A business is a city, not a family

Grant McCracken debunks the conventional metaphor of the business as a family:

When asked to describe a company, the CEO will almost invariably give us an ingratiating smile and say, “We’re a family.”

Employees are also tempted by the metaphor, and in happier moments, they will enthuse, “this really is my family.”

The truth is painfully otherwise. The organization will use the employee as long as it suits and then jettison this employee without a flicker of remorse. And often not even so much as an explanation. One day you’re there. The next day you’re gone.

Try that with your family. “Dad, I’m sorry but you’re fired. Mom, you have to go too. We’re cutting back. What, no, of course we’re sorry. You’ve done a great job. But things change. We want you out of here by end of day. And we’re going to need your ID back. Hand it over.”

“Firing” and “family” never intersect in our culture. Ever.

The use of this metaphor is often manipulative, an attempt by managers or owners to goad employees to higher output and longer hours. After all, we’re family!

Last year, I wrote about Gareth Morgan’s How Metaphors Of Organizational Culture Frame Our Thinking (see Metaphors matter: Talking about how we talk about organizations). He lists a great number of metaphors in general use: organizations as machine, organism, brain, culture, political systems, psychic prisons, flux and transformation, or instruments of domination. And to which we can add the unhelpful organization as family.

But Morgan’s greatest contribution is to untangle the back story of the use of metaphors about organizations: they are employed at different times to elicit a response in the listener. For example, considering the organization as an organism is often applied when a company is confronted with the need to undertake drastic changes (a layoff), and those can be characterized as ‘evolving to environmental pressures’. Behind closed doors, senior management discussed the round of layoffs in terms related to the organization as a machine, and how it’s time to ‘retool the shop floor’.

It’s my bias, but perhaps the most productive metaphor for today’s organizations might be the city. Some aspects of what happens in cities is centrally controlled, like the construction of streets, transit, and infrastructure. But the overwhelming majority of what happens in cities — and what attracts people to live in them — is not centrally controlled: it is a bottom-up, emergent fog of millions of individual decisions, relations, and connections. Someone decides to open a deli where a tobacco shop has closed. Three friends start a business, and move across town to a low-rent neighborhood, and begin a cascade of events that accelerates gentrification there. A global conglomerate sells its office tower, and moves its headquarters to some other city.

Geoffrey West and Luis Bettencourt are two former nuclear physicists that wanted to get at the magic of cities. They amassed huge amounts of data, and revealed a fundamental law that drives the productivity of cities:

Jonah Lehrer, A Physicist Turns the City Into an Equation

After two years of analysis, West and Bettencourt discovered that all of these urban variables could be described by a few exquisitely simple equations. For example, if they know the population of a metropolitan area in a given country, they can estimate, with approximately 85 percent accuracy, its average income and the dimensions of its sewer system. These are the laws, they say, that automatically emerge whenever people “agglomerate,” cramming themselves into apartment buildings and subway cars. It doesn’t matter if the place is Manhattan or Manhattan, Kan.: the urban patterns remain the same. West isn’t shy about describing the magnitude of this accomplishment. “What we found are the constants that describe every city,” he says. “I can take these laws and make precise predictions about the number of violent crimes and the surface area of roads in a city in Japan with 200,000 people. I don’t know anything about this city or even where it is or its history, but I can tell you all about it. And the reason I can do that is because every city is really the same.” After a pause, as if reflecting on his hyperbole, West adds: “Look, we all know that every city is unique. That’s all we talk about when we talk about cities, those things that make New York different from L.A., or Tokyo different from Albuquerque. But focusing on those differences misses the point. Sure, there are differences, but different from what? We’ve found the what.”

And what is the what? They found that when cities double in size, they require a smaller-than-double increase in resources, like gas stations, restaurants, and hospitals. Only 85%, in fact. This has important ramifications for economics and social policy, because it means that tilting toward larger cities is actually more sustainable.

Note that the productivity of cities is not only in the area of reduced costs. A city of 10 million will produce more than double the number of patents of a city of 5 million, and that factor is also that same 15%. The emergent order that is lurking in the fabric of cities’ mess means that more connections are made, deals closed, and start-ups are launched as cities grow, and in a superlinear fashion.

But companies don’t work that way, you might respond. As businesses grow the productivity per employee goes down. Yes, and that seems to counter my assertion that businesses might best be considered as cities. But is doesn’t, given the following coda: businesses are cities, but they are being too centrally controlled to become superlinear.

Imagine a hivemind city, where all inhabitants work for the state, all decisions are centrally controlled, and nothing is left to chance or individual inspiration. That was the ideal for the Soviet Union, and look how that worked out.

But today’s business is way too rigid and controlled to get to superlinearity. That’s the fault of our contemporary way of work. The first step is to take the metaphor of ‘business as city’ as the goal, and to begin to break down the barriers in our way of work that block us from getting there. This translates to higher autonomy for all, and looser controls on a great deal of what goes on.

Yes, infrastructure still needs to be centrally controlled, but much more of the vibrant, experimental, and fluid nature of cities need to be injected into the DNA of business. Otherwise, we will be giving up the chance to learn from our own greatest productivity tool: cities.