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[[File:Desirelines.jpg|300px|thumb|right|[[Desire lines]], yesterday. {{copyright|2014}} Steve Bates]]We should not underestimate the importance of the “want” in that calculus, by the way: there is always a choice ''whom'' to call to progress a given task. [[All other things being equal]], we choose those who we have found to be helpful, co-operative and imaginative over those who tend to be defensive, hostile, boring or stupid. It is reflexive: “no good deed goes unpunished”: over time, popular staff field more calls, get more experience, build better networks and give better outcomes: “want” converges with “need”. ''Lesson: if you want to get ahead, don’t be a dork.''
[[File:Desirelines.jpg|500px|thumb|right|[[Desire lines]], yesterday. {{copyright|2014}} Steve Bates]]We should not underestimate the importance of the “want” in that calculus, by the way: there is always a choice ''whom'' to call to progress a given task. [[All other things being equal]], we choose those who we have found to be helpful, co-operative and imaginative over those who tend to be defensive, hostile, boring or stupid. It is reflexive: “no good deed goes unpunished”: over time, popular staff field more calls, get more experience, build better networks and give better outcomes: “want” converges with “need”. ''Lesson: if you want to get ahead, don’t be a dork.''


In any case, these vital informal communication channels rarely run along the formal lines of the org chart. Why ''would'' they?
In any case, these vital informal communication channels rarely run along the formal lines of the org chart. Why ''would'' they?
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Since they don’t, management exhorts [[line manager]]s to [[one-to-one|meet weekly]] with their directs, populating standing agendas to furnish [[management information and statistics]] fit for injection into [[opco]] [[Microsoft PowerPoint|decks]] and [[RAG status|RAG dashboards]] of handsome looking but, given the circumstances of their generation, basically ''useless'' data.  
Since they don’t, management exhorts [[line manager]]s to [[one-to-one|meet weekly]] with their directs, populating standing agendas to furnish [[management information and statistics]] fit for injection into [[opco]] [[Microsoft PowerPoint|decks]] and [[RAG status|RAG dashboards]] of handsome looking but, given the circumstances of their generation, basically ''useless'' data.  


Now this is not to suggest that there are ''no'' meaningful communications between line manager and direct report: that would be absurd. If they are both in the office, they will be ''constantly'' be in contact — one more reason [[working from home]] is not the [[paradigm|paradigm shift]] some would like to believe — relaying important information to each other more or less in real time. But this, too, will be an ''informal'' dialogue: unminuted, off-the-record, oral, instantly evaporating, plausibly deniable and, ''until formalised'', entirely beyond management’s purview.  
Now this is not to suggest that there are ''no'' meaningful communications between line manager and direct report: that would be absurd. If they are both in the office, they will be ''constantly'' be in contact — one more reason [[working from home]] is not the [[paradigm|paradigm shift]] some would like to believe — relaying important information to each other in real time. But this, too, will be an ''informal'' dialogue: unminuted, off-the-record, oral, instantly evaporating, plausibly deniable and, ''until formalised'', entirely beyond management’s understanding.  


Consider what it takes to formalise that live dialogue into “management information”: firstly, it must be filtered to weed out the usual interpersonal pleasantries, low-level exchanges about the technical details various projects; updates about the [[BAU]]. That leaves the revenue and risk items, the latter being the usual hitches, [[snafu]]s, market dislocations and brewing ructions with clients and counterparties that is the basic ''raison d’être'' of a risk department. Here, the key objective of any report is to get this information to the boss P.D.Q. ''so she isn’t blindsided by someone further up the chain''. If someone outside your chain of command knows about an unfolding problem, you best make damn sure your manager knows it, so she can tell ''her'' manager about it, and so on, up the chain. But all this, to reiterate, is still informal, off-grid communication.
To formalise that live dialogue into “management information” it must first be filtered, to take out the usual interpersonal pleasantries, low-level exchanges about technical details and updates about the [[BAU]]: the “[[weeds]]”. What should remain are revenue, cost and risk items, the last of which being the hitches, [[snafu|snafus]], market dislocations and brewing ructions with clients and counterparties that are the basic ''raison d’être'' of a risk department.  


By the time an unfolding “situation” makes it into the written record, it has been euphemised, contextualised, narratised and put into an absolving passive that will give little hint of the potential enormity of the problem, whilst still allowing scope to claim “I did tell you” should the problem reach its potential.
Here, a key objective is to get this information to the boss P.D.Q., ''so she isn’t blindsided by someone further up the chain''. If someone outside your chain of command knows about an unfolding problem, you best make damn sure your manager knows it, so she can tell ''her'' manager about it, and so on, up the chain. But all this, to reiterate, is still informal, off-grid communication.


Thus, formal communications along the official chain of command are as likely to mislead management into a state of complacency as they are to alert it to a real problem. This was more or less the tale of the [[Credit Suisse]] losses on [[Archegos]].
By the time an unfolding “situation” makes it into the formal written record, it has been euphemised, contextualised, narratised and put into an absolving passive that will give little hint of the potential enormity of the problem, whilst still allowing scope to claim “I did tell you” should the problem reach its potential.
 
Thus, formal communications along the official chain of command are as likely to mislead management into a state of complacency as they are to alert it to a real problem. This was more or less the tale of the [[Credit Suisse]] losses on [[Archegos]]. Management never knew what hit it.<ref>“This goes to show,” says management, “that you can’t just trust the workers.” But if that is the case, then we are in a pretty place: it means international commerce works only in spite of its fundamental nature. Being better disposed to his fellow humans than that, the JC thinks a better conclusion to draw is “these chosen reporting structures, and incentives, are flawed.”</ref>
 
To be sure, the information revolution has made the business of frankness in internal communications ever more fraught. Anything put in the electronic record is discoverable, both in principle and practice. That regulation and technology should discourage open and early communication of risks as a matter for some regret.


===When the firm is in motion===
===When the firm is in motion===
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The org chart doesn’t say what should happen if Dan from risk needs to speak quickly to [[Janice Henderson|Janice]] in legal. The organogram says Dan must escalate up three [[Spans and layers|layers]] to the [[Chief risk officer|Chief Risk Officer]] who will then speak to the [[General counsel|General Counsel]], who will “cascade” his thoughts down to [[Janice Henderson|Janice]]. Of course, that is not how it works, ever: Dan just picks up the phone to Janice, or ''vice versa''. This is a [[desire line]], worn by decades of communal habit.
The org chart doesn’t say what should happen if Dan from risk needs to speak quickly to [[Janice Henderson|Janice]] in legal. The organogram says Dan must escalate up three [[Spans and layers|layers]] to the [[Chief risk officer|Chief Risk Officer]] who will then speak to the [[General counsel|General Counsel]], who will “cascade” his thoughts down to [[Janice Henderson|Janice]]. Of course, that is not how it works, ever: Dan just picks up the phone to Janice, or ''vice versa''. This is a [[desire line]], worn by decades of communal habit.


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. It is the [[Dan Grades]] who keep the place running. They are the [[ad hoc]] mechanics who keep the the eighteen-wheeler on the road. They may not be especially “senior” — they don’t derive their significance from their ''formal status'', but from their ''in''formal ''function''. 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 desire lines are pervasive across the organisation. 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.  
 
The Dan Grades and [[Janice Henderson]]s are the ''[[ad hoc]]'' mechanics who keep the eighteen-wheeler on the road. They are the “super-nodes”: they know histories, have networks and understand intuitively how the organisation works, what you must do and to whom you must speak to get things done. They may not be especially “senior” — they are too busy to be senior — and they don’t derive their significance from their ''formal status'', but from their ''in''formal ''function''.  


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?
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?
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