Rahn Curve on a company scale
When managers start to breed managers
“I had no idea there was such a thing as a CDO manager,” said Eisman. “I didn't know there was anything to manage.”
The Big Short by M. Lewis
“Parkinson's Fourth Law: The number of people in any working group tends to increase regardless of the amount of work to be done.”
C. Northcote Parkinson
“Delay is the deadliest form of denial.”
C. Northcote Parkinson
“Administrators make work for each other so that they can multiply the number of their subordinates and enhance their prestige.”
C. Northcote Parkinson
These are just the catchy quotes, but they suit my narrative’s purpose.
Since I moved into Product Management, I had the bad luck of primarily working for the big guys - industry leaders, the heavy lifters and the grand fishes in general, which formed my product thinking in ways I couldn’t even imagine. Slow. Fundamental. With assurances.
At times, I did catch myself thinking of all the wasteful things I had to face in order to push things through.
So as a fresh PM/PO, I went looking for startups and smaller companies to balance that, to repair my mental models, one might say. And I kinda did.
If I were to compare, the kill chain between smaller and bigger enterprises differs in size and quality (by that, I basically mean the time-to-market or the time-to-resolve, i.e. time one needs to push the solution into the world without asking everyone down the chain about the colour preferences).
Getting things done takes many more handshakes, back-rubbing, eye-stabbing, and sheer politics in more ‘prominent’ companies.
I.e. you can’t just do things as it would break the procedure.
There is always a myriad of committees, meetings and managers to mince before we get to the meat.
And as I was reading about the Rahn Curve, I realised the similarity between the state’s curve and its local tiny microcosm - the enterprise - ain’t that different.
Just replace the ‘government’ with ‘management’.
There is always a set number of people, an optimal number to manage every project, given its complexity.
I didn’t realise it then, but Mochary was sharing his insights on this on Lenny’s podcast. He talked exactly about that.
As they were cutting staff, he encouraged employers to think twice about firing even more. As a cleanup exercise, a ‘fasting’ period if you wish, during which you would get rid of the useless C and B players who tend to grow in size if the balance looks right.
As the company grows in size, the number of useless people grows on a constant basis. These people create tasks in order to justify their presence. And the more successful ones are giving an excellent show to assure everyone that’s how things must be done from now on.
The new dogma is born.
As said before, Mochary actually advises firing people to get rid of stuff that shouldn’t be done. Per Pareto’s rule, we get our 80% of revenue out of 20% of actions we sometimes manage to identify.
The new freeloaders tend to focus on the remaining 80%, a land of opportunity for B’s and C’s, folks who’ll never leave you.
Again, remember the classic example by Parkinson:
Between 1914 and 1928 he provides data to show the decline in number of ships (68%) and Ships Crew (31%) compared with the increase in Clerks (40%) and Admiralty Officials (78%).
Parkinson’s Law 1. Work expands to fit the time available for its completion. – What's the PONT (whatsthepont.blog)
The number of freeloaders grows proportionally to the directions and your company’s tempo.
Suppose you don’t clear up the ranks to allow more capable people to join you and fail to promote those who deserve to run their own ships and airplanes, you will never achieve any meaningful progress (long-term, that is).
You obviously can count on some rather agreeable B-players who will grudgingly do the job while seeing no alternatives for themselves. The mortgages will keep them with the company, but their existence will be about everything but motivation.
Firing is a blessing.
Firing is self-preservation.
Handling the balance within the organisation is an art, and you HR folks probably aren’t good at it.
Mine weren’t.