Mathematics of Organizational Dysfunction

Another great one from Mark Clower…

Combinatorials: I’ve mentioned the formula n(n-1)/2 before. You can use it to calculate the number of pairs of objects in any collection. It explains why an entrepreneurial startup venture can operate as a “band of brothers.”  Until, that is, it succeeds.

Imagine the startup consists of five old friends who know and trust each other. n(n-1)/2 means it contains 10 pairs of people. With only ten pairs, everyone can maintain trust; everyone knows what everyone else is good at, and the company operates smoothly.  So the company succeeds. Pretty soon it has 100 employees — 4,950 pairs.

There’s simply no way every pair will exhibit mutual trust. Some pairs are total strangers; others consist of people who just plain don’t like each other; who see each other as rivals; or otherwise can’t work together effectively.

Surface area to volume ratio: Blow up a balloon — for simplicity, imagine it’s spherical. When it’s an inch in radius, its rubber surface covers 12.566 square inches (4*pi*radius^2) and encloses a volume of 4.189 cubic inches (4/3*pi*radius^3). Surface Area/Volume = 3. Blow up the balloon to a five inch radius. It now has a surface area of 314.159 square inches, and encloses 523.598 cubic inches. Surface Area/Volume = 0.6.

Small balloons have a lot of surface area for each unit of volume. Big ones have very little. It’s why we’re made out of many itty bitty cells instead of being big globs of protoplasm. The quantities of oxygen and nutrients cells need (and wastes they must dispose of) depends on how much stuff they contain — their volume. Their surface area limits how fast they can exchange it all with the outside world.

If this still doesn’t make sense, compare the five-inch balloon to 125 one-inch balloons. Both enclose about 524 cubic inches. The five-inch balloon contains it in 314 square inches of rubber. The 125 one-inch balloons need about 1,570 square inches — five times the surface area.  It is because small objects have a much higher surface-area-to-volume ratio that iron dust is highly flammable while iron bars are not (nor do a prison make, not that it’s relevant).

It also explains why it is that in small entrepreneurships, every employee has a clear view of real paying customers and what they need, while in large enterprises almost nobody does. The surface area has become far too small relative to the company’s volume.

AND logic: Back when I was studying electric fish I learned to wire together simple electronic circuits. Many included AND gates. Feed nothing but 1s to an AND gate and it outputs a 1. Make any input a 0 and it outputs a 0.  AND logic extends to any number of operands. (A AND B AND C AND D) is only true if A, B, C and D are all true. If any are false, the entire proposition is false.

The executive suite is one big AND gate. In order to proceed on an idea suggested by an employee, the employee’s manager, the employee’s manager’s manager, and the CEO, CFO, COO, and CAO all have to say yes. If any say no, the entire corporation has said no. Big companies become risk-averse, not because their individual executives are excessively timid, but because of AND logic.

Sympathetic vibrations: Pluck a string on a guitar. It vibrates. Place the guitar near another identically tuned guitar and the same string on the other guitar will vibrate, too. It’s called a sympathetic vibration.  In business, sympathetic vibrations are why bad ideas can take on lives of their own. It works like this:

A superficially attractive idea (move our factories to China, perhaps) creates good vibes. An executive with vision but no attention to detail picks up on it and repeats it, making it louder — and therefore better-able to induce sympathetic vibrations in yet more executives. Soon, everyone repeats the idea, and it sounds just like an informed consensus.

But really, it’s just one boneheaded idea that, through the physics of sympathetic vibration, ends up filling the company.

Don’t agree? How else do you explain it?

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