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The Authors of The Org Answer Your Questions

Last week, we solicited your questions for Ray Fisman and Tim Sullivan, authors of The Org: The Underlying Logic of the Office. Below you will find their very interesting answers. Thanks to all for playing along, and especially to Fisman and Sullivan.

Q. I work in an office with stark contrasts in the cultures of different departments. Has there been research on the success/failures of forcing departments to assimilate/work together more? –Drew

A. A 2003 experiment by economists Colin Camerer and Roberto Weber was designed to speak to exactly the question you’re asking: What are the challenges of cross-cultural interaction, and what difficulties present themselves when two distinct cultures are forced together?

Each participant in their experiment viewed a matrix of sixteen office scenes on a computer screen. The participants were randomly paired up and put in the roles of “manager” and “employee.” Managers’ screens highlighted and numbered eight of the pictures. Their job was to communicate to the employee, through instant messaging, the eight highlighted scenes in order. The employee had to identify the picture the manager was describing. Simple enough.

As they repeated the task, the pairs found that IMing produced a shorthand that helped them identify pictures more quickly and accurately. Camerer and Weber give the example of one manager who, in the first round, describes a picture as “The one with three people: two men and one woman. The woman is sitting on the left. They’re all looking at two computers that look like they have some PowerPoint graphs or charts. The two men are wearing ties and the woman has short, blond hair. One guy is pointing at one of the charts.” A few rounds later, the description is abbreviated to “PowerPoint.” It took just a few rounds to get vastly more efficient, and after twenty rounds, pairs were able to reduce their time from over four minutes to less than fifty seconds.

You can think of that shorthand as a kind of culture. Then Camerer and Weber disrupted these nascent cultures by adding a second employee under each manager. Each group then repeated the task with the established pair plus the newbie. Managers were paid based on the average speed of their two charges, so most stuck to their “PowerPoint” shorthands to communicate with their old partners. Why not? It had worked before.

But the old methods didn’t work with the new addition. The new management groups argued about how to identify scenes. Predictably, frustration followed (“I don’t care if they’re wearing ties – just tell me if you see the PowerPoint!”). It wasn’t pretty.

But, after playing a half-dozen times or so, the new groups became accustomed to a merged culture, or shorthand, and most got their times back under a minute.

The most important takeaway is that, despite the improved performance, simmering resentment remained. In a questionnaire handed out after the experiment, the original employees consistently rated the manager as better at his or her job than did the new employees. And managers rated the new employee as less competent than his or her original partners—even though everyone recognized that neither was to blame. In fact, the new employee’s job was rated as harder by all members of the team.

The experiment provides an evocative illustration of just how important it is that we have a shared culture in the first place–and the difficulties that come from bringing two distinct groups together. And why, without a merger of cultures being imposed from outside, teams and co-workers are prone to stick to their own patterns and cultures.

Finally, the experiment should also give people a greater sense of empathy and understanding in that moment when cultures collide, and a willingness to overcome the initial barriers and resistance. And maybe think twice about the cultural challenges that will ensue before we force two cultures together, as in a corporate merger.

Q.“Why it’s the hospital administration — not the heart surgeon — who is more likely to save your life.” That leads to a great idea to save money and lives: fire the heart surgeons and replace them with administrators! –David Leppik

A. The suggestion that good management (and managers) is more likely to save your life than a good heart surgeon isn’t to belittle the contribution of the person wielding the scalpel when you go in for bypass surgery. But no amount of manual dexterity can overcome the lethal effects of a dysfunctional healthcare organization.

The much-maligned manager deserves more credit, relative to the doers and makers who often get all the attention. Some indication of this comes from a 2012 study by the Wharton School’s Ethan Mollick, who examined the success of video games, which require both designers and managers in their production. Computer games are developed on a project-by-project basis, with a core team of several dozen programmers and engineers working intensively together on a single game for months at a time. They’re overseen by a producer who is ultimately responsible for making sure everything gets done on time and on budget. The designer is the quintessential innovator and maker, the creative engine that drives software development, while the producer takes care of mundane managerial tasks like keeping tabs on costs and deadlines.

The project-based nature of game production means that designers, producers, and programming teams are constantly coming together in different permutations, sometimes within the same company and sometimes in different ones, which allowed Mollick to decompose the relative contributions of the designer versus the producer in making a game succeed or fail. For example, if a designer always generates blockbusters, irrespective of his pairing with producer or company, then we can likely assign his success to his own creative brilliance rather than to lucky partnerships. Similarly, producers responsible for multiple flops can probably be blamed for their failures. The extent to which success or failure follows producers or designers from project to project gives a sense of the importance of each job in determining a game’s fate.

The punch line: both designer and producer matter for the success of a game (so yes, you still need a decent heart surgeon), but the producer mattered a lot more.

What of heart surgeons versus hospital administrators? As part of their global management survey project, economists Nick Bloom of Stanford [related podcasts here and here] and John van Reenen of the LSE have examined the performance of organizations across a range of sectors – from manufacturing to education to healthcare – as a function of their managerial practices. Hospital systems with better management practices are associated with higher survival rates for heart attacks, shorter wait times, and better surgery outcomes. Yes, management does save lives.

Q. How does an organization address the so-called Peter Principle — when an individual will rise until he reaches incompetency. It seems that the required skill set for a certain position is different from the one required for managerial duties. Why assume someone deserves a promotion? It seems offices lack leadership in the managerial level these days. –Pablo

A. Dr. Peter is one of our favorites. His book The Peter Principle: Why Things Always Go Wrong came out in 1969. He first expressed the principle that bears his name like this: “In a hierarchy, each employee tends to rise to his level of incompetence.” Once an employee reaches his level of incompetence, his superiors will recommend no further promotion, leading to “Peter’s Corollary”: “Every post tends to be occupied by an employee incompetent to execute its duties.”

It all rings depressingly familiar. Peter was, in truth, a playful guy and the book is a lot of fun, covering ideas like tabular gigantism (“an obsession with bigger desk than his colleagues”) and papyromania (an obsessive cluttering of one’s desk with piles of paper in an attempt to mask incompetence by creating the illusion of having too much work to do). The final chapter, “The Darwinian Exception,” argues that dinosaurs rose to dominate the earth, overreaching their grasp and becoming extinct. The book spent nearly half a year on top of the New York Times bestseller list.

Yet the question you raise is a serious one, and scholars have taken a keen interest in Dr. Peter’s ideas. After all, if you promote people to management based on the fact that they’ve demonstrated skills at lower-level work, there’s no evidence that they’ll be good managers. The problem is that managerial talent is hard to glean from performance as a salesman or engineer.

But you need to be careful in attributing apparent managerial incompetence to the Peter Principle. Edward Lazear, a Stanford labor economist and former chair of George W. Bush’s Council of Economic Advisers [related podcast here], points out that an employee may work hard only until he gets a big promotion, at which point he’ll take some time to relax. In the Lazear variation, managers aren’t stupid, just lazy. Yet Lazear doesn’t suggest that companies should necessarily do things any differently. The value of their increased effort of workers clamoring for a corner office can easily outweigh the cost of slacking managers.

Sure, there are legions of hopeless managers out there. But we’d also argue that a manager’s job is really hard, creating the impression of incompetence when he might be doing the best he can with his difficult circumstances. Managers are stuck with overseeing the many hard-to-measure and hard-to-monitor jobs that their underlings are supposed to be doing. Which is why they demand so many pointless (from your perspective) reports and call so many meetings.

But Dr. Peter absolutely had a point, as at least one company has found in trying to turn promotion into a science. Through an initiative called Project Oxygen, Google tried to capture the common attributes of managers of its most productive teams, and distilled its findings into a list of eight qualities of great managers. Most items on the list—“Have a clear vision and strategy,” for example—aren’t necessarily that easy to spot in up-and-coming engineers, however. The last item, “Technical Skills,” much easier to spot and quantify. By emphasizing those other skills, Google can start a conversation with its managers about how to improve, and also set expectations for new managers, even if the Peter Principle remains a fact of organizational life.

Q. Through a merger, I went from working for a micro business with fewer than 10 employees to working for a small business of more than 100. The two companies have noticeably different cultures in respect to things such as meetings, and number and role of managers—which makes sense to me, the larger the company the more meetings needed for just communication.

So is there an efficient company size to management % ratio, or meetings ratio? Not sure if I’m asking that right, but effectively, is there an optimum ratio saying something like the square root (number of employees) = % of managers needed. Or CEO should be in square root (number of employees) number of meetings each week? – Joe J

A. The notion that we could come up with a formula that describes the perfect ratio of meetings to employees is reminiscent of the ideas of management scientists of the last century, who thought of management as an engineering problem: The assignment of workers to tasks, and indeed the very nature of how jobs should be done (Frederick Taylor, a pioneer of the field, calculated the optimal weight to lift with a shovel was 21 pounds.)

It hasn’t turned out that way. Organizing is a human problem, which often seems to come in conflict with actually getting stuff done.

Paul Graham, a computer programmer and venture capitalist, describes this clash by noting that meetings cost the “maker”— the worker who’s actually trying to produce something—valuable time. Graham writes, “There are two types of schedule, which I’ll call the manager’s schedule and the maker’s schedule. The manager’s schedule is for bosses. It’s embodied in the traditional appointment book, with each day cut into one-hour intervals. You can block off several hours for a single task if you need to, but by default you change what you’re doing every hour.” He goes on: “When you’re operating on the maker’s schedule, meetings are a disaster. A single meeting can blow a whole afternoon, by breaking it into two pieces, each too small to do anything hard in.”

But it might help if we understood why we had meetings in the first place. At least some of the apparent pointlessness of meetings reflects the inherent inefficiency in ferreting out “soft” information, the state of affairs that can’t be coded into a spreadsheet, a memo, or a report. Those meetings help managers coordinate efforts and also allow them to gather information. As organizations get bigger, the effort to coordinate is naturally going to increase; this drives some organizations to break down into smaller units — famously, Gore-Tex does this, and they’re not the only ones, but that strategy has its own tradeoffs.

Large organizations must impose some degree of uniformity — quality control o
ver the inputs of production, including information. Meetings and memos and reports, the essential tools of management, serve this function, even though they may resemble nothing but disruption to the work lives of those who feel they are the ones actually producing something.

There are pointless and poorly run meetings – never would we suggest that we live in the best of all possible worlds – but they have a place in the life of organizations, and the role of managers and their meetings only increase as organizations grow larger and more complicated.

So what’s the ideal number of meetings? Probably fewer than you’re having now, but more than you wish you had.

Q. I’d say about 60%+ of my white-collar office job is doing total bull: answering questions that don’t matter, changing font sizes, doing reports that no one really reads. 25% is doing work to prove I did my work, preparing files for auditors to look at, blah blah blah. ~15% is actual work that matters. In your experience, how does that compare to the typical office? –Caleb B

A. What you’re looking for is an organization that empowers its employees to take initiative, to innovate, to do great things. What you’re looking for is Hewlett-Packard, but circa 1950, not 2013. Back then, company leaders referred to employees as family and set out to keep management from interfering with “the natural desire of employees to do their jobs well.” What’s become of HP today? According to recent postings on “Leaders are not authentic, they don’t engender trust.” “Complete lack of employee engagement.” “Lack of innovation and innovators.”

This is, to some degree, inevitable: as an organization grows, there are more new hires (and disillusioned older ones) who are motivated more by a paycheck than the glory of the company or the inherent satisfaction of the job. That’s where you get the hidden cameras, seemingly pointless paperwork, and hovering by managers: to make sure that at that point, stuff still gets done.

Even if you’re one of the self-motivated ones (and aren’t we all?), working diligently on even the less pleasant parts of your job, there’s still the need to coordinate the many disparate activities and workers within an organization, to make sure they’re working towards the same end, often in lockstep. Think about what would happen if every McDonald’s franchisee went his own way, serving up carved roast beef or shrimp scampi or whatever struck his fancy. How would the company ensure quality, protect its brand, and rein in costs? Every McDonald’s makes its fries with the same potato, cut and frozen at a central plant to be shipped and fried to the exact same specifications by the legendary Fry Computer. And that’s what makes the company great.

You can take solace in the fact that you’re not alone. Consider the following memo, captured in 2008 but dating back to the 1990s, from Egyptian Al Qaeda leader Mohammed Atef to a subordinate. Atef, a former agricultural engineer, wrote: “I was very upset by what you did. I obtained 75,000 rupees for you and your family’s trip to Egypt. I learned that you did not submit the voucher to the accountant, and that you made reservations for 40,000 rupees and kept the remainder claiming you have a right to do so…Also with respect to the air-conditioning unit…furniture used by brothers in Al Qaeda is not considered private property…I would like to remind you and myself of the punishment for any violation.” That’s right: Al Qaeda required a T&E report. Neither allegiance to a cause nor the threat of “punishment for any violation” was enough to keep the troops in line. Even Al Qaeda, the networked org of the future, has got bureaucracy and red tape.

Q. Is there ever a good time to do an end-run around your supervisor, and go straight to his boss? –John Pilge

A. One role of management and hierarchy is as an efficient information filtering system. The CEO makes the call on big-picture, strategic matters, and for this he doesn’t need to know what’s going on with the supply closet in one of the company’s hundreds of offices. Jumping the chain of command can threaten to overwhelm higher-ups with more detail than they really need to know.

But we have a feeling that what you’re referring to is closer to the following: You have that critical scrap of information that is crucial to the company’s survival, which may in fact implicate your supervisor in the process. Yet there are even reasons that an organization might go out of its way to commit not to allow underlings – under any circumstance – to incriminate their bosses by going straight to senior management. Think, for example, about a book editor whose job it is to find and sign new talent. She enjoys hobnobbing with authors, and has interests that run a bit more literary than commercial. The publisher’s CEO may nonetheless choose to give the editor full authority over signing new authors, to ensure that she goes all out to find promising proposals. If the editor constantly worries that she’s going to be overruled, her efforts will be half-hearted. If the editor’s assistant finds that his boss is taking too many lunches with high-brow literati, he can threaten to take this information to his boss’s boss. The only way the CEO can truly commit to giving his editors autonomy in signing authors—and ensure they’ll put in the long hours to develop the necessary relationships—is to adhere to a rule of communicating to lower-level subordinates only through their supervisors. (This example is motivated by Guido Friebel and Michael Raith’s 2004 study, “Abuse of Authority and Hierarchical Communication”)

It’s yet another absurdity of organizational life that becomes at least a little more understandable if you stop to think through the consequences of what things would be life if the rules were different. This isn’t to say that the boss shouldn’t take your request for an appointment. Rather, we’d emphasize that every rule has its costs, and its benefits. Often, we only see the costs because we’re subject to them; it’s worth our time to uncover the logic of some rules before we discard them altogether.