Sunday Reads #136: Why every organization slows down to a snail's pace.
And what to do about it.
Welcome to the latest edition of Sunday Reads, where we look for cheat codes to life, business, and careers (sometimes we even find them!).
If you’re new here, don’t forget to check out some of my best articles: The best of Jitha.me. I’m sure you’ll find something you like.
And here’s the last edition of my newsletter, in case you missed it: Sunday Reads #135: The 6 secrets to building a future-proof business.
This week, let’s talk about organizations. Every company slows down over time. The simplest things become harder and harder to execute. Why does this happen? And is there anything we can do about it?
And other golden nuggets and link love, of course. How the brain thinks about danger completely wrong, the Efficient Market Hypothesis in action, and some other meta stuff 😁.
PS. Do subscribe if you haven’t 😊.
1. Organizations are like slime molds.
I found an excellent presentation this week, by Alex Komoroske, the Head of Strategy at Stripe. It's called How organizations are like slime molds.
It talks about a central enigma, that anyone who works in a large or growing organization has noticed:
Even simple tasks take longer and longer, as an organization grows. Why is that?
In Harry Potter and the Methods of Rationality (the best fan fiction ever written), Draco Malfoy tells Harry Potter about the Rule of Three:
Father had told Draco about the Rule of Three, which was that any plot which required more than three different things to happen would never work in real life.
Father had further explained that since only a fool would attempt a plot that was as complicated as possible, the real limit was two.
Now, of course the Rule of Three isn't true. And it's clear Malfoy Senior had never worked in a company.
Forget three different things; we routinely work on projects that require 10 different people, to execute 20 different steps, to succeed. That’s how we work around here.
But a weaker version of this Rule of Three is still at play in any company. It's what makes working through a project feel like wading through heavy molasses.
I wrote this about Amazon, in The Fast & the Ferocious:
Amazon was fast when it started, but as it grew, it slowed down.
Like every other BigCo: employees scale linearly, dependencies scale exponentially. Suddenly coordination is a drag on the system.
This became an existential problem for Amazon.
Yes, every organization, even Amazon, slows down because of coordination issues.
Komoroske calls this feature of organizations, "coordination headwinds".
Why do these headwinds occur?
The likelihood of success of any multi-person project is dependent on two factors:
Likelihood of everyone investing as they need to; and
effect of organizational friction
We can represent it as an equation:
P(Success) = P(everyone invests properly in project) * Organizational Friction Factor
Let's talk about each of these:
a. How likely is everyone to invest optimally in the project?
Most projects in organizations (or at least in the ones I've worked at), have the following characteristics:
They require people from different functions to contribute. And these people themselves are working on several projects.
They need different levels of effort from everyone involved.
Payoff to the different people might not be equal. A new product release might be critical for the Engineering team. But Finance might not care about it so much, even though they need to contribute.
In fact, the payoff might not even be clear to everyone.
And to make matters worse, there is uncertainty in the system:
Payoff is uncertain. Yes, this nifty feature could change our company's fortunes. Or, it might not even cause a ripple in the market.
Likelihood of success is uncertain. Yes, we can do the 10 steps needed, but could the project still fail? Sure. Just ask Quibi.
Degree of difficulty is uncertain. Especially on tasks to be done by other people. If you've been subjected to eye-rolls from Finance when you tell them how to do their job, you know what I mean.
You see where I'm going with this?
In a specific kind of environment - which is, btw, every single environment in an organization with 50+ people - it's a wonder anything gets done!
b. What's the impact of organizational friction?
Let's move to the second factor.
This will come as a surprise to exactly no one, but people are different from each other.
And when different people have to work together, there are constant sources of friction.
The way you work. The way you communicate. The way you delegate.
Sure, we're all professionals. We keep our personal differences aside, and work together towards our common goal.
But here’s the thing: A project with 10 people has 45 pairwise connections.
And friction on even one of these relationships can scupper the project.
Because such systems aren't additive, they're multiplicative. If even one cog in the wheel is rusty, the entire machine crashes.
And it gets worse. As an organization grows, this coordination headwind doesn't grow linearly. It grows super-linearly, exponentially.
Wow, ok. Is there any way to fix these headwinds?
There are three solutions to this:
#1: The Drucker Razor: Don't make 100 decisions when one will do.
Don't micro-manage projects.
Just communicate objectives (in as clear a manner as possible) and preferred approaches.
As long as a project is moving in the right direction at a "good enough" pace, let go of unnecessary detail and coordination.
#2: Fred Wilson's Solution: Keep degree of difficulty down.
Break projects into smaller steps. Execute Step 1. Move to Step 2.
Don’t complicate things.
Quoting from his article (as I seem to do every week now):
Unlike sports like diving or skating, you don’t have just one or two of three attempts to win. In startups, you get to show your stuff every day, all the time.
So the better approach is to pick something simple to execute, nail it, then build on it with another relatively simple move, nail that too, and keep going.
When, ten years later, you look back at what you and the team accomplished, it may well look like a reverse triple somersault with two twists in pike, and it will have been exactly that, and you will have won the prize too. But you will have done it by doing the easier things perfectly thousands of times instead of the hard thing just once.
#3: Jeff Bezos Two-Pizza Rule: To increase speed, remove dependencies.
I wrote about this in The Fast & the Ferocious.
Bezos' first startling insight was this: "Communication is a defect."
You want to remove dependencies, not minimize their impact. You want to eliminate communication, not encourage it...
Bezos' solution was to have "Single Threaded Leaders" and Separable teams.
"Single threaded" = the project is the leader's full time job. No other responsibilities.
"Separable" = project teams stand alone. They connect with the rest of the organization only via interfaces. Like APIs (not a coincidence).
No hidden dependencies.
Check out Komoroske's presentation. It's a lot of pages, but a breezy read (each page has only one sentence).
2. Golden Nugget of the week.
I'm currently reading How I Built This, a compilation from Guy Raz's podcast of the same name.
I'm halfway through the book, but one message hit home:
Dangerous ≠ Scary
Some things are scary, but actually not dangerous at all. And some very dangerous things are not scary at all.
Rappelling down a cliff is scary, but not dangerous (I've done it a few times).
Walking down a snow-capped mountain feels pretty OK, but is dangerous as hell (done this a few times too, and almost broke my leg once!)
Same thing in life:
Quitting your job and starting up can feel scary. Very scary. But is it dangerous? Not at all.
Putting yourself out there (e.g., starting a podcast) can feel scary too. But again, what's the worst that can happen?
These are scary. But they aren’t dangerous. Driving your car around the block might be more dangerous.
Or, as Guy Raz says,
Failing is scary. Wasting your life is dangerous.
3. Some meta stuff.
So Facebook renamed itself to Meta this week, to highlight its focus on making the Metaverse happen.
Zuckerberg released a video as a sign of things to come:
Looks really cool, and I'm excited.
But also, we're gonna call it the Hyperverse from now on. No more Meta-verse, thank you very much.
Aside: this announcement set the Efficient Market Hypothesis into action.
That's it for this week! Hope you liked today’s edition. Drop me a line (just hit reply or leave a comment through the button below) and let me know what you think.
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Until next time, wish you good health, safety, and sanity.