Why Organization Matters

If you have worked an entry level job, you are aware how one thing seems consistent in every story: the workers are certain that management is terrible.

At the middle level, no doubt they are often correct; middle managers are glorified employees, half-babysitter and half-janitor, tasked mostly with cramming an ever-widening list of duties into a shrinking budget (corresponding to narrowing margins).

However, the workers extrapolate from a few bad middle managers that management is unnecessary, and the workers being those who presumably suffer must have some insight that no one from the privileged, insulated classes of management can have.

They routinely forget that they cannot do what management can, which is organize a business to respond to real-world needs and constraints, and that this usually conflicts with what workers wish the world were more like. We can all empathize with this.

Most jobs seem to feature a constant struggle between management and labor to get the labor to focus on necessary quality instead of just going through the motions, but then again, that is what labor does: repetitive tasks. Otherwise, it would be management already.

After all, people rise into management from every level, including starting off with nothing, if they can achieve results. Although there are some examples to the contrary, they generally get there only by demonstrating competence at the task of running a business.

Despite popular culture finding this hard to recognize, more goes into running a business than “making money.” Making money serves as a bottom line measurement of productivity and efficiency, since if you produce something valuable in an efficient manner, you make profit.

Thousands of little decisions about methods of production, navigating laws and suppliers, working with people who do not understand the mission, and adjusting technical and human interface components, taken together, constitute the goal of management.

On top of that, it needs to do the usual janitorial, daycare, and mediator functions that keep groups of people working together. Workers cannot do any of this, but its necessity remains as invisible to them as visible to management, so they naïvely assume that it is arbitrary.

This shows us the importance of organization: having people in a hierarchy with appropriate procedures and boundaries (policies) so that they do the right things in the right order and respond accurately to deviations or changes in situation.

Hierarchy takes on multiple forms, but most important are a command hierarchy which resembles a pyramid and specializations, which occur at each level of that pyramid and reflect the tasks that people do outside of leadership.

For example, the upper level of management has a CEO who makes executive or business decisions, a CFO who makes financial decisions, a COO who makes personnel and procedure decisions, and corresponding legal and accounting staff who advise on the methods and potential consequences of each choice.

At the lower level, assuming that we are in a coffee shop, you have baristas, janitors, security, and management that both handles personnel and provides for the orderly flow of material through the business. These are all specialized roles, including the lower middle management, which does not make business decisions and therefore is not really part of the pyramid, although aspires to it.

Organization determines what succeeds or fails. Businesses that seem thriving can suddenly vanish because they ran into more debt than they could pay, and some businesses linger on despite making terrible margins because of their inefficiency, like a certain national book chain.

On top of technical management, there exists what we might call “wetware management,” which relies on the old principle that there are good people who run the world, some bad people, and then everyone else. They choose the good people, if they can.

Good leadership — management is a variety of this in a functional business — balances efficiency, quality, duration, quantity, and direction in order to first establish a niche in the market, and then improve to the point of being indispensable.

Low-quality management views that point as monopoly, but really it means doing something so well that the business will always prosper to whatever point is needs to in order to be able to withstand a few shocks or mistakes. This can simply mean a steady audience and a large stock fund.

Quality of organization makes the difference between a dying business and a thriving one. It also determines which civilizations live and die. The well-organized thrive and can respond to changes; the poor-organized do not do either, and end up at a subsistence level where they have no choices that they can bungle.

The same applies to us now. We live in gleaming worlds of technology and wealth where seemingly functional institutions take our money and provide decent lifestyles, we think. Under the surface, problems emerge like debt, crumbling infrastructure, infighting, and corruption.

Empires vanish faster than they rise. It takes many good decisions to build one, but a few bad decisions in a row can easily terminate one, and anything that rises in this life faces opposition from its competition, enemies, and envious people who want to bully and cajole it into making bad decisions.

On the surface, our modern world looks like it will never end. Underneath the surface, we can see just how fragile it is, and how that fragility increases rather than diminishes. Expect an exciting and possibly lugubrious near-term future.

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