk, this will also bring a sense of hierarchy, which will affect the opinions of different colleagues. .

Fourth, to encourage transparency of internal information. We encourage group chats and full communication between departments. Don’t just communicate with the CEO. We don’t advocate only one-to-one communication. We believe that one-to-one communication is very inefficient. If a new colleague or executive wants to communicate with me one-on-one, I often say that you can copy it to me, but you first send it to others, and to those who need to cooperate with you.

We keep the management OKR open to subordinate employees, so that everyone knows what you are doing, why you are doing this, and what people in other departments are doing. The OKR formulation process is not a top-down decomposition, but everyone aligns themselves with each other.

Look at the OKRs of the superior, look at the OKRs of other departments, look at the OKRs of the same level, and understand what the most important tasks of the company are at present, what are the most important tasks this quarter, and what I can do to help them. The quarterly meeting is also to try to get relevant personnel to participate as much as possible, this is not a very small-scale executive meeting. We also often hold CEO face-to-face meetings to answer questions from employees at this meeting to let everyone know about the company’s progress.

Fifth, to fully establish Context, a good internal system is needed to support it. We have an in-house tool development team of nearly 100 people who try various tools. For example, we have developed the OKR system ourselves, and it is connected with the internal IM, which is convenient for everyone to check each other.

These basic tools, first, can make people easier, and second, they can be used on a large scale. Even if a newcomer joins the company, he can quickly adapt to the OKR system, can see internal information and obtain information from the inside; he can also realize that he not only has the right to obtain information, but also has the responsibility to support related work. In our opinion, this practice is to build the company as a product, to make the company’s internal context more effective, and to make the system’s distributed processing capabilities stronger.

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