Organizations and Dysfunctional Coupling


Cities are networks. They are to a large extent self-organizing. Nobody tells you where to live, where to shop, which friends to spend time with, or where to work, or whom to vote for. You figure all that out for yourself, based on the knowledge you have about the city.

Organizations are very different: You are told where to sit, what to work on, whom to work with, when to take a break, and who your boss is. You have comparatively little latitude to exercise your own judgment.

What organizations are missing is the power of self-organization.

Here is another way to look at it:

Organization leaders usually focus on parameters that have little influence on the basic dispositon of operations they control. They set targets like "increase sales by 20%", or "reduce costs by 10%".

They make budgets and set project deadlines, which is saying they allocate money and time buffers. Sometimes they make a reorganization, which means they mostly mess around with stock and flow structures.

Cities leave most of that to its inhabitants. City planners are concerned with overall system structure, but they mostly let people make their own decisions, and that is what makes cities resilient, productive, and powerful.

Why are organizations so much more vulnerable to damage than cities?

There are several reasons, but most have to do with the way organizations split in order to manage growth. Organizations divide into functional departments. This causes problems when information or physical material is moved from one department to another.

Hand-offs are difficult to manage, and you can have many value streams that interfere with each other. This problem becomes worse the more cost effective an organization is, because increasing cost effectiveness means reducing the capability to absorb variation in the value streams.

Add to that, that if a single node in a functional organization is damaged in some way, it may affect all value streams running through that organization.

For example, if the IT department suffers from work overload, you can't do anything but wait until they get to your request. I have worked at organizations with waiting times of 9-18 months for simple requests like setting up a server.

On the other hand, in a city, if you can't get the service you want when you want it, you go someplace else. If the grocery shop closest to where I live closes, I won't starve. I just shop my food somewhere else.