Organizations flounder when too many people are communicating and not enough are actually working to solve problems and get things done.
When Joanell and I were married in 1962, there were two Christmas presents. She gave me one and I gave her one.
Now, if every one of our 16 extended family members gives other members a present, there would be 240 presents under our tree at Christmas. That assumes that grandmothers can constrain themselves to one present per grandchild, which is of course a highly improbable assumption.
Organizational communications and interactions follow the same geometric pattern. Communications expand exponentially with the number of people involved. After a while, large fractions of an organization’s employees spend nearly all of their time communicating with one another. Little actual work gets done.
This is why companies, governments, universities and other organizations flounder and often ultimately fail — too many people are communicating.
In 1974, I attended a meeting with 22 vice presidents and a general manager at Control Data Corp. to review an order for an $11 million supercomputer system for processing oil exploration data in the Soviet Union. It was a highly profitable order with all of the cash up front.
The contract required Control Data to build a controller capable of transferring data from Russian seismic magnetic tapes. That task was not difficult, but the engineering department wanted extra money because of the added cost of deciphering the documentation. There were other minor changes desired. Finally I asked, “Why don’t we turn the order down? Then we can go back and negotiate a little better deal.”
After a long silence, one of the dignitaries asked, “Are you sure we have the authority to turn the order down?”
His question turned out to be a precursor of the bureaucracy that eventually did so much to bring down that respected technical company with nearly 60,000 employees worldwide.
Companies do need some communication, of course. But successful and unsuccessful companies handle communications differently. The formula isn’t magic. Successful companies insert more work between meetings.
These differences can be illustrated by examining how General Motors and Ford approached product development in the 1980s. Both companies were doing poorly, but Ford was doing much worse. Both needed to develop new-model cars that would sell well and rejuvenate rapport with key customers.
General Motors started first, with what became the Chevrolet Lumina, introduced in 1989. Ford started a year later with what became the Taurus, which came out in 1985.
These two companies differed in how they handled product development. General Motors had lots of meetings aimed at deciding what kind of a car to build. The meetings consumed vast amounts of precious time.
Ford people spent time examining best practices among competitors and other industries and, then, building prototypes to see what might be “best in class.” Unknown to many, Ford built 43 separate engines to see which one would best fit their new car, given the fact that gas prices were fluctuating wildly. Then, Ford would occasionally assemble members of “Team Taurus” to assess what had been done and to see what might be accomplished.
Importantly, only a few of the people attending the Ford meetings were dignitaries. Team Taurus consisted of production workers who suggested design changes to speed up assembly, lawyers experienced in handling product liability cases, acoustical engineers knowledgeable in sound abatement, and many women who were far better at choosing fabrics and designing car interiors than even the highest-ranking vice presidents.
The results were dramatic both in sales and cost. The Taurus became the bestselling car in the United States between 1992 and 1996. By 1992, Ford was enjoying a roughly $4 billion cost advantage over General Motors.
Why do these differences exist? Why are organization communications so ineffective at transferring individual effort into collective results? Five reasons:
Blindness — leaders who do not see what might be done to improve performance.
Lethargy — people who would rather meet than work.