Postrel Problem

Leave your ego at the door. We don't want politics. These are two of the most common management lines in attempting to get the work environment to function well. They both make incredible sense in terms of getting teams to gell. We get to see these dynamics play out in the sporting world where as soon as a player becomes bigger (even if just in his head) than the team, things start to fall apart. The problem is we also believe in two types of opposing fairness. Everyone should be treated fairly,  but this means everyone should be treated equally and that they should be fairly compensated for their skill, effort and value add. Outside of the company, this problem is solved with a market. Businesses have to fight for survival and produce something that customers want. In a functioning market, their is no subtlety to the customers power - either they buy or they don't. They don't have to explain themselves. Within companies there is typically no market. Incentives and reviews become almost by definition based on ego and politics. The individual is assessed. The individual is defined by strengths and weaknesses, sorry, development areas, sorry, primary growth focusses. If an ego is a description of the individual, how is it possible to leave an ego at the door when that ego is constantly being reinforced? Line managers are given the power to cut up the pie. With pay such an important focus, how can politics not be involved?

In 'The Future and its Enemies', Virginia Postrel articulately discusses how difficult it is to articulate things. She argues for decision making to be pushed down to the front lines because of how incredibly difficult it is to pass nuance up the chain. The bigger an organisation gets, the more time you spend on putting into words the things decision makers would know if they were doing the work as well as making the decisions. A large chunk of your job becomes commentary on your job. This requires the skills of a psychologist, a writer, and yes, a politician. The focus naturally shifts to doing work that is demonstrable. Those who present themselves well and those who have good people skills will tend to have people notice their work more. Apparently the biggest predictor of whether a doctor gets sued is not her success at correctly identifying problems, but her bedside manner. This is probably true in the workplace too.

What is the solution? At a Judge Business School course earlier this year, we looked at a case study of a law firm - Wachtell, Lipton, Rosen and Katz. As a firm, they have been incredibly successful, and according to the reports we saw, they seem to have nailed some of the politics/ego problem. Case studies are problematic in that it is hard to take one feature of a firm and replicate it somewhere else. It is likely a 'Postrel Problem' in that it is very difficult to articulate. That said, I think part of why they have managed to get very competitive people to work together lies in solving incentivisation and reviews. They all work on similar issues and have similar training if slightly different specialities. The firm is small. The remuneration issue is taken off the table - the pie is split. There is a single team and so politics becomes unnecessary and they can leave their individual ego at the door.

Not every firm is a Wachtell. Most are bigger and there are a wide variety of skills employed. Bosses are distant from the action and we don't understand well what others are doing. The opposing challenges of wanting individuals to continually improve and wanting to create a high performing egoless teams remain at odds. A very early boss of mine, who also came across as a very happy man, said that the best way to think about these things is to just get on with your job and not stress about money. Any way of stripping attention away from worries helps direct energy more productively.

More questions than answers in this post, but as a society I think we are better at deciding which pies we want than how to slice them.