I’ve written a lot about the myriad causes of organizational decay. I wrote a long series on the topic, here. In most of my work, I’ve written about decay as an inevitable, entropic outcome driven by a number of forces, many unnamed and abstract, and therefore treated as inexorable ravages of time.
However, I’ve recently come to the realization that organizational decay is typically dominated by a single factor that is easy to understand, being so core to human sociology. While it’s associated with large companies, it can set in when they’re small. It’s a consequence of in-group exclusivity. Almost all organizations function as oligarchies, some with formal in-crowds (government officials or titled managers) and some without. If this in-crowd develops a conscious desire to exclude others, it will select and promote people who are likely to retain and even guard its boundaries. Only a certain type of person is likely to do this: friendless people. Those who dislike, and are disliked by, the out-crowd are unlikely to let anyone else in. They’re non-sticky: they come with a promise of “You get just me”, and that makes them very attractive candidates for admission into the elite.
Non-stickiness is seen as desirable from above– no one wants to invite the guy who’ll invite his whole entourage– but, in the business world, it’s negatively correlated with pretty much any human attribute that could be considered a virtue. People who are good at their jobs are more likely to be well-liked and engaged and form convivial bonds. People who are socially adept tend to have friends at high levels and low. People who care a lot about social justice are likely to champion the poor and unpopular. A virtuous person is more likely to be connected laterally and from “below”. That shouldn’t count against a person, but for an exclusive club that wants to stay exclusive, it does. What if he brings his friends in, and changes the nature of the group? What if his conscience compels him to spill in-group secrets? For this reason, the non-sticky and unattached are better candidates for admission.
The value that executive suites place on non-stickiness is one of many possible explanations for managerial mediocrity as it creeps into an organization. Before addressing why I think my theory is right, I need to analyze three of the others, all styled as “The $NAME Principle”.
The “Peter Principle” is the claim that people are promoted up to their first level of incompetence, and stay there. It’s an attractive notion, insofar as most people have seen it in action. There are terminal middle managers who don’t seem like they’ll ever gain another step, but who play politics just well enough not to get fired. (It sucks to be beneath one. He’ll sacrifice you to protect his position.) That said, I find the Peter Principle, in general, to be mostly false because of its implicit belief in corporate meritocracy. What is most incorrect about it is the belief that upper-level jobs are harder or more demanding than those in the middle. In fact, there’s an effort thermocline in almost every organization. Above the effort thermocline, which is usually the de facto delineation between mere management roles and executive positions, jobs get easier and less accountable with increasing rank. If the one-tick-late-but-like-clockwork Peter Principle were the sole limiting factor on advancement, you’d expect that those who pass the the thermocline would all become CEOs, and that’s clearly not the case. While merit and hard work are required less and less with increasing rank, political resistance amplifies just because there are so few of the top jobs that there’s bound to be competition. Additionally, even below the effort thermocline there are people employed below their maximum level of competence because of political resistance. The Peter Principle is too vested in the idea of corporate meritocracy to be accurate.
Scott Adams has proposed an alternative theory of low-merit promotion: the Dilbert Principle. According to it, managers are often incompetent line workers who were promoted “out of harm’s way”. I won’t deny that it exists in some organizations, although it usually isn’t applied within critical divisions of the company. When incompetents are knowingly promoted, it’s usually a dead-end pseudo-promotion that comes with a small pay raise and a title bump, but lateral movement into unimportant work. That said, its purpose isn’t just to limit damage, but to make the person more likely to leave. If someone’s not bad enough to fire but not especially good, gilding his CV with a fancy title might invite him to (euphemism?) succeed elsewhere… or, perhaps, not-succeed elsewhere but be someone else’s problem. All of that said, this kind of move is pretty rare. Incompetent people who are politically successful are not known to be incompetent, because politics-of-performance outweighs actual performance ten-to-one in terms of making reputations, and those who have a reputation for incompetence are those who failed politically, and they don’t get exit promotions. They just get fired.
The general idea that people are made managers to limit their damage potential is false because the decision to issue such promotions is one that would, by necessity, be made by other managers. As a tribe, managers have far too much pride to ever think the thought, “he’s incompetent, we must make him one of us”. Dilbert-style promotions occasionally occur and incompetents definitely get promoted, but the intentional promotion of incompetents into important roles is extremely rare.
Finally, there’s the Gervais Principle, developed by Venkatesh Rao, which asserts that organizations respond both to performance and talent, but sometimes in surprising ways. Low-talent high-performers (“eager beavers” or “Clueless”) get middle management roles where they carry the banner for their superiors, and high-talent low-performers (“Sociopaths”) either get groomed for upper-management or get fired. High-talent high-performers aren’t really addressed by the theory, and there’s a sound reason why. In this case, the talent that matters most is strategy: not working hard necessarily, but knowing what is worth working on. High talent people will, therefore, work very hard when given tasks appropriate to their career goals and desired trajectory in the company, but their default mode will be to slack on the unimportant make-work. So a high-talent person who is not being tapped for leadership will almost certainly be a low performer: at least, on the assigned make work that is given to those not on a career fast track.
The Gervais/MacLeod model gives the most complete assessment of organizational functioning, but it’s not without its faults. Intended as satire, the MacLeod cartoon gave unflattering names to each tier (“Losers” at the bottom, “Clueless” in middle-management, and “Sociopaths” at the top). It also seems to be a static assertion, while the dynamic behaviors are far more interesting. How do “Sociopaths” get to the top, since they obviously don’t start there? When “Clueless” become clued-in, where do they go? What do each of these people really want? For how long do “Losers” tolerate losing? (Are they even losing?) Oh, and– most importantly for those of us who are studying to become more like the MacLeod Sociopaths (who aren’t actually sociopathic per se, but risk-tolerant, motivated, and insubordinate)– what determines which ones are groomed for leadership and which ones are fired?
If there’s an issue with the Gervais Principle, it’s that it asserts too much intelligence and intent within an organization. No executive ever says, “that kid looks like a Sociopath; let’s train him to be one of us.” The Gervais model describes the stable state of an organization in advanced decline, but doesn’t (in my opinion) give full insight into why things happen in the way that they do.
So I’m going to offer a fourth model of creeping managerial mediocrity. Unlike the Peter Principle, it doesn’t believe in corporate meritocracy. Unlike the Dilbert Principle, it doesn’t assert that managers are stupid and unimportant (because we know both to be untrue) or consider their jobs to be such. Unlike the Gervais Principle, it doesn’t believe that organizations knowingly select for cluelessness or sociopathy (although that is sometimes the case).
- The Lumbergh Principle: an exclusive sub-organization, such as an executive suite, that wishes to remain exclusive will select for non-stickiness, which is negatively correlated with most desirable personal traits. Over time, this will degrade the quality of people in the leadership ranks, and destroy the organization.
If it’s not clear, I named this one after Bill Lumbergh from Office Space. He’s uninspiring, devoid of charisma, and seems to hold the role of middle manager for an obvious reason: there is no chance that he would ever favor his subordinates’ interests over those of upper management. He’s friendless, and non-sticky by default. He wouldn’t, say, tell an underling that he’s undervalued and should ask for a 20% raise, or give advance notice of a project cancellation or layoff so a favored subordinate can get away in time. He’ll keep his boss’s secrets because he just doesn’t give a shit about the people who are harmed by his doing so. No one likes him and he likes no one, and that’s why upper management trusts him.
Being non-sticky and being incompetent aren’t always the same thing, but they tend to correlate often enough to represent a common case (if not the most common case) of an incompetent’s promotion. Many people who are non-sticky are that way because they’re disliked and alienating to other people, and while there are many reasons why that might be, incompetence is a common one. Good software engineers are respected by their peers and tend to make friends at the bottom. Bad software engineers who play politics and manage up will be unencumbered by friends at the bottom.
To be fair, the desire to keep the management ranks exclusive is not the only reason why non-stickiness is valued. A more socially acceptable reason for it is that non-sticky people are more likely to be “fair” in an on-paper sense of the word. They don’t give a damn about their subordinates, their colleagues, and possible future subordinates, but they don’t-give-a-damn equally. Because of this, they support the organization’s sense of itself as a meritocracy. Non-sticky people are also, in addition to being “fair” in a toxic way that ultimately serves the needs of upper management only, quite consistent. As corporations would rather be consistent than correct– firing the wrong people (i.e. firing competent people) is unfortunate, but firing inconsistently opens the firm to a lawsuit– they are attractive for this reason as well. You can always trust the non-sticky person, even if he’s disliked by his colleagues for a good reason, to favor the executives’ interests above the workers’. The fact that most non-sticky people absolutely suck as human beings is held to be irrelevant.
As I get older and more experienced, I’m increasingly aware that there’s a lot of diversity in how organizations run themselves. We’re not condemned to play out roles of “Loser”, “Clueless”, or “Sociopath”. So it’s worth acknowledging that there are a lot of cases in which the Lumbergh Principle doesn’t apply. Some organizations try to pick competent leaders, and it’s not inevitable that an organization develops such a contempt for its own workers as to define the middle-management job in such a start way. Also, the negativity that is often directed at middle management fails to account for the fact that upper management almost always has to pass through that tier in some way or another. Middle management gets its stigma because of the terminal middle managers with no leadership skills; the ones promoted into those roles because, while defective, their superiors could trust them. However, there are many other reasons why people pass through middle management roles, or take them on because they believe that the organization needs them to do so.
The Lumbergh Principle only takes hold in a certain kind of organization. That’s the good news. The bad news is that most organizations are that type. It has to do with internal scarcity. At some point, organizations decide that there’s a finite amount of “goodness”, whether we’re talking about autonomy or trust or credibility, that exists and it leaves people to compete for these artificially limited benefits. Employee stack ranking is a perfect example of this: for one person to be a high performer, another must be marked low. When a scarcity mentality sets in, R&D is slashed and business units are expected to compete for internal clients in order to justify themselves, which means that these “intrapreneurial” efforts face the worst of both worlds between being a startup and being in a large organization. It invariably gets ugly, and a zero-sum mentality takes hold. At this point, the goal of the executive suite becomes maintaining position rather than growing the company, and invitation into the inner circle (and the concentric circles that comprise various tiers of management) are given only to replace outgoing personnel, with a high degree of preference given to those who can be trusted not to let conscience get in in the way of the executives’ interests.
One might expect that startups would be a way out. Is that so? The answer is: sometimes. It is generally better, under this perspective, for an organization to be growing than stagnant. It’s probably better, in many cases, to be small. At five people, it’s far more typical to see the “live or die as a group” mentality than the internal adversity that characterizes large organizations. All of that said, there are quite a number of startups that already operate under a scarcity mentality, even from inception. The VCs want it that way, so they demand extreme growth and risk-seeking on (relative to the ambitions they require) a shoestring budget and call it “scrappy” or “lean”. The executives, in turn, develop a culture of stinginess wherein small expenses are debated endlessly. Then the middle managers bring in that “Agile”/Scrum bukkake in which programmers have to justify weeks and days of their own fucking working time in the context of sprints and iterations and glass toys. One doesn’t need a big, established company to develop the toxic scarcity mentality that leads to the Lumbergh Effect. It can start at a company’s inception– something I’ve seen on multiple occasions. In that case, the Lumbergh Effect exists because the founders and executives have a general distrust for their own people. That said, the tendency of organizations (whether democratic or monarchic on paper) toward oligarchy means that they need to trust someone. Monarchs need lieutenants, and lords need vassals. The people who present themselves as natural candidates for promotion are the non-sticky ones who’ll toss aside any allegiances to the bottom. However, those people are usually non-sticky because they’re disliked, and they’re usually disliked because they’re unlikeable and incompetent. It’s through that dynamic– not intent– that most companies end up being middle-managed (and, after a few years, upper-managed) by incompetents.
What makes the Lumbergh Principle so deadly is the finality of it. The Peter Principle, were it true, would admit an easy solution: just fire the people who’ve plateaued. (Some companies do exactly that, but it creates a toxic culture of stack-ranking and de facto age discrimination.) The Dilbert Principle has a similar solution: if you are going to “promote” someone into a dead end, as a step in managing that person out, make sure to follow through. As for the Gervais Principle, it describes an organization that is already in an advanced state of dysfunction (but, it is so useful because most organizations are in such states) and, while it captures the static dynamics (i.e. the microstate transitions and behaviors in a certain high-entropy, degenerate macrostate) it does not necessarily tell us why decay is the norm for human organizations. I think that the Lumbergh Effect, however, does give us a cohesive sense of it. It doesn’t go far enough to say that “the elite” is the problem, because while elites are generally disliked, they’re not always harmful. The Lumbergh Effect sets in when the elite’s desire to protect its boundaries results in the elevation of a middling class of non-virtuous people, and as such people become the next elite (through attrition in the existing one) the organization falls to pieces. We now know, at least in a large proportion of cases, the impulses and mechanics that bring an organization to ruin.
Within organizations, there’s always an elite. Governments have high officials and corporations have executives. We’d like for that elite to be selected based on merit, but even people of merit dislike personal risk and will try to protect their positions. Over time, elites form their own substructures, and one of those is an outer “shell”. The lowest-ranking people inside that elite, and the highest-ranking people outside of it who are auditioning to get in, take on guard duty and form the barrier. Politically speaking, the people who live at that shell (not the cozy people inside or the disengaged outsiders who know they have no chance of entering) will be the hardest-working (again, an effort thermocline) at defining and guarding the group’s boundaries. Elites, therefore, don’t recruit for their “visionary” inner ranks or their middling directorate, because you have to serve at the shell before you have a chance of getting further in. Rather, they recruit guards: non-sticky people who’ll keep the group’s barriers (and its hold over the resources, information, and social access that it controls) impregnable to outsiders. The best guards, of course, are those who are loyal upward because they have no affection in the lateral or downward directions. And, as discussed, such people tend to be that way because no one likes them where they are. That this leads organizations to the systematic promotion of the worst kinds of people should surprise no one.