More on How Does an Organization Scale?

In response to one of my Emerging from the Mists of the Data posts, How Does an Organization Scale?, Joanna noted this comment: "As an aside, reducing redundancy requires an expenditure of resources that does not directly contribute to the purpose or objectives, and thus is counter-productive to the BAH organization." She then asked, "Please, expand - I need to read that post! It might help me understand or form an effective strategy for change. I responded in the comments, but I think the answer merits its own post.

Admittedly, Joanna, I have not yet worked out a detailed argument that offers an appropriate alternative - that's yet to come from the research. However, the first part of the argument - that reducing redundancy is an act of externalizing expense based on a preconceived functional decomposition - is fairly straight-forward. And, I might be able to provide some guiding thoughts for the second part, as well.

In a BAH organization, the purpose or objectives are predetermined according to conditions at the time and place when and where the organization is called into being, with occasional reviews from time to time. The requisite tasks, workflow and resulting hierarchical structure are decided, and the (supposedly) best people are hired to fill those legitimated offices, according to teachings derived from principles of scientific management, and the unholy trinity of Taylor, Fayol, and Weber. Expansion via acquisition means that there will be multiple people filling what is legitimately one office, and considerable effort (read: expense, cutthroat internal competition, and manipulative game-playing - one of my participants called it a "feeding frenzy" - all of which are counter-productive) must be made to determine which of the supposedly redundant people to shuck off. That effort and expense does not directly go to fulfilling the purpose or objective of the BAH organization; rather it is a non-productive, but deemed necessary, expenditure that transfers the expense of soon-to-be-former employees to other organizations (e.g., the state via unemployment insurance payments, one's family via digging into savings, etc.).

A Valence Theory analysis of this situation suggests that this need not be the case. For example, scaling by extending effects may not necessitate acquisition of another organization and cold, calculated divestiture of suddenly dehumanized people. This is a model used quite successfully by one of my participant organizations. Since purpose and objectives in a more-UCaPP organization are emergent from the relationship connections, the new (combined) organization may want to either discover new objectives, or facilitate a spin-off organization as part of its new (emergent and reciprocal) obligations that come from the ba-aspects of the various valence relationships.

What this means in terms of praxis for change is two things, I think. First, all the valence relationships need to be carefully considered and given equal priority in any merger or acquisition. In my experience, this is never, ever the case: economic considerations based on the nominal purpose and the so-called requirements of investors always take priority, with any other emergent considerations or opportunities taking second, or third, or tenth priority. Second, (re)developing ba rarely, if ever, is among the priorities of the merged organization. Instead, fungible aspects of the various relationships are almost exclusively emphasized, creating a mercantile atmosphere among people who are, at the very least, psychologically and emotionally displaced. Such a mentality may encourage the "feeding frenzy" and survival-of-the-most-ruthless mentality, but, in the long run, does not make for a great or sustainable organization.

[Technorati tags: scale | organization | merger | acquisition | growth strategy | organizational change]