Bureaucracy is everywhere—but does it have to be? In this bold, no-holds-barred talk from Prodacity 2025, Matt Parker, author of A Radical Enterprise and former Global Head of Engineering at Pivotal Labs, explores how organizations can break free from bureaucratic stagnation and unlock true innovation.

Parker challenges deeply ingrained structures of hierarchy, domination, and compliance, offering an alternative: internal market dynamics that reward value over rhetoric. He examines why bureaucracies persist, why radical collaboration is rare, and what it really takes to change organizational culture—from startups to Fortune 500 companies to government agencies.

🔹 Key Topics Covered:

• Why culture is like a river—and why principles alone won’t change it
• The illusion of control: Why traditional leadership models fail
• How market-based organizational structures drive innovation
• Why bureaucracies reward rhetoric over value
• The psychological barriers to change (and why people resist accountability)
• Lessons from companies that abandoned bureaucracy and thrived

🕒 Key Highlights & Timestamps:
[00:05] - Introduction: Why organizational culture is so hard to change
[02:36] - The paradox of culture: We create it, but it controls us
[06:40] - How bureaucracy kills creativity & innovation
[07:36] - The Pivotal Labs experiment: Radical collaboration at scale
[09:48] - Why principles don’t shape culture—culture shapes principles
[11:50] - Bureaucracy as an irrational but persistent system
[13:24] - Why hierarchies and domination feel natural—but they’re not
[16:39] - What if organizations operated like internal markets instead?
[18:03] - Case study: Haier’s internal market system & explosive growth
[21:03] - The Sisyphean nature of organizational change—why bureaucracy always fights back
[24:54] - Final thoughts: Pick your mountain and start rolling

🔗 Stay Connected:
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Follow us on X: https://x.com/Rise8_Inc
Connect with us on LinkedIn: https://www.linkedin.com/company/rise8/

📖 Get the Book:
Want to dive deeper? Check out A Radical Enterprise by Matt Parker:

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Matt Parker (00:05):

Thanks to Bryon in the Prodacity conference for letting me come and speak here about this topic. Culture is a pretty hot topic these days here in America in 2025. I think there's even wars going on about culture, but I'm not going to talk about any of that because my interest has been for a long time an interest in organizational cultures and what they are, why they are, what they do, how they transform, how they don't transform. So I'm excited to tell you what I've learned and some of what I think about all of this. Lemme start though with a confession. I've never worked in government and I think at this point in my career, I probably never will. I'd be happy to consult for government, but I don't think I'll ever work in government, but I want you to know that I wouldn't stand up here today and talk to all of you if I didn't think what I had to say about this topic would be valuable to you. Even though I have no experience in government, of course, you the audience can validate or invalidate my belief. Let me know afterwards. The caveat too is there's a culture here. There's culture everywhere, and there's a culture here in this conference right now. There's a set of norms, boundaries, behaviors, expectations, taboos, and it leads all of us to behave in certain ways and it's palpable. I can promise you, standing up here on the stage, I can feel it.

(01:41):

It leads me to want to say certain things and maybe to avoid saying other things. So I'm going to give you all a choice. I can give you one of two talks. One is the talk in which I say what this culture expects me to say, and two is the talk in which I say what I really think. Let me know with a show of your fingers which talk you want one or two. Okay, everyone chose two. That's a really bold choice, and I'm glad you chose it because I was going to say what I really think no matter what you chose, but since you chose it, I can't be held accountable for anything I'm about to say. So I got that going for me. Okay, so I think at some point, oh, by the way, this is sixth Avenue in Manhattan. He used to walk down this avenue every day going to work with all those people.

(02:36):

I think at some point we all come into contact with culture as culture, culture per se, because at some point we're all struck by a certain cognitive dissonance. On the one hand, we all like to believe that we're these unique individuals, these snowflakes, the authors of our own selves and our identities. But then at some point in your life you're struck with this realization that that's ********, that you're this tiny, insignificant drop in a really big ocean of culture and that culture is sloshing you about in ways that you don't control and you don't understand. And sometimes you don't even realize travel is of course one way that we come into contact with culture as culture per se, because if you have the experience of going to another country, you can feel like a fish out of water. Has anybody here ever gone and lived in Germany?

(03:29):

So when you go to Germany and you go to rent an apartment as an American for the first time, you're in for a shock because you walk into the apartment and you go to the room where a kitchen should be and you find an empty space instead. And you're even more shocked when they tell you, oh, in Germany you buy your own kitchen and you bring it with you to your apartment and you install it in your apartment. That's crazy. Totally absurd, right? Those Germans, they're completely absurd. Their culture is irrational, not ours. Our culture, it totally makes sense. I didn't actually travel a lot as a kid, really just back and forth between Texas and Arkansas. So I didn't come into contact with culture until I did this, until I went off to college because in college I was very much thrust into a whole new set of norms and behaviors and taboos. And I promise you it was shocking for a kid who grew up in the Bible belt. But it led me to become very interested in culture and in questions surrounding culture. And I actually became even more interested in it when I realized that culture is a paradox.

(04:40):

Obviously culture is just the products of the minds of humankind. But on the other hand, at some point you realize those minds are the products of their culture, right? The culture is shaping our thoughts and our feelings because it's supplying norms and values and expectations and boundaries and taboos. And so one way to express this is to say that man, the species, not the gender man, the species creates culture. The culture creates man, which means that man and culture form. What a paradox. When in philosophy they would refer to as a hermeneutic circle in which the part and the whole form a dependency. You can't understand a part without understanding the whole first, but you can't understand the whole without understanding the parts. In computer science, we just refer to this as a circular dependency and it doesn't compile and it shouldn't compute, but it's really important. I think at some point you realize that all the good in the world and all the evil in the world, it's all in there.

(05:47):

So I felt like it's something that I should try to figure out, even if it seems impossible. The other time in my life when I came into contact with culture and the time really was when I left college and went into the workforce, I happened to be, at least from my generation, I was among sort of the lucky few that got exposed to programming at a young age. My dad, he was a programmer and his dad was a programmer. And so as a kid, when I got exposed to it, I found this thing that I really loved, that I found challenging and creative. It really stimulated my intellect and it was fulfilling. And I think that made going into the workforce that much harder because when I went into the workforce, it was as if I had been thrust into a culture that had been purpose built to destroy this thing I loved.

(06:40):

It was a culture that would suck all the joy and all the creativity and all the freedom from programming and replace it with a dehumanizing system of domination and micromanagement, the output of which was garbage. I so often created garbage software that provided no value and which was built with no sense of craftsmanship or quality. And all of that strikes me as both horrifying and absurd. It doesn't make any sense. No one is well served by this kind of bureaucratic, micromanaging culture. It's irrational. And that's a fact I'm going to come back to in a minute. Okay, so that went on for about a decade and I was miserable. And then one day this little boutique consulting company reached out to me, they were called Pivotal Labs. They invited me in to come interview, and then they gave me a job and they showed me that a very different culture was possible.

(07:36):

Look at this place. There were no bosses running around telling everyone what to do and meddling in everyone's business. There were just these small autonomous teams empowered to find the right thing to build and empowered to build them, right? And my days went from a mind numbing soul suck to spending all day pairing with other geeks and shipping like crazy. And it was just life changing. It was beautiful. It spent almost a decade there. But if I'm being honest, something happened with each passing year. We lost a little bit more and more of that radical collaborative culture, and we adopted more and more of that soul sucking, bureaucratic culture that all the other companies that we worked with and all the other governmental organizations that we worked with us had. And I think the question that I was struck with was why did we do it?

(08:25):

Why would we take something we loved and debase it and diminish it and eventually destroy it? And I'd really like to stand up here and say that I found some nefarious evil doer behind all of it and blame it on them, but I can't because we did it to ourselves, no one made us do it, which again, doesn't make any sense. It's not rational to destroy something you love. And it got me thinking about the culture question again. It got me asking questions like when it worked, what about it works? Why did it work? Who else made it work? Meaning who else has come up with an organizational culture that doesn't destroy human beings? I found some were small, some were medium, some were gigantic. There's only a handful of them. And I wrote about them, I interviewed them, I researched them, and I wrote this book, A Radical Enterprise in 2022, and you can pick up a copy in the next networking break. But that wasn't the end of my investigation. I continued to think and research. And in fact, over the past several years, I've been privileged to have a front row seat to a very large scale transformation in a very large enterprise. And as I've watched that, as I seen up close and personal, the intense struggles, the failures, as I've watched success, as I've watched progressions, as I've watched backsliding, I've come to various points of view on the culture and culture change question, which I'm going to share with you now.

(09:48):

And these may seem a little disconnected at first, but I think they add up in the end. Okay, so the first thing I can say is that statements of principle don't matter. If you're a leader and you're keen on changing the culture of your company and you think that standing up and proclaiming a new set of values and principles will change anything, you're wrong. You're wasting your breath. Principles and values don't make culture. Culture makes principles and values. The way to think about culture is to think of it like a river. And all of you inside an organization, no matter what your role is, whether you're the CEO or a rank and file contributor, you're all floating in that river. And so when you stand up and you say, here's my new principles and here's my new values, it's bad as effective at changing the cultural flow as planting sticks in the bed of a river. Now, people may float by those sticks. They may say, Hey, those are some nice sticks. I like those sticks, but then they'll just keep floating. You won't change anything. That's not a way to make change.

(10:56):

Another way we can think about culture is that it's like an invisible architecture. An architecture has some sort of function. A house is something that we live in that shelters us. A church is something that we worship in, but unlike the architecture of a house or a church or anything else, the architecture of culture is invisible. So when we study culture, we don't observe culture per se. What we observe are the effects of culture. And so we're a bit like Newton trying to understand what makes the apple fall. The corollary of all this is that culture guides behavior. I know we'd all like to think we're the author of our own thoughts and feelings and choices, but we're just not. We're much closer to puppets dangling on the ends of cultures and visible strings as unpalatable as that may seem.

(11:50):

Now, I do think there's times in which all of us are happy to admit this fact. It's whenever we fail at something or we get in trouble or we get caught, then we're quick to blame it on the situation. It's not my fault. It was the situation, right? But interestingly, that's not an out that we extend to other people. Of course, when we fail, it's the situation that's to blame. But when other people fail, they're to blame. That's not rational. In fact, nothing about any of this is very rational. I think when you begin to look closely at culture, you realize that it's quite irrational. It's not like someone sits down and rationally designs a culture. Remember, a culture is a product of the minds of human beings and human beings are not rational. Aristotle, God bless his soul, he was very wrong. Man is not the rational animal.

(12:38):

Man is the rationalizing animal because we're ruled by our feelings. Feelings develop instantaneously in any given situation. And then we think, and what do we think about? We think, how do we justify the feeling we just had? That's our first thought. That's not a rational process. It's a rationalizing process that leads us to feel right and to feel righteous. And we love that feeling. Culture is a product of that whole process. Okay, switching gears for a second. Bureaucratic culture is everywhere. Now, I know if you work in government, you already are like, yeah, I see it everywhere, but I don't want you to think that things are, the grass is greener on the other side in industry because by and large, they're not.

(13:24):

A company may exchange on a free and open market as an autonomous economic agent, as coequal with other businesses and other economic agents. But internally, 99.9% of companies on the planet look much more like an inefficient centrally plans dictatorship. They're filled with human cogs, mindlessly executing orders and commands and leaders of bureaucracies arguing and fighting and backstabbing each other. Another thing to note, oh, sorry, I had a picture here. Another thing to note is that bureaucratic culture is insidious. It's not just everywhere. It's insidious, meaning I've watched effort after effort to squash bureaucracy and bureaucratic thinking and dominate our hierarchies, but it always comes back. And at some point it because it feel like we're all trapped in a Kafka novel. We keep trying to escape bureaucracy, and it keeps finding us. And of course, the question is why I think the answer is both simple, but it's unsettling and we don't like to talk about it.

(14:24):

We may say that we hate bureaucracy, but I think that's just a espouse theory. It's not theory and use bureaucracy, hierarchy, domination, submission, subjugation, learned helplessness. That's the theory and use. You see it every day, humankind keeps gravitating towards these awful structures because it appeals to something in us, something probably and radical. Okay? Another thing I'd like to say about bureaucratic culture is that it's zero sum. I think when you peer inside a bureaucracy, you see constant fighting. Everyone is trying to win some kind of battle, and you quickly discover that these battles are zero sum battles, which means that for one side to win something, the other side has to lose something. And a lot of this has to do with the way funding works in a bureaucracy during these absurd annual budgeting processes, everyone struggles for the biggest piece of the monetary pie that they can get, but the money doesn't flow based on actual value or demand. There's no market mechanism in any of this. Who does the money go to? It goes to the best rhetorician. In fact, rhetoric is the real currency inside of bureaucracy. And to the skilled rhetorician, it's a currency in near infinite supply that they can use to get what they want and to browbeat everyone else into submission.

(15:48):

Now, bureaucratic cultures, like I've said, aren't the only organizational cultures on the planet. There are some other types of cultures. There are a small number of companies around the world that have organized themselves, not on a bureaucratic paradigm, but on a market paradigm. I want you to imagine for a second that instead of a boss, you had a customer that you sold goods and services to inside your company. And instead of a subordinate, if you happen to be a boss instead of a subordinate, you had a vendor that you purchased goods and services from inside the company. In other words, I want you to imagine that instead of organizing everyone into dominator hierarchies on a principle of ranking, you organized into a market on a principle of equality and exchange. What do you think would happen?

(16:39):

Well, for the first thing, rhetoric wouldn't really matter anymore. What would matter is value, what actually generates value and what's needed to generate that value, the things that generate value win on the market and the things that don't wither and fold and get killed off. And I just want to iterate that, reiterate that this isn't hypothetical. Yeah, there are only a few companies around the world doing this, and true, some of them are very small, but some of them are very large. Have you ever heard of HAIER the appliance manufacturer? HAIER? They're the largest appliance manufacturer in the world, and they run their company culture on internal market dynamics. On this principle of exchange. They buy things from each other and they sell things to each other inside the company. They ditch the bureaucratic paradigm for this market paradigm. And ever since they've done it, they have dominated not only the appliance market, they've also struck out into all kinds of new markets in very unexpected and unplanned ways. They're in stuff as diverse as gaming laptops and healthcare and farming. And I just want to point out how ironic it is that company has one of the most extensive expressions of market economics within the company. Because do you know where this company is located?

(18:03):

China, the most capitalist company on the planet is located in a communist country. While all these capitalists in America organize themselves internally, much more like a communist economy than a capitalist economy, it's extremely ironic. Anyways, here's what happens. When you bring a market into a company, it's a tremendous democratizing force, and you anchor and org culture around it, and you unleash a tremendous amount of innovation. You enable an organization to sense and respond to opportunities. You allow resources to dynamically flow and allocate based on demand. You also solve the coordination problem, right? And most companies around the world, you see this tremendous amount of activity to try align everyone. And it's a nightmare. Everyone feels that it's all a waste of time. It's a terrible way to solve the coordination. Problem markets solve it so much better, and it unleashes everyone from the need to know everything. You don't have to know everything in a market. It's not what markets need, and you don't need a centralized control of it.

(19:11):

So the problem, it's a rational win-win to do this inside any organization, and you could do it inside any bureaucracy, but it's a psychological lose lose. And here's why. Here's the problem. Everyone feels like they're losing something in this transition. Obviously, that rhetorician that took all their power from rhetoric, they lose all their power. They don't want to do this. Why would they? But it's not just them, right? And the bureaucrats, they can no longer endlessly try to weedle and cajole and browbeat and blackmail things from others. Now they have to buy things, and either they have money or they don't, and they have to sell things. And either the things they sell are valuable or they're not. But the rank and file employee doesn't want this either.

(20:03):

Most individual contributors inside a very large bureaucracy, they just want to get through their day without being noticed, without being bothered. And the problem is when you bring internal market dynamics into an organization, there's no hiding because either the things you do bring value or they don't. And if they don't, you're out. So you're accountable. And when you have gotten away with unaccountability for a long time, being accountable for stuff feels like you're losing something, and I can't blame them anyways. Oh yeah, I had a good picture here too. Anyways, internal market dynamics are quite rare and their longevity is uncertain.

(21:03):

They're just being threatened by this ever-present gravity. Trying to pull it back towards a bureaucratic paradigm, I think that means that all of this can feel quite Sisyphean. It sometimes feels like we're all trying to push a rock up a mountain, and it could never possibly balance on top of that mountain because it really can't. It's going to roll back down the hill. You can't change human nature. Organizational transformation is always going to be a messy model, and any change is going to be impermanent, which may lead to the question, why bother? But I think you're looking at it wrong. If that's the question that you ask, you don't have a choice. I think the one thing we've learned is that all of life is impermanent, is Sisyphean in some sense. The whole universe is like that, and permanence is inscribed in the laws of the universe. Everything decays and crumbles. It hold in heat, death, entropy. Wind science knows this. Buddhists have known it for a couple thousand years. We simply have to look at that fact and then ask the real question. The real question isn't why bother? The real question is, which mountain are you going to push your boulder up? Don't let culture pick your mountain for you. Open your eyes, pick your own mountain, and start rolling. Thanks.

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