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> informal organizations seem a lot better at producing good software

I don't think the formality has anything to do with the quality of software; I think it has more to do with VC-funded companies operating lean, and HR is overhead.

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Maybe. But can see how it would affect it: informality leads to much more effective communication, within-team but especially across-team, and that removes a huge class of the mistakes that cause businesses to fail. Even just reducing the barrier for people at the bottom to tell people at the top when something's completely broken makes a huge difference to the organization's effectiveness.

Informality works if there's low cultural distance between employees because you can make a lot of assumptions. But it's not exactly conducive to dealing with differences, because those assumptions might not hold.

I think it's the opposite, I think informality leads to much less effective communication, not more. It's hard to have "tough conversations" when personal relationships are on the line. Telling Steve he needs to start carrying his weight is much more difficult if it means endangering your friendship with Steve.

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