The Corporate Algorithm

Leave a comment
orgdesign

I hypothesize that the management overhead which makes corporations grow sub-linearly is due to the limited information processing capability of individual humans. People at the top do not have local on-the-ground information: how are individual products performing, what are customers’ complaints etc. And the rank-and-file folks on the ground do not have the relevant high-level information: how does what I’m doing translate to the value that the corporation as a whole seeks to maximize? In fact, the the flow of value and information is so complex that employees have pretty much given up on determining that relationship, and know of it only at a macro P&L-center level. […] An algorithm will have no such problems with acting on both global as well as fine-grained local information. In fact, I suspect that the more information it gets to act on, the better decisions it will make, making automatic corporations grow super-linearly.

This is what a Google Software Engineer thinks of the organization of today and the possibilities for tomorrow. We are in violent agreement.

Leave a Reply