Why are there so many bad systems, organisation, and processes in the modern world? Why are governments so incompetent, inefficient, and often corrupt? Why are big companies and institutions so poor at innovation, so good at creating huge bureaucracies, and so bad at balancing factors such as profit and social responsibility?
First, we must establish that my claims against these organisations are true. That is difficult, because there is no valid basis for comparison, and no good objective way to measure good and bad attributes. But I think most people know through anecdotes, or just through their own personal opinions, that what I said is true, at least in the vast majority of cases.
I work in IT, so that is the perspective I often approach these questions from. Many of the worst products and services I know of are created by big organisations. I had the misfortune to have to use an NZ government web site recently and it was a shambles. And the most buggy, confusing web service I use regularly is probably Facebook, which is run by a large company. Also, I seem to have to fix a lot of problems with software designed by big companies in my work.
In contrast, many sites I use from smaller companies work really well. And I avoid software written by big companies. For example, I have a set of Microsoft and Adobe software on my Mac, but I almost never use them, because I find software written by smaller companies is much better.
So let’s just assume that “big is bad” and think about why this might be. I think it is about two things: first, as an organisation gets bigger its most important functions tend to be handed over to professional managers, and that almost always results in incompetence and inefficiency; and second, bigger organisations have too many people involved to allow efficient communications and cooperation to occur, so large projects involving many people tend to result in poor outcomes.
In the bigger organisations you tend to see a large number of incompetent managers trying to control far too many people to work together efficiently. Why do I think the managers are incompetent? Because all managers are incompetent or corrupt – if they weren’t they would be doing something useful instead! Clearly this is a controversial view, but exceptions are rare in my experience.
But what about the size of the group working on the project? What’s the deal there? Well I think it relates back to Dunbar’s Number. This is a theoretical upper limit to the number of social relationships an individual can maintain. It was first proposed in the 1990s by British anthropologist Robin Dunbar. He used the brain size of different species in relation to the number of interactions they maintained, and extrapolated that to humans. His conclusion was that humans can maintain a maximum of 150 successful relationships.
So my hypothesis is that this number also applies to the size of groups in a successful workplace. I suspect it should be a lot lower than that, because people establish relationships in places other than work which must also count towards the total. Whatever the number should be, there can be little doubt that small groups are likely to work far better than big ones.
If that is the case, smaller groups of workers, along with the lack of a professional management class, gives smaller organisations a huge advantage over bigger ones. And that might explain why huge bureaucracies, like governments, seem to always be badly run. And it might explain why small companies usually produce better products and services than big ones, and why big companies tend to gain innovative new products by acquiring them from smaller companies instead of creating them themselves.
You might ask why – assuming my theory is correct – so many large companies are so successful. I would say they are successful for the wrong reasons, and despite their incompetence. For example, when I ask why people use Microsoft products they almost never say its because they have evaluated the options and found that company’s software is best. It is almost always because that’s what they were told to use (generally by incompetent managers), or its all they have, or they were not aware of the alternatives.
People like me who do use lesser known products tend to have migrated to them as a result of frustrations with attempting to use the “default” options from the big companies. So you could say that Microsoft’s success is due to laziness and ignorance on the part of its users. Also, once a “critical mass” is reached it is difficult to escape from the trap of the dominance of big companies. Even I occasionally have to use Microsoft Word, for example, to open difficult documents, even though it is a truly hideous piece of software and I hate myself for even touching it!
It’s difficult to see how this can be fixed, because any central authority which might need to make new rules to encourage more diversity in this area is itself a victim of the results of Dunbar’s Number. But, even though there’s not a lot I can do about it, at least I have an idea of why things are so bad. That’s slightly reassuring, at least!