Organizational Taxes

There are some papers/books that are transformative for me; after I read them, I simply don’t see the world in the same way any longer. Off the top of my head, I can think of three: Melvin Conway’s How do Committees Invent?, Laura Mulvey’s Visual Pleasure and Narrative Cinema, and Feldman and Pentland’s Reconceptualizing Organizational Routines as a Source of Flexibility and Change. I want to use the last for today’s jumping off point.

One of the points of Feldman and Pentland is that many small changes in an organization’s routines (processes) are often more impactful than one big change. By making a lot of small changes, you go further and faster compared to a single big change. In addition, smaller changes are likely to be easier to adopt permanently, although I can’t remember if they called this out in the article.

All of these factors provide an organization a path for rapid improvement. But, these also provide an organization with a fast-track way to make things much, much worse. It’s a concept I think of as an “organizational tax.” Basically, every organization has some processes that are essentially a tax on worker. These are processes that overall, are a net productivity loss.

These taxes are rarely huge – maybe at worst, each one is 5%. (If it were any larger, this wouldn’t be a “tax” per se, in that it would have some useful function) However, and this is very important, their effect compunds over time. This means with one additional 3% tax per quarter, a year later you’re 10% less productive, and two years later, you’re almost 25% less productive.

This has been the situation at work for quite a while. Every few months, there is a new requirement or process step. None of them are huge, and when people voice concerns, the response is usually something along the lines of “Work more efficiently,” or “Set expectations with your stakeholders.”

This is a reasonable response for the first tax. But, when it happens again and again, it misses the cumulative effect. This cumulative effect is a stressor on the organization, and I think, is particularly toxic to employee morale. There is a very real sense that the “good old days” really were good, compared to today, and that’s hard to deal with.

The “obvious” solution here is that any new organizational tax must also come with an update to job descriptions. I am certain that there are reasonably good HR reasons why you do not put individual policies into a job description, but the exercise would be both a useful friction to over-eager mandates, and help the managers that are involved in the re-writing to adjust their expectations for leveling / ranking exercises.