The path of least dysfunction

Organizations are still the best way to get many things done, whether it’s seeing the big picture, nipping bad ideas in the bud, or making the trade-offs required

Sullivan (left) and Fisman say big firms have gotten even bigger with technological advancements.
Sullivan (left) and Fisman say big firms have gotten even bigger with technological advancements.

American writer-illustrator Scott Adams famously draws inspiration from true stories for Dilbert—his comic take on life in the modern-day office. The satirical strip finds comic fodder in everything from reasoning with seemingly unreasonable managers to setting passwords for work email.

Contrast this with Ray Fisman and Tim Sullivan, who argue in defence of some of the things we love least about our workplaces in The Org: How The Office ‘Really’ Works. Fisman is the Lambert Family professor of social enterprise and co-director of the social enterprise program at the Columbia Business School, US. Sullivan is the editorial director of the Harvard Business Review Press.

In an email interview, Fisman and Sullivan explain why there is a need for meetings and middle-management in today’s organizations, despite their inefficiencies and criticisms. Edited excerpts:

What are the key problems that dog organizations?

People undervalue the importance of good old-fashioned middle management and all the paper trails, meetings, and protocols that go with it. There is a classic study by the World Bank and Stanford University researchers where good management was implemented in a group of mid-sized Indian textile firms in Tarapur (Maharashtra) and Umbergaon (Gujarat). The cost was paid by the World Bank, but the improved efficiencies from the management changes would have paid for themselves and then some within just a couple of years. That is, good management can make an enormous difference in performance—even though so many people hate their managers.

That said, one reason we’re always hunting after the Holy Grail of efficiency is the sense that things can and should be better. “Optimism bias” is inherent to the human condition. Think carefully about the law of unintended organizational consequences before chasing after the new new thing—remember, the difference between unnecessary red tape and essential rules isn’t always apparent.

In your book you say organizations might benefit if they “squelch innovation”.

The Org—How The Office ‘Really’ Works: By Ray Fishman and Tim Sullivan, John Murray/Hachette, 308 pages, Rs 299.
We don’t recommend they squelch innovation. Or at least not exactly. But there are lots of well-meaning innovations that don’t end well. McDonald’s used to take ideas for new product offerings from their franchisees. But they don’t any more. A single franchisee doesn’t see the big picture of what would be required to introduce a new product at McDonald’s’ thousands of stores. For example, in introducing the Filet-o-Fish sandwich, the company needed to develop a product that wouldn’t deplete global fish stocks of a particular species. This isn’t a problem that a single individual would confront or consider. Also, it’s crucial to McDonald’s’ reputation that every Filet-o-Fish be identically tasty and safe to eat. Imagine the effect on McDonald’s’ value if one rogue franchisee poisoned a customer with a well-meaning innovation.

We aren’t suggesting that employees’ innovations are necessarily bad. But the employee suggestion boxes of the world are stuffed with millions of truly awful ideas along with a handful of good ones.

Why argue in favour of calling meetings, which are considered a time drain by some today?

Since the 1970s, researchers have been studying how managers and executives spend their time. Despite the IT (information technology) revolution and introduction of smartphones, Big Data, and massive computing power, nothing much has changed: Leaders spend the same amount of time in face-to-face meetings as they did in 1970.

There’s good reason for this. You can’t look data squarely in the eye to ferret out the “soft” information that’s crucial to running any organization. Face-to-face meetings create a sense of shared culture. And they give leaders the opportunity to ask penetrating questions.

There are of course well-run and poorly run meetings, just as there are good and bad managers. We don’t see meetings themselves going away anytime soon. And that’s not a bad thing.

Some ideas for designing employee incentives.

There’s no magic bullet for avoiding incentive misfire, but some basic guiding principles can help. You need to think as much about what you can’t measure as what you can. It can help a lot to put yourself in the shoes of whoever is on the receiving end of your incentive schemes: We’ve often heard managers talk about how, in designing incentives for sales staff, it’s useful to have been salesmen themselves to think about the myriad ways that evaluation and incentive schemes can and will be gamed by their employees.

How do you see the organization of the future evolving?

Despite the various Utopian calls for the end of organizations, if anything, big companies have gotten even bigger as a result of the IT revolution. That’s not necessarily so surprising. The same technologies that allow me to outsource a data entry or telemarketing job allow me to watch over a larger number of my own employees more effectively. So technology cuts both ways when it comes to organizational size.

We need to celebrate the ways that technology has genuinely changed our work lives in a positive way. Take telecommuting: There is far more of it now than there was just a few years ago. A recent study of a Chinese technology company that randomly assigned employees the opportunity to telecommute shows that, at least for some types of workers, working remotely can make for a happier and more productive workforce. But it’s also important not to get caught up in a fantastical vision of the world where we’re all working for ourselves from the comfort of our bedrooms or kitchen tables—Yahoo’s Marissa Mayer made this point forcefully enough in advocating for an end to telecommuting at her company.

There are certain organizational truths—essentially what our book is about—that won’t disappear with better software applications or the next generation of computer technology. Organizations, with their many dysfunctions and imperfections, are still the best way of getting many things done.

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