The Key

“I can take one look at an organisational chart and tell you whether they will still be in business in a few years’ time.”  Philip smiled at me and raised his eyebrows.  I was already deeply impressed with his insight and achievements, but with this he had me hooked.

I have the good fortune to be married to the niece of Philip Hamilton, former Vice President of Wrigley’s Europe.  Under Philip’s guidance, Wrigley’s became the most profitable confectionery company in the United Kingdom with the best selling confectionery product. Philip commissioned the research that showed chewing gum after a meal reduces the incidence of cavities — and made that the Unique Selling Point for Wrigley’s gum.  Best of all, Philip is what I would call a Facilitative Leader — devoted to drawing out the creative power of those he works with.  He still spends a great deal of time mentoring young entrepreneurs — and when I visit, I treasure our talks after dinner.

“How do you know they will go out of business?”  I fed him the straight line.

“Well there are a few things.  But the most obvious one is very simple.  You look on the organisational chart and see who is reporting to whom.  If there are people with a one-to-one direct report — a manager with an assistant manager below him, or even worse another deputy assistant manager or something below him — you know they’re trouble.”  He gestured with his finger — a single straight line, up and down.

“Is that because of the filtering of information?”

“Well, yes.  But also they just get into conflict.  They often have identical job descriptions and objectives, so it’s not clear who is responsible for delivering the results.  A lot of the time that sort of situation gets set up because the senior guy is getting ready to retire, but they just end up fighting with each other.  If I see a few of those one-on-one line patterns, I know they are doomed but by eliminating duplicated jobs and reducing the number of levels dramatically improves communication, accountability and the dynamism of a company.”

We talked until it was time for bed — wandering into a story about how impossible it was to schedule workers in a 24 hour gum manufacturing department until management handed the scheduling over to the machine operators, who immediately resolved it among themselves.  This lead to talk of Ricardo Semler’s “Maverick”, and similar experiments with self-governing shop floors.  But Philip’s key stayed with me.

Is that single thread of communication really the best predictor of an organisation’s demise?

The discipline of sociocratic engineering suggests that healthy organisations need a rich web of feedback channels to make sure that information and influence can reach wherever needed.  Each team must connect up and down the hierarchy with at least a two-person overlap.  One-person links prevent information from flowing back up the chain — several one-person links in a row would be exponentially worse!  And in a sociocratic system, each role needs a distinct Aim — a distinct measurable value that it delivers to internal or external customers.  Duplication (or lack) of Aim means that someone’s work cannot be measured, cannot be steered — and cannot be valued.  Overlapping or undefined Aims are a almost always a source of conflict.

Sociocracy, of course, is not the only discipline to observe this problem.  Chris Argyris’s classic text, ‘Overcoming Organizational Defenses: Facilitating Organizational Learning’ describes various ways in which normal skilled defensive communications prevent key information being passed on in organisations.  A series of single links can only result in multiply distorted information, a ‘Chinese whispers game’ (or ‘telephone game’ for Americans) of organisational defenses.

Philip had handed me an invaluable diagnostic tool.  But when I asked him for permission to put examples of companies that failed for this reason into this article, he told me he couldn’t do that — in fact, he was a little taken aback.  “You can say that I have applied the principle to all the companies I have managed and to those where I have been a consultant.”

In gratitude for his permission to share what I have, I chose not to press him further.  And so I ask you:  Have you seen this pattern in organisations you have worked in or consulted for?  What have the results been?  Let’s learn from each other about this key indicator!