Klein organizations

In a Weekly Digest in April, I posted a link to Explaining Tech's Notion of Talent Scarcity. In my head, I implicitly linked this to Burton Klein's classification of firms:

Type 1: “Happy warrior rationality” is associated with ideological outbreeding and is commonly employed in making fast history.

Type 2: “Middle-class rationality” is associated with ideological inbreeding and is commonly employed in making slow history.

Type 3: “Accounting rationality” is associated with a zero rate of ideological change and is commonly employed by profit maximizing firms in a temporary equilibrium with an unchanging outside environment.

Type 4: “Conservation-of-power rationality” is associated with organizations which have such a lot ability to deal with unpredictability that they must manipulate the rules of the game if they are to survive.

Today, I saw a tweet that made me think of this again, so I'll go into more detail.

There is not of course a one-to-one relationship between the talent models and the Klein classifications, but if you put them together you'll see interesting connections.

Type 3 and Type 4 organizations are full of the "processes" and "rules" in the tweets. This environment is insufferable to top engineers, and they will either buck the system or leave.

From a management point of view, this can simply happen, it can be implicitly allowed to happen, or you can make it happen structurally. The tweet thread mentions all these options.

In my opinion, when Google was made as a subsidiary of Alphabet, part of what was going on was a restructuring to isolate the genuinely creative things that Google used to be known for from the insufferable process-oriented behemoth that it actually is today. Nothing really interesting happens in Google itself anymore, all the people who work there just need to keep the ad-based money machine running.