Month: July 2014

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While individual humans seem capable of improving their abilities incrementally, both during their lifetimes (learning, building better habits, developing systems to deal with repeated situations, etc) and intergenerationally (Flynn effect?), it is not obvious that organizations currently do so. Robin Hanson lists some common inefficiencies of organizations; these problems seem endemic and timeless. Furthermore, while some organizations can last a long time and continue to do well, it is not obvious that they get “better” in a general sense over time. Rather, we tend to see an effect where organizations become overly specialized and decay. A good goal, then, is to hone in on how these issues can be dealt with systematically.

What would be the ideal theme for a culture built for an organization motivated to survive and thrive in the long run? It would seem to be some sort of growth mindset analogue at the organizational level. Specifically, great care should be taken at being aware of, and steering, the creation of systems and norms (knowing that they will tend to be sticky over time) with long-term effects and viability in mind.

Ideally we would know what healthy policies and internal systems should look like and build those from the beginning, but alternatively we can also work backwards from current failure modes (linked above); trying to identify them within an organization and finding solutions that maximize long term benefits. It seems to be that algorithms are potentially well suited to this task, especially as more data is being collected which covers the progress of work, communication, decision making and conflict within an organization. Perhaps patterns can be found across similar situations, and solution mechanisms can be tested across equally many samples. The kicker is if these solutions can be reused across organizations.

Currently we find this problem identification and solution proposition role being served on an ad hoc basis by management consultants. It seems intuitive that if organizations make a more concerted effort to record and organize as much internal data as possible, this role can be performed more efficiently with more statistical techniques. Given working models of failure modes and solutions, it is then possible to build systems which steer themselves away from the failure modes in the first place.

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DNA and epigenetic effects are important and have a large impact on one’s potential and individual abilities. However, it seems clear that intragenerational adaptation, namely learning and acting via the neocortex, is the prime determinant of what an individual is capable of during a lifetime.

Luckily, there has been a whole lot of research into how to achieve these gains predictably. We have large institutions which take an organism which isn’t capable of much beyond farting and burping and turn it into a generally productive member of society. Much of this is done through the educational system, but the majority of the truly useful learning seems to happen more haphazardly, less formally. Specifically, learning to manage habits and develop personal systems for dealing with recurring challenges leads to massive individual effectiveness increases; having a growth mindset and working towards improving oneself makes life easier and makes you more effective as an individual.

Can these concepts be extended to organizations? Organizations do not possess a hard-coded DNA, which gives them tremendous flexibility but as a result also do not possess a default, time-tested foundation of decision making systems (for humans this would be instincts, emotions, etc) to fall back on. Organizations develop a set of systems, attitudes and practices which together can be considered their culture. These systems tend to be sticky once formulated, difficult to change throughout the life of an organization, and persist through generations of personnel. Similarly to how the cells of a multicellular organism will replace themselves throughout the organism’s life yet we still consider the organism intact, personnel will rotate in and out of an organization yet the organization (and more precisely, its codified systems and practices; the culture) will remain intact (but perhaps modified, over time).

As a result, the long term behavior of an organization can be said to be governed by its culture — it encompassing the role of both genetic code, instincts, deeply ingrained habits as well as systems for problem solving and learning that we see on an individual level. If we wish for better, more effective, organizations then we should be looking to intelligently design their DNA and maintain (hopefully, improve) the quality of the culture throughout the life of the organization.

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At some point on the path towards greater complexity, it becomes clear that multicellular organisms become “greater” than the sum of their parts (the individual cells). The general mechanisms and effects are clear; a combination of gains from trade due to specialization, sharing costly resources, etc. It also seems logical that such an effect should be possible with collections of organisms. Most relevantly, organizations of humans should be able to do things better than humans acting individually — to be more effective than the sum of their parts.

Not terribly controversial, but perhaps we don’t ask ourselves often enough why or when organizations fail to live up to their potential, and what that potential is governed by. We’re not very good at understanding this yet. Delving into this will be my objective over the next few posts.

To begin with, lets consider core motivations and intrinsic limitations. Humans (and most? carbon-based lifeforms) seem to be motivated most fundamentally by reproduction. This being a logical extension of their mechanism of creation. As a contrary thought experiment, we can envision a digital lifeform which is not constrained by DNA, biological cells, etc. and has no obvious motivation to reproduce [in the traditional sense]. Rather, it may be motivated to be more efficient, to learn more, or who knows what (perhaps maximize the number of paperclips in the universe?).

Similarly, most organizations (henceforth, specifically referring to typical formal and informal organizations of humans) are not motivated by reproduction. For-profit businesses tend to be motivated by profit; the creation of more money for itself, in order to extend the life of the business and, ideally, ultimately to enrich the owners monetarily. I will focus on this specific type of human organization in later posts, mostly because they tend to be the drivers of innovation and have the largest tangible impact on our lives. That seems like an important thing. Other organizations can be equally important to our lives, specifically social structures which satisfy important emotional needs for humans, and similar analysis can be applied to them as well.

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