Intracorporate communication

Why do organizational hierarchies exist?

I was discussing this question with a friend a few weeks ago – I actually read The Origin of Wealth because she said that it had a good discussion of this question. The answer in the book, which I sort of agree with, is that hierarchies are actually an efficient way to manage the information flow of larger organizations.

This is a consequence of the network effect on communications. The number of communication links necessary for everybody to know what everybody else is doing goes up exponentially with the size of the organization. An organization can’t grow beyond 100-150 people (Dunbar number-ish) without putting in some form of hierarchy or controlled communication, which is why alternative management structures like W.L. Gore split out new units whenever a unit grows beyond that size.

This communication “catastrophe” also lies behind the Mythical Man Month, where “Adding manpower to a late software project makes it later.” Adding manpower increases the size of the organization which exponentially increases the amount of communication necessary to make decisions about the project, which decreases the productivity of the people working on anything productive.

To grow an organization requires dedicating more and more people to handling communication. And that’s why middle management exists. We scorn middle managers as being useless parasites that just sit around talking all day in meetings, but their role is to make sure that information gets routed to where it needs to go in the company. Admittedly, their actions in real life are often dominated by petty backstabbing politics. But the purpose they serve is real, and larger organizations could not function without them.

Such organizations need people whose job is solely intracorporate communications. Unfortunately, many companies don’t realize this, so they give those people other roles, and nobody does the job of communication, leading to dysfunctional companies where the left hand doesn’t know what the right hand is doing. In particular, middle managers may think that their role is to direct their people and make decisions, distracting from their real purpose, which is to make sure that their team has all the information it needs from the organization, and that the needs of the team are being met by the organization.

It would be an interesting experiment to see if a larger organization could be run in a non-hierarchical fashion by explicitly designating certain people as intracorporate communication specialists, whose job was to circulate among the smaller teams of 5-20 people working on various things, and make sure that the teams knew about the relevant resources available to them and activities impacting them elsewhere in the organization. I might be biased, though, since a free floating role like that would be a good fit for me.

In case you’re wondering, we were talking about growing organizations at work and I was stunned to find myself defending middle management, so I thought I’d post about it. We now return you to your regularly scheduled silence while I go read about execution and operations, work on my company case studies, and contemplate my master’s project.

5 thoughts on “Intracorporate communication

  1. So the question for the nonhierarchical organization is, if the communicators make groups A & B aware that they have requirements that are mutually exclusive, who decides which one wins? I can imagine a complementary team whose job was to mediate and resolve conflicts, but it’s hard to see how they wouldn’t end up being viewed as higher up in an implicit hierarchy in some way.

  2. There would have to be training in mediation and negotiation for all employees for the non-hierarchical organization to work, like at the GE turbine plant. To some extent, thinking idealistically, a decision that has to be made by an authority is a failure in management – if a manager has to break out the “big ugly stick” of authority, then communication has broken down.

    But at the same time, building consensus is a slow process. So this is almost certainly not realistic for a large-scale organization. I can dream, though.

  3. You? Defending middle management? It is enough to make me necropost!

    I definitely agree that middle managers are information brokers.. it is part of why they end up playing, or being considered as playing “politics”. What is “politics” in a corporate sense other than control and coloring of an information flow.

    On consensus.. I’ve never been a huge consensus guy.. There are places where it works exceptionally well (extremely bright independent knowledge-workers, for instance), but with most of the rest of us it tends to break down in a number of classic ways because consensus only works if everyone *really cares* about getting the *same* thing done. Unfortunately, the vast majority of the world may take pride in what they do, but don’t really care where they are going. Engineers, I find, are really bad at this outside of academia. I’ve rarely found an engineer that, when left alone to do their thing, would do work that would pay their salary in the future. IMHO: Someone, not the consensus, needs to create the problem statement.. after that consensus building process make for great brainstorming / solution framing and initial direction.. which then becomes an execution plan that typically ends up with small team execution with lightweight top-down controls.

    Recently I’ve been thinking of the decision making jobs as more one of abstraction.. middle managers filter and color information that is then pushed up to less informed folks to make decisions on. This might sound stupid, but it may be that those folks make a better decision when they have *equally filtered* information from all directions and thus don’t imbalance the decision based on their area of expertise. (clearly more understanding is good as long as it’s of relatively equal depth on the relevant axes). Decisions need to then be made at the lowest level at which all the options/important data can be equally filtered.

    When I think of all the times as an engineer that I looked at what my bosses and said “WTF are they doing?”, I have to laugh at my old self.

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