Why Incompetence Spreads Through Big Organisations(technologyreview.com)
technologyreview.com
Why Incompetence Spreads Through Big Organisations
http://www.technologyreview.com/blog/arxiv/23800/
8 comments
I think the basic problem has more to do with the inability to verify how competent someone is. In the real world I suspect the ability to fake competence is often what is promoted to the highest levels.
But, let's assume each level is independent on every other level and higher levels are also more important. Now how do you promote people? Well find a general measure of how good people are at anything let's call it "g" and then promote people based on that. You are probably thinking that's not fair. Which I think is the real reason people get promoted. If you dangle the possibility of promotion you get people to keep working for a lower immediate reward in the hopes that they will end up being promoted.
So promoting people based on competence at their current job might just be a carrot to keep people working hard for lower rewards.
But, let's assume each level is independent on every other level and higher levels are also more important. Now how do you promote people? Well find a general measure of how good people are at anything let's call it "g" and then promote people based on that. You are probably thinking that's not fair. Which I think is the real reason people get promoted. If you dangle the possibility of promotion you get people to keep working for a lower immediate reward in the hopes that they will end up being promoted.
So promoting people based on competence at their current job might just be a carrot to keep people working hard for lower rewards.
I think the basic problem has more to do with the inability to verify how competent someone is. In the real world I suspect the ability to fake competence is often what is promoted to the highest levels.
Not so much as an inability to verify, as it is an ability to fake, then.
A sword can still cut a man fatally. But on the modern battlefield, no soldier is going to let you get close enough to use it.
In other words, the system is going to be gamed. Only systems that are robust against gaming will succeed. Systems which can exploit the gaming will thrive. (Perhaps Digg and Reddit are examples of this?)
Not so much as an inability to verify, as it is an ability to fake, then.
A sword can still cut a man fatally. But on the modern battlefield, no soldier is going to let you get close enough to use it.
In other words, the system is going to be gamed. Only systems that are robust against gaming will succeed. Systems which can exploit the gaming will thrive. (Perhaps Digg and Reddit are examples of this?)
...and after a few iterations of reward, the next level of incentive has to come in the form of "promote to higher level in the hierarchy" rather than simply "increase salary", because of the bureaucratic norm that a manager can't be paid less than any of his or her underlings.
And paying top managers top wages, let's you get away with lower wages at the lower levels. As long as you can keep the dream of getting to the top alive.
"I don't see much value in what they've done."
I think what they did is absolutely hilarious. And, since they admit their two extreme scenarios are just that, extreme, it's even good science.
I also think their model can be easily tweaked for middle-ground scenarios and vertical correlation gradients (where abilities correlate differently between layers).
I guess I have a new weekend project.
I think what they did is absolutely hilarious. And, since they admit their two extreme scenarios are just that, extreme, it's even good science.
I also think their model can be easily tweaked for middle-ground scenarios and vertical correlation gradients (where abilities correlate differently between layers).
I guess I have a new weekend project.
That was more or less my thoughts as well, after reading this post. Did you read the actual paper? I would be interested in knowing a little bit more about which method they used to simulate the situation.
Yes, I read the paper. (Not, I confess, every word, but enough to be pretty sure I'm not misrepresenting it.) It's linked right at the end of the article. http://arxiv.org/abs/0907.0455
[promote] the least competent individuals... and... promote individuals at random
Many people engaged in large organizations might argue that this is already how things work.
Many people engaged in large organizations might argue that this is already how things work.
The company that I work in starts giving you responsibilities from the next level without a promotion and you only get promoted if you have completed 1 year of performing the next level responsibilities _well_.
"Sorry John, we can't promote you. You're just too good at what you do."
It would have been far more interesting to investigate alternative structures for large organizations. And in terms of strict hierarchical systems, the omission of a consideration of the military is rather glaring.
It would have been far more interesting to investigate alternative structures for large organizations. And in terms of strict hierarchical systems, the omission of a consideration of the military is rather glaring.
This is especially true in technology companies, where the people skills needed in managers are generally not those possessed by the most high performing leaf nodes (who may tend towards dweebery. You know who you are).
Could be due to http://en.wikipedia.org/wiki/Pareto_principle
Society is hierarchcal. It is even more interesting to apply the suggested methods to pick a president in USA.
In what way is society hierarchical?
Hierarchy is generally a poor way to organize things, unless you happen to need to fill space (which is how nature uses it). If you arrive at hierarchy as a solution to a problem, you have most likely misunderstood your problem.
Hierarchy is generally a poor way to organize things, unless you happen to need to fill space (which is how nature uses it). If you arrive at hierarchy as a solution to a problem, you have most likely misunderstood your problem.
Most of organizations in our society have hierarchical structure. The goverment, military, academic, enterprise show you the hierarchical traits in position titles. The pyramid is necessary for managing responsibilities and decision making. Social stratification is normal to all societies to some extend.
> The pyramid is necessary for managing responsibilities and decision making.
It's actually one way of making decisions and managing responsibilities. It's likely the most common because it evolved from the manufacturing-era model (think Henry Ford making cars). Ford's model evolved from looking at the military.
Ford has a famous line - “Why is it every time I ask for a pair of hands, they come with a brain attached?”
It's possible that a pair of hands that took direction would be ideal in Ford's system (though I doubt it - Honda's done much better by actually harnessing the brains connected with the pairs of hands). But that hierarchical model is counterproductive in today's knowledge and networked economy: you want to use the resources and knowledge at all levels of your company, and that way you do that is by decentralizing authority and decision-making power to the edges.
Look at the open-source model of building software; it's pretty damn far from hierarchical, and it's at least as successful at creating value compared with the more hierarchical model most software companies use.
It's actually one way of making decisions and managing responsibilities. It's likely the most common because it evolved from the manufacturing-era model (think Henry Ford making cars). Ford's model evolved from looking at the military.
Ford has a famous line - “Why is it every time I ask for a pair of hands, they come with a brain attached?”
It's possible that a pair of hands that took direction would be ideal in Ford's system (though I doubt it - Honda's done much better by actually harnessing the brains connected with the pairs of hands). But that hierarchical model is counterproductive in today's knowledge and networked economy: you want to use the resources and knowledge at all levels of your company, and that way you do that is by decentralizing authority and decision-making power to the edges.
Look at the open-source model of building software; it's pretty damn far from hierarchical, and it's at least as successful at creating value compared with the more hierarchical model most software companies use.
No doubts that open source model creates vast value to software industry, but that model is distributed only in terms of the big picture. If you look at a specific open source project, it's probably still organized in a hierarchical way. It still needs a leader to do the high level design and decide direction. New commers still need to climb the ladder - by contributing to the project - to a point before they can significantly affect the project.
But the hierarchy is broken by the ability of one node, err, person, to participate in multiple hierarchies at once at varying levels. This turns it into more of a graph of relationships with hierarchical elements, and while it's true you can't understand that without understanding hierarchies it is equally true that you can't understand the dynamics if you only characterize it as a hierarchy.
One way of expressing America's still-unusual social flexibility is that we have many valid social structures and it is very easy to move between them; there have even been some studies on how that works. Contrast this with the other extreme of "grow up in your home small town and never leave", for instance, where there does develop a fairly strict universal hierarchy.
One way of expressing America's still-unusual social flexibility is that we have many valid social structures and it is very easy to move between them; there have even been some studies on how that works. Contrast this with the other extreme of "grow up in your home small town and never leave", for instance, where there does develop a fairly strict universal hierarchy.
I guess nature misunderstood the problem domain of organizing the body:
http://ontology.buffalo.edu/medo/Modularity.pdf
http://ontology.buffalo.edu/medo/Modularity.pdf
Which is a space-filling problem, mentioned above as how nature uses hierarchy.
http://en.wikipedia.org/wiki/Cranial_cavity
Glad we've finally cleared up the function of that space filling matter.
Aristotle asserted that the brain's function was to cool the blood. Later, it was asserted that it was responsible for cognitive facilities. And now, finally, we realize that its job is to fill the space in between one's ear ...
Glad we've finally cleared up the function of that space filling matter.
Aristotle asserted that the brain's function was to cool the blood. Later, it was asserted that it was responsible for cognitive facilities. And now, finally, we realize that its job is to fill the space in between one's ear ...
thats the exact definition of the "Pewter Principle" http://en.wikipedia.org/wiki/Peter_Principle
Everyone are promoted to their level of incompetence.
If you are good at something, you'll get promoted until you are not that good anymore (i.e. its 'too big' for your skills)
in other workd (wikipedia): "anything that works will be used in progressively more challenging applications until it fails. "
in other workd (wikipedia): "anything that works will be used in progressively more challenging applications until it fails. "
The paper takes a purely empirical approach (simulate an organization with given performance characteristics and promotion rules, and see how well it does according to an ad hod measure), and it doesn't even seem that its authors have understood why it's obvious that under what they call the "Peter hypothesis" -- which is not in fact quite the hypothesis Laurence Peter made, and neither is their version of the Peter principle correct -- promoting the worst performers is best.
The paper also considers a "Common Sense Hypothesis", namely that competence at different levels is strongly correlated. Unsurprisingly, the authors find that promoting the best performers works then.
Of course, reality probably doesn't quite match either the overoptimistic "common sense hypothesis" or the overpessimistic "Peter hypothesis". The authors apparently think that a good way to deal with this is to ask what minimizes your worst-case losses if you know that one of those hypotheses holds but don't know which. So they recommend either promoting at random, or alternating between promoting the best performer and promoting the worst performer.
It might be interesting to do a study like theirs using more realistic models of employee performance at different levels of the hierarchy, but I don't see much value in what they've done.
(Let me speculate mischievously that the authors are probably quite good at what they mostly do for a living; perhaps the apparent lack of correlation between that and their success in investigating the Peter principle is itself evidence for their version of the "Peter hypothesis"...)