Part II: Designing Organizations: How Efficiency Became King

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INSITUM Vox

7 min readJan 23, 2018

Insitum is a network of companies connected by a common purpose: bringing human-centered design to the world. We have the “new” world covered with six offices in both Americas, and an office in the “old” world in Barcelona. Slowly but surely, we are creeping towards Asia and Africa. We have been around for fifteen years — and 2000 projects later — we’ve decided it’s time for some changes.

Like many international organizations we have local cultures informing what we do, how we are organized, and how we approach our various markets. We have reached that critical size when it becomes clear that we need some systems to help us scale, so we recently decided to reorganize simultaneously into nine separate practice areas across our seven offices to help grow our capabilities, spread expertise, and specialize our resources. We’re trying to figure out how to make this whole process as efficient as possible, too. But herein lies, what I think, is one of our biggest obstacles.

Right now, we have local teams, local and international clients, local taxation and PNLs, international challenges and multiple currencies, international practice teams and two sets of PNLs to track. That might seem like a lot, because it is. My accountant jokes that we have “the complexity of an oil company with the throughput of a Popsicle stand.” We have grown since that comment, so now it’s a pretty successful international popsicle stand selling to the largest companies on the planet, working in many, many countries. Regardless, you get the gist.

There are seemingly endless ways we might move forward organizing ourselves, and each way contains its own set of unintended consequences. This has led me to ponder how we got to the structures we have, and why, right now, they sometimes feel confining.

The “one right way”

Let’s take a trip back in time. One man — it would seem — is single handedly responsible for giving us our overarching obsession with efficiency: Frederick Taylor. Back in the height of the Industrial Revolution, Taylor is famous for transforming companies using time motion studies, which unlocked enormous amounts of productivity by understanding and dismantling systems of repeatable tasks. He figured out the one right way to complete them.

He broke up operations into their component parts and set goals for each of those parts. He succeeded in distilling the human labor component of work in the industrial age, and he helped to synchronize it with the amazing technological progress that was enabled by the machines driving that epoch. His methodology spread like a virus, and many organizations dreamed of repeating his process in all sorts of contexts. It is a completely understandable and pragmatic narrative within manufacturing, hospitals, government services, and in our military services. Similar narratives have made waves in the past with Total Quality Management, Six Sigma, and most recently with Design Thinking.

But pay close attention to those industry examples and what they represent. Essentially, they are all closed systems. They are small walled in universes where it is possible to discover and know all the laws of inputs and outputs, the causes and effects acting upon their worlds, as complicated as they may be.

Let’s say you have a factory that makes small motors for appliances. Within those factory walls you can eventually figure out all of the operations by separating them into the tasks and time allotted to make them. It is a knowable and discoverable quest. If you have someone who is really good at something relatively complex — like machining out holes for the manifold — you can observe that person as well as several other people who do the operation differently. People who did this work often figured out ways they liked to do their operations, and they got good at doing them their way. They held most of the know how inside their heads much like a medieval craftsman once did. In order to pass that knowledge on, you hired worthy apprentices to learn it over time, but that kind of knowledge transfer was not systemic.

One of the most important tools of this movement: the stopwatch

In our practice, I believe we are not making motors, we are actually working on making ourselves better. We grow our talent and give them the capabilities to work on the challenges our clients require solutions for. I suppose, in a way, our clients’ challenges are the manifolds we are drilling into, so we have a similar issue. How do you get more senior and experienced people to mentor the less experienced people? Even more challenging, how do you enable continual growth even for the ones holding most of the knowledge? If we stop the flow of personal growth, we will most likely stagnate, perish and suffer a boring death of a thousand boring projects that have no impact. It’s a profound and fundamentally different model than a factory in the 1920s.

Taylorism was a way to systemically obtain, document, and organize a type of knowledge, and to figure out the best way to accomplish a task — in terms of more or less time — and then set that as the one right way to do that task. It made workflow and the transfer of knowledge a systemic process. If you repeat that process for everything, pretty soon you have a very efficient, if not the most efficient way, to build a motor within your factory. It won’t help you with marketing, though — the philosophy behind that came much later.

Taylorism didn’t help anyone predict capital needs either, but it was a huge improvement in productive capacity the likes of which humanity had never seen. It was no doubt breathtaking in its magnificence. At long last, human organizations could match the productive capacity of the machines they were inventing.

(But note what is not considered important in closed systems: individual autonomy within the labor force. Taylorism made it possible to take out higher order thinking from operations by establishing protocols and procedures which allowed the use of lesser skilled, lower paid people to execute the orders given.)

It was at the dawn of this one right way to organize work that we saw the division of management versus labor that we still have today. Though we did not sit around singing songs as a flat communal group before Taylorism, this kind of division between roles and hierarchy has existed since tribes and empires.

But what Taylorism did make new was the idea that you could provide intensely codified and sequential instructions for workers as they performed certain tasks in a certain order at a particular cadence. The very idea of a class of executives who would organize and optimize another group of workers was born as Scientific Management. Of course, it required cognitive effort and expertise to be successful as a manager, but more importantly, it required the context to be discoverable, understandable, and predictable.

Efficiency is actually an ideology. Ideology gives us clear, orthodox reasons why we need to do certain things over other things, and it promises vast rewards for upholding its nature. Ideology always sells itself as the one right way. However, most ideologies hate ambiguity. Ambiguity is always a threat to the absolute power of any given regime, which is why even seventeen years into the 21st century the last century still has its grasp around our neck. For better or for worse, the 21st century is already a significantly different terrain to live and conduct business in than the 20th century. If we want to be successful in the 21st century, we will need to hold a place for efficiency at the business table, but we will have to make plenty of other seats available, too.

This is why we need to think really hard about the philosophies guiding the operational structures we build. If we spend too much time thinking about efficiency, we may miss the boat on being effective. Or successful. Or resourceful. The nuances of today’s globalized world can’t be adequately addressed by outdated models of prioritizing what is efficient over everything else.

Part I: Designing Organizations: What’s wrong with efficiency?

Part III: Designing Organizations: Efficiency needs some company

Part IV: Designing Organizations: The Perennial Search for Inspiration

Part V: Designing Organizations: What’s next? Designing Organizations for the 21st Century

Part II: Designing Organizations: How Efficiency Became King

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Written by Ric Edinberg