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5/11/2011
07:48 PM
Venkatesh Rao
Venkatesh Rao
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Simpler Organizations Are Harder To Design

Even the most deft leaders using the latest Web 2.0 tools can't transform organizational hierarchies overnight.

I once heard an anecdote about a certain uber-hippie cafe in an uber-hippie college town that made me want to drive a sharp pencil into my ear, to use comedian Lewis Black's memorable imagery.

This cafe had an open-mic night tradition. Anyone could sign up on a chalkboard to recite a poem, sing a song, or put on any other kind of performance. But instead of signing up on a simple list, you had to scrawl your name randomly somewhere on the chalkboard.

Lists, apparently, were "too hierarchical" for our hippie friends.

So what's wrong with this approach to social design? Everything. Above all, it's the notion that simpler organizations are easier to design. They're not. They're harder to design.

The problem with most people who utter profound inanities about "networks versus hierarchies" is that they have almost no understanding of either. So they turn organizational designs into moral values. But they're not. They're structures that enable communication, management, and operational execution. To conflate values with organizational design is sheer intellectual laziness.

Egalitarianism is a value. "Horizontalness" is not. People can be evil or good. Hierarchies and networks can't be either.

Yes, there are forces emerging today that favor network designs over hierarchies and horizontal dynamics over vertical dynamics. And yes, these changes do coincide with (and to some extent are even correlated to) greater empowerment of traditionally weak classes like low-level employees and consumers.

But as statisticians never tire of reminding us, correlation isn't causation. Networks don't "cause" justice, and hierarchies don't "cause" oppression. If only it were that simple.

Why People Make The Mistake

Let's analyze the open-mic example.

As a performer, you probably don't want to go right after somebody you know is way better than you. The organizer wants the right choreography for the whole evening. Some audience members are selfish and want to see only those performers they're interested in. Other audience members are community-spirited and want to encourage young performers and cut egoistic stars down to size.

Organization design has to do with how you balance those competing concerns given the practical constraints of the domain. If you want to level the playing field among performers, randomize the order (putting names into a hat is a better model than scrawling on a chalkboard). If you want to be respectful of people's time and allow them to do something else until their favorite performers are on stage, create a list and give each person a time limit. If you want to choreograph the whole evening to maximize the average number of occupied seats through the evening, put your most popular performer on at the end.

If you want to lend the evening a laid-back ambiance, where people lose their sense of time and settle in with herb tea and interesting brownies, the random chalkboard might be a good model. As Alfred Chandler famously noted, "structure follows strategy."

So why do people default to simplistic solutions when there's so much complexity and richness? Because the real problem is far harder to solve than amateur organization designers can imagine.

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