By Clay Parker Jones profile image Clay Parker Jones
16 min read

The Organization Is Broken

Are organizations degrading the human experience, or are they poised to accelerate our progress toward dignity and achievement in the 21st century? Yes.

Organizations are our only hope. They’re also completely broken. Let’s not settle for boring, ineffective, inhumane working lives. Right? Right. Read on.

Where we went wrong

Dean Baker, Center for Economic and Policy Research, “The Productivity to Paycheck Gap: What the Data Show” 2007

Since the early-mid ’70s, wages and productivity — when measured in terms of widgets produced per hour — have been diverging. Wages are generally flat, while workers are close to 2x as productive today as they were 30–40 years ago. This divergence is coincident with the start of the so-called “Third Industrial Revolution,” marked by the introduction of the Programmable Logic Controller (1969), allowing factory-owners to install ever-more-capable robotic production equipment. Things really started to get interesting with the commercialization of the personal computer and the advent of the supercomputer (1976-forward), allowing white-collar work to feel the impact of Moore’s law.

But if you’re a worker, being paid wages, productivity gains alongside flat earnings aren’t so much fun, even if you have what used to be millions of dollars of computing power in your pocket.

World Top Incomes Database and Max Roser

When you compare this chart with the first one — same date range — it’s clear that someone is profiting from this change. While wages haven’t changed much in the last several decades, the portion of income going to the top 1% of households has.

When comparing the US to other industrialized countries, it’s clear that our organizations reflect a choice: to line the pockets of capital owners, while leaving everyone else out in the cold.

University of Notre Dame Mendoza School of Business

Even for the owners of capital, the news about “productivity” hasn’t been entirely positive. There are (at least) two ways to measure productivity: the first, used on slide 2, is fairly straightforward, counting the output of labor per hour worked; the second is perhaps a bit more mysterious, and is defined as the portion of output not accounted for by production inputs. Economies and organizations all have measurable output, and this output is understood to be created by capital and labor inputs. But when you compare these factors of productivity and the total output for the entity, there’s usually an unexplained difference.

This difference — the total factor productivity — has been declining for some time. So while there are productivity winners and losers, globally we’re better off investing in capital instead of labor or productivity.

John Hagel III, John Seely Brown, Tamara Samoylova & Michael Lui, “Success or struggle: ROA as a true measure of business performance” Deloitte University Press 2013

Even as the fat cats’ wallets get fatter, their organizations do less with their assets today than they have in the last 40 years. Again, with companies like these, it’s better to invest in capital markets than on building a legendary organization.

Richard N. Foster and Sarah Kaplan, Creative Destruction 2001

Coincident with all of this, organizations’ environmental context has become more dangerous. In the 50s, a company on the S&P 500 could expect to live 60+ years — well into wizened maturity. Today, the life expectancy for these large, important organizations is only 14 years. Companies aren’t people, and it’s a good thing — you’d have to go back millennia to find such inhospitable conditions.

This is a too-frequently cited trend, but it’s palpable in the hallways of Corporate America. In this economic context, making mistakes isn’t tolerable, particularly for managers and line employees. CEOs and execs can float from job to job — handsomely compensated along the way — while those in the middle and at the edge suffer the consequences.

This culture of fear permeates all the way to update meetings and BCC fields, where CYA is more important than ROI. And this makes a certain amount of sense: if you’ve got a mortgage (or two) and a kid (or two) in private schools, and are saving as little as your peers, a single mistake can have decades-long repercussions.

Carl Benedikt Frey and Michael A. Osborne, “The future of employment: how susceptible are jobs to computerization?” 2013

Even if we don’t screw up, these jobs are not going to be with us long: 47% of all work in the US is likely to be computerized in the next 20 years. This includes most jobs at or below the median income. Perhaps we’ll come up with other ways to spend our time, other ways to be compensated, or train our way into new careers, but it’s startling to thing that nearly half of us have jobs that straight-up won’t exist by 2045. If you’re 45 now, and you’re awesome at your job, you’re set — you should be able to ride out to retirement without a computer eating your work. Everyone else should be making alternative plans.

Gallup

But perhaps there’s a silver lining in all of this — most of us don’t like our jobs, so we might not be sad to see them given to a robot.

Fully 17% of us are actively disengaged at work, which I can only assume means that we are working hard against our employers because we hate coming to work…but probably stopping short of outright sabotage. The chart from my deck doesn’t do a great job of highlighting that almost 70% of us are either actively or passively disengaged. Seventy percent!

Something is wrong here.

Some of my favorite quotes about work.

I’ll sum up with two of my favorite, sad quotes about the workplace. The first I found in a tweet, so it might not actually have been said by Cory Doctorow, but I liked it so much that I kept it. The second is from Office Space, which might be one of the better ethnographies of the workplace ever created.

We have fashioned a very bizarre existence indeed — one where we spend a lonely couple hours commuting to and from a workplace that we hate, where we’re quite clearly just cogs in a machine that prints cash for the global elite, nervously avoiding mistakes and covering our asses while we await computerization or redundancy.

Until then, try not to be too bummed out at work — it can get better.

By Clay Parker Jones profile image Clay Parker Jones
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Organization Design