Human, all too human

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The JC sounds off on Management

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A view infects modern management consultancy that a business enterprise can be — should be — reduced to its data points: broadly, inputs and outputs; a balance sheet of assets and liabilities. On this view any activity the firm undertakes, and any plant, chattel or servant with which or through whose agency it undertakes it — should be quantified and then articulated on one side of the ledger or the other.

Legend has it the specifications given to farmers who grow the potatoes McDonald’s turns into French fries run to 30 pages. With that level of control you can unitise your inputs. One potato meeting criteria as tightly drawn as those is entirely substitutable for another even though, if you look at them closely, each is subtly different.

But the world is a messy, intractable place. You can’t always button down your inputs as tightly as that. Nor do you need to in order, at a more abstract level, to treat them as interchangeable.

And there’s a limit. Potatoes have no memory. They can’t acquire institutional knowledge. Nonetheless, management theory likes to treat people like potatoes. They even name them like potatoes: “Human capital” makes them — sorry, us — like units of production: consumables that can be efficiently expended or replaced in the mechanical pursuit of a dependable income stream. From this impulse comes the idea of forced ranking: not only that one can describe the worth of a group of equivalent individuals by reference to a normal distribution, but that if you don’t, there’s something wrong with your description.

You can understand the impulse to do this: making sense of the almost countless inputs and outputs that make up a modern multinational conglomerate is hard enough without having to evaluate them qualitatively. Switch off the lights, and a corporation resembles a huge, organic, steam-punk machine. If you stand back from a skyscraper at night, the light behind each window flipping on and off as clerical assistants come and go, might as well be a transistorised chip. In this way do the springs, valves and pistons of commerce twist, turn and push.

Yet, what works for potatoes works less well for people. It works badly for people whom you employ to use their brains - to evaluate and react to novel situations and opportunities for which an no-one has written a bullet-proof decision tree. It’s hard to see people like this as interchangeable units when you see, up close, what they do and how they do it. Much depends on interpersonal relations and similar collateral skills that are not directly what the employer is paying for. That doesn’t stop consultants — who must perpetrate some kind of willful blindness when considering their own position to do so — convincing themselves that the sacks of flesh and blood that parry emails, attend conference calls and flip on and off those light switches that so resemble transistors is a unit of production, as interchangeable as a spud.

Now just to be clear, here, no-one is suggesting that middle management professionals and brainworkers are an irredeemable good: it is not that human judgment is an ineffable, inscrutable magic — more that its benefit is really, really hard to value (cui bono from the analysis of a credit officer, or an inhouse counsel?), but its cost is straightforward. (Salary. Pension. Office rental.)

And humans — especially smart humans — have a spectacular skill in inventing work product ostensibly designed to further the commercial interests of the whole, but whose main practical consequence is guaranteeing that particular human’s need to do that job. That’s the definition of bureaucracy. One of the clearest ways you can further that commercial benefit is by saving costs.

So: actual, positive value add, for performing the role for which you were actually hired? No value can be assigned.

Saving costs? Easy.

The higher you fly, the easier it is to see your organisation this way. The chief executive officer has little choice - but even he will find that dystopian analysis breaks down when his gaze falls upon his own executive suite. Well; it must do. For he is a genius! No-one else could lead the enterprise with such clear-eyed vision!

Seeing like a state

There is a contrarian view, articulated by James C. Scott[1] that this kind of reductionism is not so much wilful as inevitable; without some kind of prism for “legibility” the comintern cannot otherwise understand their organisations at all. But in any system stocks, flows and feedback loops are interconnected; if you change one the others will adapt to cope with it. So restricting your view of the organisation to a homogenous set of data-points incentivises its personnel to respond only to those data points, and neglect the other, potentially vital, interconnections that in subtle ways make the organisation tick.

See also