Gyroscopic Investing

Understanding Organizational Stupidity

Is it morning in America again, or is the bubble that is the American economy about to pop (again), this time perhaps tipping it into full-blown collapse in five stages with symphonic accompaniment and fireworks? A country blowing itself up is quite a sight to behold, and it makes us wonder about lots of things. For instance, it makes us wonder whether the people who are doing the blowing up happen to be criminals. (Sure, they may be in a manner of speaking—as a moral judgment passed on the powerful by the powerless—but since none of them are likely to see the inside of a jail cell or even a courtroom any time soon, the point is moot. Let's be sure to hunt them down once they try to run and hide, though.) But at a much more basic and fundamental level, a better question to ask is this one:

“Why are we being so fucking stupid?”?

What do I mean when I use the term “fucking stupid”?? I do not mean it as a term of abuse but as a precise, if unflattering, diagnosis.

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I never ascended the ranks of middle management, probably due to my tendency to speak out at meetings and throw around terms such as “nonsensical,”? “idiotic,”? “brainless,”? “self-defeating”? and “fucking stupid.”? If shushed up by superiors, I would resort to cracking jokes, which were funny and even harder to ignore. Neither my critical faculties, nor my sense of humor, are easily repressed. I was thrown at a lot of special projects where the upside of being able to think independently was not negated by the downside of being unwilling to follow (stupid) orders. To me hierarchy = stupidity in an apparent, palpable way. But in explaining to others why this must be so, I had so far been unable to go beyond speaking in generalities and telling stories.

And so I was happy when I recently came across an article which goes beyond such “hand-waving analysis”? and answers this question with some precision. Mats Alvesson and André Spicer present “A Stupidity-Based Theory of Organizations”? in which they define a key term: functional stupidity. It is functional in that it is required in order for hierarchically structured organizations to avoid disintegration or, at the very least, to function without a great deal of internal friction. It is stupid in that it is a form intellectual impairment: “Functional stupidity refers to an absence of reflexivity, a refusal to use intellectual capacities in other than myopic ways, and avoidance of justifications.”? Alvesson and Spicer go on to define the various “...forms of stupidity management that repress or marginalize doubt and block communicative action”? and to diagram the information flows which are instrumental to generating and maintaining sufficient levels stupidity within organizations. What follows is my summary of their theory. Before I start, I would like to mention that although the authors' analysis is limited in scope to corporate entities, I believe that it extends quite naturally to other hierarchically organized bureaucratic systems, such as governments.

Alvesson and Spicer use as their jumping-off point the major leitmotif of contemporary management theory, which is that “smartness,”? variously defined as “knowledge, information, competence, wisdom, resources, capabilities, talent, and learning”? has emerged as the main business asset and the key to competitiveness—a shift seen as inevitable as industrial economies go from being resource-based to being knowledge-based. By the way, this is a questionable assumption; do you know how many millions of tons of hydrocarbons went into making the smartphone? But this leitmotif is pervasive, and exemplified by management guru quips such as “creativity creates its own prerogative.”? The authors point out that there is also a vast body of research on the irrationality of organizations and the limits to organizational intelligence stemming from “unconscious elements, group-think, and rigid adherence to wishful thinking.”? There is also no shortage of research into organizational ignorance which explores the mechanisms behind “bounded-rationality, skilled incompetence, garbage-can decision making, foolishness, mindlessness, and (denied) ignorance.”? But what they are getting at is qualitatively different from such run-of-the-mill stupidity. Functional stupidity is neither delusional nor irrational nor ignorant: organizations restrict smartness in rational and informed ways which serve explicit organizational interests. It is, if you will, a sort of “enlightened stupidity”?:

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The functions of stupidity management are to project an image, to encourage stupidity self-management in defense of that image, and to block communication whenever anyone lapses into reflexivity or substantive reasoning, or demands justification. Communication is blocked through the exercise of managerial power. The authors discuss four major ways in which managers routinely exercise their power in defense of functional stupidity: direct suppression, setting the agenda, ideological manipulation, and fetishizing leadership. Of these, direct suppression is by far the simplest: the manager signals to the subordinate that further discussion will not be appreciated, threatening or carrying out disciplinary action if the signaling doesn't work. Setting the agenda is a more subtle technique; for instance, a typical ploy is to require that all criticisms be accompanied by “constructive suggestions,”? placing beyond the pale all problems that do not have immediate solutions (which are the vast majority). Ideological manipulation is more subtle yet; one common technique is to emphasize action, at the expense of deliberation, as expressed by the corporate cliché “stop thinking about it and start doing it!”? Finally, fetishizing leadership involves splitting each group into leaders and followers, where the leaders seek to make their mark, whatever it takes, and to get promoted quickly. To do so successfully, they must suppress the critical faculties of those around them, compelling them to act as obedient followers.

Functional stupidity is self-reinforcing. Stupidity self-management, reinforced using the four managerial techniques listed above, produces a fragile, blinkered sort of certainty. By refusing to look in certain directions, people are able to pretend that what is there does not exist. But reality tends to intrude on their field of perception sooner or later, and then the reaction is to retreat into functional stupidity even further: those who can ignore reality the longest are rewarded and promoted, setting an example for others.

AdamA wrote: I think understanding and accepting the idea of "functional stupidity" is key to surviving and succeeding within any organization that consists of more than two people.

murphy_p_t wrote: interesting...wonder if there's a parallel how nations operate?

MediumTex wrote:

AdamA wrote: I think understanding and accepting the idea of "functional stupidity" is key to surviving and succeeding within any organization that consists of more than two people.

It's sort of liberating to realize that this sort of thing happens everywhere, not just where you happen to work.

rocketdog wrote:

MediumTex wrote:

AdamA wrote: I think understanding and accepting the idea of "functional stupidity" is key to surviving and succeeding within any organization that consists of more than two people.

It's sort of liberating to realize that this sort of thing happens everywhere, not just where you happen to work.

Liberating... or depressing?  I'm sending this article to my wife -- her company is a textbook example of functional stupidity.  The stories she tells me make me wonder how they've managed to stay in business for as long as they have, let alone be successful.

Libertarian666 wrote: "Idiocracy". It's a "pre-documentary".

HB Reader wrote: This discussion of stupidity has to remind anyone who has worked for an extended time in any organization (large or small, however well-intentioned) of the reality of the Peter Principle.

The Peter Principle is a proposition that states that the members of an organization where promotion is based on achievement, success, and merit, will eventually be promoted beyond their level of ability. The principle is commonly phrased, "Employees tend to rise to their level of incompetence." In more formal parlance, the effect could be stated as: employees tend to be given more authority until they cannot continue to work competently. It was formulated by Laurence J. Peter and Raymond Hull in their 1969 book The Peter Principle, a humorous[1] treatise, which also introduced the "salutary science of hierarchiology".

The principle holds that in a hierarchy, members are promoted so long as they work competently. Eventually they are promoted to a position at which they are no longer competent (their "level of incompetence"), and there they remain, being unable to earn further promotions. Peter's Corollary states that "n time, every post tends to be occupied by an employee who is incompetent to carry out its duties"[2] and adds that "work is accomplished by those employees who have not yet reached their level of incompetence." "Managing upward" is the concept of a subordinate finding ways to subtly manipulate his or her superiors in order to prevent them from interfering with the subordinate's productive activity or to generally limit the damage done by the superiors' incompetence.

MediumTex wrote:For myself, I am learning to be able to listen to stupid things with a poker face.  That is a great breakthrough for me.  When I was younger I thought it important to stop stupid things from happening as much as I could.  As I have matured, I realize that my actual job is to stay out of the way of stupid things as much as possible while maintaining my poker face.

rocketdog wrote:

MediumTex wrote:For myself, I am learning to be able to listen to stupid things with a poker face.  That is a great breakthrough for me.  When I was younger I thought it important to stop stupid things from happening as much as I could.  As I have matured, I realize that my actual job is to stay out of the way of stupid things as much as possible while maintaining my poker face.

Or, you can have fun with it and apply the techniques Machiavelli outlines in "The Prince", then sit back and watch the stupid people destroy each other. 

MediumTex wrote: Trying to have as much fun as possible in life is a good guiding principle for sure.

A wise person is one who can take stupid and metabolize it into fun.

Joseph Campbell wrote:Joyfully participate in the sorrows of the world.

MediumTex wrote:
For myself, I am learning to be able to listen to stupid things with a poker face.  That is a great breakthrough for me.  When I was younger I thought it important to stop stupid things from happening as much as I could.  As I have matured, I realize that my actual job is to stay out of the way of stupid things as much as possible while maintaining my poker face.

Stupid things were present before I got here and will be present after I am gone.  Ridding the world of that which is stupid is ultimately a quixotic endeavor.

AdamA wrote:

MediumTex wrote:
For myself, I am learning to be able to listen to stupid things with a poker face.  That is a great breakthrough for me.  When I was younger I thought it important to stop stupid things from happening as much as I could.  As I have matured, I realize that my actual job is to stay out of the way of stupid things as much as possible while maintaining my poker face.

Stupid things were present before I got here and will be present after I am gone.  Ridding the world of that which is stupid is ultimately a quixotic endeavor.

I agree with this, but sometimes I feel like I listen to too many stupid things in my work place.  I hold a supervisory position, so it's hard just to stay out of the way when people who work for you have silly ideas.  I am a very mild mannered person, so it takes a lot of energy for me to dissuade some these people.

(The fact that I hold a supervisory position is good evidence of the Peter Principle, by the way). 

MediumTex wrote: I like to think that an ER is a pretty practical no-nonsense place.

AdamA wrote: 2.  Our paramedics need to perform intubations.  (They don't.  A bag valve mask works fine for the very limited of respiratory arrests our EMS service sees).

MediumTex wrote:
Isn't there sort of an art to doing intubations properly that only comes from practicing?

I would think that paramedics wouldn't get enough practice to be able to get good at it.