Wednesday, December 31, 2014

Getting Bigger

Getting bigger makes things more efficient. Getting bigger makes co-ordination and understanding a lot more difficult. As we have scaled production of very specific things, we have got incredibly efficient. Foxconn in Taiwan employs over 1.2million people and is probably involved in the manufacture of a large chunk of the electronics you own. Walmart flipped the way retailers sold food. Sam Walton focussed on smaller towns, and cut down profit margins believing that giving clients a good deal would deliver the scale that would make up the difference. He was right and the Walmart story is a powerful one. Things do change as you grow and systems become more complex. Walton was a hands on manager who learnt to fly so he could wander around America getting to know his customers and what they needed. Seth Godin makes a powerful case that 'small is the new big'.

One of the issues of getting bigger is the 'Postrel Problem' - we are not good at articulating much of our understanding. Often we know how to do something but not why we know how. We have tacit knowledge. If we try to articulate, we often get it wrong. We don't feel it is good enough to say, 'I don't actually know, but it seems to work'. Instead we throw out untested thoughts, normally very confidently, about our theories or rational. Although the definition can be different, I think it is useful to think of an 'interesting thought' as one that can be proved wrong. If that is not possible, the thought can be beautiful, but not interesting. That doesn't mean they aren't useful. We may still have to discover the way to frame the question in an interesting way. Our Elephants are actually very intelligent but they pick things up through patterns and repetition, making trial and error leaps of judgement. Our Riders are very rational but also rather self-conscious, insecure and unwilling to admit doubt. The Rider wants to believe they are in control, and so will attempt to explain things. The bigger an organisation gets, the bigger the gap from the understanding and the more insecure riders involved in the communication links.

One of the quandaries that come with growth as well is our ability to understand the 'big picture'. As soon as things get big, we need to specialise. The lack of broader understanding means that while we are doing well in our area, a coordination problem can exist. Globalisation has allowed us to grow the number of people we are exposed to. Communication and travel has allowed us to live further and further away. One of the challenges this poses is how to let people know the things they would have known through body language and presence when words escape. Sometimes it is hard to ask. When you live in a communal area, the uncle will see Mom and Dad need a break, and without words exchanged take the tyrannical, uber-Lord, tantrumming, titan, two year old for a few hours. When you live in a neighbourhood where people know each other, the teenager who has a few hours spare may (I did say may) help someone who is washing their car.

Perhaps Artificial Intelligence and electronics can help. We may know the questions that are tougher to ask, and ask them. If you sat down and said and were asked what chores you would be willing to do for a few friends and family (without them asking) and then we they logged on, they saw a willing source of support, perhaps they would jump at the offer. More broadly, a computer could co-ordinate known skills with willing users. The broader question is with all the gains scale has given us, how do we counter the loss of non-verbal communication and coordinate tacit knowledge?

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