Status: December 20, 2021 8:17 a.m.
Corporations like Google or Netflix began as startups and are now large corporations. But they have retained ideas from the founding years in the corporate culture. What is the secret of your success?
Google, Facebook, Netflix and hundreds of other tech companies in Silicon Valley have long ceased to be small start-ups. The Google parent company Alphabet alone employs more than 150,000 people worldwide. There are 45,000 on Facebook and 12,000 on Netflix. Nevertheless, many companies here in Silicon Valley, a few kilometers south of San Francisco, have retained their own leadership culture.
“Favorite example” Netflix
“Many of the founders have had a lasting influence on their organizations,” says organizational psychologist Jennifer Chatman, who teaches as a professor at the University of Berkeley. “Some for structural and strategic reasons, because they were head of the company for a very long time. Others have done a really good job by weaving a high degree of flexibility into the corporate culture: the idea that part of success is based on agility If this subsides, success suffers. ”
When it comes to leadership, the tech companies in Silicon Valley are mostly concerned with the question of whether these companies are organized centrally or decentrally, says Chatman. “My favorite example is Netflix. CEO Reed Hastings is a leader here. He’s created a culture based on personal responsibility and employee accountability. It’s amazing how much Netflix emphasizes these elements.”
Flat hierarchies can be overwhelming
At Netflix, the responsibility of the individual employees goes so far that they can decide for themselves how much vacation they want to take. Very few employees of the video platform from Los Gatos have their own offices. Netflix boss and founder Hastings believes that the same applies to him.
But this concept of personal responsibility and self-organization has its limits. For example, at the beginning of the pandemic, says psychologist Chatman. The Netflix employees would have liked their CEO, Hastings, to take on more of the executive role and communicate with the company. “Hastings apparently feared that this could undermine the management concept of flat hierarchies and little distance between the board of directors and employees,” says Chatman. “He wanted to avoid all the news suddenly coming out of the chief executive’s office from making employees feel at a distance and ultimately losing personal responsibility.”
The organizational psychologist Jennifer Chatman, professor at the University of Berkeley, has dealt with the organizational structures of the big tech companies.
Image: Lucycal
Competitive advantage flexibility
The search engine company Google is also organized on a decentralized basis. The two founders Larry Page and Sergei Brin defined it that way from the start. “Decisions should be made where something happens. Experts say, however, that such a model can be quite expensive because it often creates duplicate structures in the company,” said Berkeley professor Chatman. The advantage of this organizational structure and the associated flat hierarchies is a high degree of flexibility in order to be able to react to market requirements. The online retailer and cloud provider Amazon is also structured in a similar way.
Chatman admits, however, that these examples are also the exception in Silicon Valley. “Former start-ups 20 or 30 years ago are now normal companies with many hierarchical levels. As a result, employees below often have the feeling that their efforts have fizzled out. For these companies, it is difficult to keep people going motivate them to do their best. “
New ideas as a guarantee of success
On the other side of the spectrum for Chatman are corporations with narcissistic leaders. Larry Ellison, the founder of the database company Oracle, is an example of this, as is Tesla boss Elon Musk. “The corporate culture is less cooperative here,” says the expert. “There are fewer new ideas. When it comes to decisions on ethical issues, the limits are usually exhausted. Narcissists at the top need a lot of attention. They often take away ideas from their employees – and with them recognition.”
In the opinion of the psychologist, a good management culture, even with many hierarchical levels, is characterized by the fact that the respective organization constantly produces new ideas despite the superstructure.
How hierarchically are tech companies organized in Silicon Valley?
Marcus Schuler, ARD Los Angeles, December 6th, 2021 3:28 p.m.