It is not lost on me that I’m writing this as layoffs continue to climb in both the US federal government as part of the Department of Government Efficiency (DOGE) effort and also here in Silicon Valley. Large, profitable corporations (like Meta) are laying off their so-called “bottom 5%” of their employees.
Today’s post continues the Mistakes of Mainstream Management (MMM) series (Chapter 12) and explores how lack of understanding of the concept of interdependence results in ineffective organizational design, goal setting and overall decision making of mainstream management.
Table of Contents
How to shoot oneself in the foot?
Deming and Drucker are the two big names quoted often in Silicon Valley leadership circles when it comes to management thinkers. So, I was curious to know what they thought about the concept of interdependence.
These two are typically pitted against each other: Dr. Edwards Deming (who made the call to abolish Management by Objectives (MBO)) and the Management Guru, Peter Drucker (who first popularized MBO, which folks in Tech. might now recognize as OKRs).
But, when you dig into their works, they were not opposed to each other on the topic of today’s post: Interdependence. Here is an excerpt from Dr. Deming’s book, 'The New Economics' in which he articulates of how manufacturing companies typically shoot themselves in the foot:
"In M.B.O., as practiced, the company’s objective is parceled out to the various components or divisions. The usual assumption in practice is that if every component or division accomplishes its share, the whole company will accomplish the objective. This assumption is not in general valid: the components are most always interdependent. Unfortunately, efforts of the various components do not add up. There is interdependence. Thus, the purchasing people may accomplish a saving of 10 percent over last year, and in doing so raise the costs of manufacture and impair quality. They may take advantage of high-volume discount and thus build up inventory, which will hamper flexibility and responsiveness to meet unforeseen changes in the business. Peter Drucker was clear on this point, with deep understanding. It is unfortunate that many people do not bother to read his warning..."
And yes, Drucker is in absolute agreement with him! Here is an excerpt from his book, 'Management Tasks, Responsibilities, Practices':
"And one thing characterizes all genuine systems, whether they be mechanical, like the control of a missile, biological like a tree, or social like the business enterprise: it is interdependence. The whole of a system is not necessarily improved if one particular function or part is improved or made more efficient. In fact, the system may well be damaged thereby, or even destroyed. In some cases the best way to strengthen the system may be to weaken a part—to make it less precise or less efficient. For what matters in any system is the performance of the whole; this is the result of growth and of dynamic balance, adjustment, and integration rather than of mere technical efficiency. Primary emphasis on the efficiency of parts in management science is therefore bound to do damage. It is bound to optimize precision of the tool at the expense of the health and performance of the whole."
Now, pause and think about how the various departments of your company are pursuing their own OKRs and local efficiencies. Is there an different way to organize and not live in a world of prioritization conflicts, follow-ups, interruptions, escalations, etc?
Interdependence
Interdependence, in simple terms, explores what happens to a system (boundary and variables of which are chosen by the observer) when one or more parts of the system is removed or changed.
What happens to the other parts of the system and to the performance of the whole system if a part is removed? Or if it is changed, what further change/impact does it cause on other parts, which then in turn may change/impact the original part as well?
Mechanistic systems are complicated, the parts interact in deterministic ways. Complexity is the domain of non-linearity and surprise - here, the parts are interdependent.
The phenomenon of interdependence is very much applicable to corporations as well. But unfortunately many executives and managers hardly appreciate or even recognize the existence of this phenomenon.
Why is this important? Many mainstream management ideas and practices end up being ineffective and also actively harm the very goals executives and managers aim to achieve.
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