Template:M intro design org chart

What you see is all there is.

— Daniel Kahneman

Der Teufel mag im Detail stecken, aber Gott steckt in den Lücken.
“The Devil may be in the detail, but God is in the gaps.”

—Büchstein, Die Schweizer Heulsuse

Org chart
/ɔːg ʧɑːt/ (n.)

A formal portrait. A still life. A glib schematic that tells you everything you don’t need to know about an organisation, but which it treats as its most utmost secret.

Form, not substance

Because we can see form easily, we imbue it with meaning. We assume the fixed connections we draw between the vertices of our institutions matter: that they are “structural”, because we say they are.

The organisation chart places every soul in the firm in a logical, hierarchical relation to everyone else, each one’s licence and professional life force ultimately emanating from the splayed fingers of the chief executive officer. This sacred schematic implies that its spidery lattice of supply-lines, command-chains and communication channels are the ones in the organisation that matter.

The JC has a contrarian view: these are the structural features and communication lines that matter least to the organisation. These are the centrally-planned architectural walkways no-one really wants. They are not (except by accident) desire paths: they do not take people where they need to go. They scarcely resemble the organic shape the organisation takes when under full sail.

What you see is all there is

Management is obliged to focuse on its formal structure, made flesh in reporting lines, because that is all it sees. Reporting lines are “legible”. Measurable. Auditable. You can count and optimise the spans and layers, and attribute to them the profits and losses of the organisation even if, in practice, they don’t map awfully well.

And these reporting lines are the most sclerotic, rusty and resented communication channels in the organisation. They are the “keep off the grass” signs; vain attempts to coerce inferior modes of communication over better ones, for if they really were the best lines of communication, you wouldn’t need to formalise them. They would just happen.

Since they don’t, management exhorts line managers to meet weekly with their directs and obliges to them to populate standing agendas to furnish management information and statistics.

Why? Because they wouldn’t do it otherwise, and no-one would miss it.

Knowledge is knowing that a tomato is a fruit; wisdom is not putting it in a fruit salad.

—Miles Kington

There is, the JC freely narratises, an epochal battle raging between wisdom and technocracy which the technocrats have, for thirty years, been winning. As we are gradually immersed in the superficial charm of technology, it feels like an end-game: there is no way out for the meatware: no titanic clash, no great final conflict — just a feeble whimpering out of human expertise, finally beaten down by the irrepressible energy of the algorithm. The latest front, artificial intelligence, feels like a coup de grace the inevitable endpoint of human uselessness.

Weisendämmerung: the twilight of the wise.

Wisdom only comes with time, experience and anecdotally-accumulated expertise. It is hard to acquire and expensive to buy. Technology, by contrast requires no time and no expertise: only brute information processing capacity — which gets ever cheaper — and enough data to process — which gets ever more abundant.

The more data there is, the more you can process, the more neural networks can crawl over it, pattern matching and framing and analysing and the more “insight” — unexpected, machine-generated insight — we can extract.

Observation of “data” is theory-dependent

But this insight is a function of the data: we can’t analyse or pattern-match data we don’t have — and what we do have we must select, filter, format, array and frame according to some pre-existing theory of the game. Our data paints a picture from shadows: by blocking out “irrelevant” data we have collected but which doesn’t advance, bear upon or fit our theory. The more data we have, the more of it we must block to make a meaningful model.

So, dilemma: the less data we have, the stronger the model, but the less reliable the insight, because we don’t know what we’re missing. The more data, the weaker the model, and the less reliable the insight, because we still don’t know what we’re missing, but the more of what we do know we have had to rule out to draw a single coherent model.

Data proves nothing in the abstract. It can be made to prove anything in the particular.

How experts work

We don’t know how experts do what they do. That ineffability is their very expertise, since if we did know, we wouldn’t need them. As experts increasingly use digital tools, though, they spin off more and more data that the technocrats can collect and analyse. (A conversation across the desk is purely analogue; it contains no recordable data or metadata; a typed letter is an analogue artefact with no metadata; a facsimile is a digital graphic of an analogue artefact with limited extractable data or metadata; an electronically transmitted ASCII document is only data, and has no meaningful analogue existence at all).

How technocrats work

As we succumb to data, increasingly giving it off, great clods of it, which the technocrats then harvest and weaponise back at us in some self-fulfilling apocalyptic prophecy. Because they can measure, they do measure. No matter what they measure is meaningless, or that the data are necessarily historical: a formalistic digital sketch of a model; they can only see what they can see: they cannot measure of the value of actions not taken, crises headed off; investment costs avoided through quick thinking and untraced application of human common sense, because necessarily, there is no data about did not happen.

We design digital tools to make lives easier. They happen, as a by-product to generate metadata. Though the metadata was not the reason for the tool, it becomes the justification for it. When the ineffable magic has happened, and evaporated into the atmosphere, the metadata is all the residue that remains, not the lives made easier by the magic.

Communications up and down the chain of command do not advance the commercial imperative, but react to it. They are validations of things the report already knows; reluctant, strained, for-the-sake-of-it FYIs; updates and postings serving only to spare the manager’s blushes should she be blind-sided by someone else. Vertical communications fulfil formal, not substantive, requirements for order.

The firm’s real business is done only when its gears are engaged, and that means its on-the-ground personnel communicate with those who are not in their immediate hierarchy. The business unit is a gear: what matters is what happens when it is engaged.

But as the complicatedness of our organisations has grown we have developed more and more internal “engines” that engage not with the outside world, but with each other, generating their own heat, noise and movement — frictions and vibrations which wear out parts and fatigue the machinery — and which are lost as entropic energy.

Of course, of course: one must have legal, compliance and internal audit, but when those departments have their own operational infrastructure and are themselves monitored and audited, the drift from optimal efficiency is plain. Internal audit must periodically audit itself. But who audits that function? Turtles ahoy: we approach an infinite regression.

The map and the territory

Reporting lines mistake the map for the territory. They are a bad static map of the firm, configured in the abstract, when it is at rest. That is, before it does anything. This is how the machine works when it is idling.

Org charts: the plan you have before you get punched in the mouth.

But the organisation’s resting state overlooks its real arterial network: lateral interactions that must cross whatever boundaries management can dream up, or that leave the firm altogether: these are the communications that employees must make: between internal specialists in different departments; with the firm’s clients and external suppliers — they make commerce happen and move the organisation along. It is in these interactions that things happen: it is here that tensions manifest themselves, problems emerge and opportunities arise, and here that these things are resolved. These are not the drill, but the hole in the wall.

These are informal interactions. They are not well-documented, nor from above, well-understood. They are hard to see. They are illegible.

Yet, everyone who has worked in a large organisation knows that there are a small number of key people, usually not occupying formally significant roles — they are too busy getting things done for that — who keep the whole place running. These “super-nodes” know histories, have networks, intuitively understand how the organisation really works, what you have to do and who you have to speak to to get things done. These are the ad hoc mechanics who keep the the superstructure on the road.

Often management won’t have much idea who these “super-nodes” are, precisely because they do not derive their significance from their formal status, but from their informal function. They earn this reputation daily, interaction by interaction.

A bottom-up map of functional interactions would disregard the artificial cascade of formal authority in favour of informal credibility. It would reveal the organisation as a point-to-point multi-nodal network, far richer than the flimsy frame indicated by the org chart. With modern data analytics, it would not even be hard to do: Log the firm’s communication records for data to see where those communications go: who chats with whom? who calls whom? Who emails whom? What is the informal structure of the firm? Who are the major nodes?

Modernism vs. agilism

The modernist sees the firm as a unitary machine that must be centrally managed and controlled from the top: the more structure the better.

The “agilist” sees it as an ecosystem, and advocates removing layers, disassembling silos and decluttering the structure. Don’t rely on those senior managers: get rid of them.

The agile theory is that risks and opportunities arise unexpectedly, in times and at places you can’t anticipate. The optimal organising principle therefore is: give talented people flexibility and discretion to react as they see fit. Have the best people, with the best equipment, in the best place to react skilfully. Those people aren’t middle managers, the optimal equipment isn’t necessarily the one that leaves the best audit trail, and that place is not the board room, nor the steering committee or the operating committee.

It is out there in the jungle. Management should seek the fewest number of formal impediments to the creative behaviour of those people.

So to understand a business one needs not understand its formal structure, but its informal structure: not the roles but the people who fill them: who are the key people whom others go to to help get things done; to break through logjams, to ensure the management is on side?

These lines will not show up in any org chart.