If your organization is in a state of malevolent stagnation, as defined here by our hierarchiologist, there's little hope-but you should at least read his remarks to find out how you got there
The Law of Failure, described in detail earlier in these pages (May, 1976), clearly reveals that
Failure to fail fully is a fools folly.
Specifically, the Law holds that if one's level of crises exceeds 63 per cent of the dismissal level before the earliest promotion might be expected, quick action is needed. New crises should be introduced as rapidly as possible in order to pass quickly through the forbidden zone of minor failure. Every effort should be made to exceed the major failure level quickly, for once a person is "safely" above the major failure level, his job is secure. Management will be unable to find anyone "qualified" to take over such a project. This strategem has since become known as Putt's Ploy. It is one of the most effective tools for achieving success in most large technical organizations.
But is Putt's Ploy an aberration of an otherwise smoothly running organization? Or is it a logically consistent component of a well-tuned innovative technocracy?
Surprisingly, the latter may be the case, because many innovative organizations use a punishment-reward system that literally invites troubled technocrats to seek success through Putt's Ploy.
This is shown by Curve A, for innovative hierarchies, in the accompanying illustration. Increasingly large positive values of y correspond to increasingly large rewards, and negative values of y correspond to punishment. Similarly, positive values of x correspond to success, and negative values, to failure. In innovative systems, it can be seen that small punishments occur only for small failures. Otherwise, relatively large rewards can be expected as the magnitude of either success or failure increases.
Such a reward system may be justified because major innovations are not achieved without substantial risks and because success or failure of high-technology projects cannot be predicted until long after they have been initiated. To encourage necessary risks, it is thus argued, rewards should be given to employees in proportion to the risks they take - whether these risks lead to successes or failures. A number of experiences have revealed, however, that some punishment for failure is necessary in order to assure that there are more desirable innovations than undesirable ones. These concepts are revealed both in Curve A and in a formal law:
Reward big failures and successes;
punish small failures.
The other curves in the illustration characterize substantially different reward systems for aggressive, conservative and stagnant hierarchies. Readers are urged to ponder the impact of these other systems on employee performance. Theoretically inclined readers will want to make use of the equations as well as the curves, because this provides greater flexibility. By properly adjusting the parameters a, b and c. these equations can be tuned to satisfy the requirements of almost any organization.
All organizations, in time, become more conservative. The weight of maturity and experience forces the ends of the punishment-reward curve down - particularly along the negative x-axis where failures occur. The technical name for this process is hierarchiological aging.
It begins as the innovative reward system is transformed, first into the aggressive type and then into the conservative type, shown graphically in the illustration. Finally, heavy penalties, given even for small failures in conservative organizations, engender a sense of resentment toward those who succeed. A destructive undercurrent thwarts projects that might otherwise have been successful. Persons responsible for successful innovations are vigorously attacked by the system. Eventually, the punishment for success is as large as for failure. The employees refuse to accept any risk at all, and the organization finally succumbs to the Law of Stagnation:
Organizational stagnation occurs
when the punishment for success is
as large as for failure.
In advanced cases of hierarchiological aging and organizational stagnation, no decisions are made that are not fully specified by "the book." Any attempt to deviate from the status quo is resisted. This is the familiar condition of most government bureaucracies, of the military and of educational institutions.
Two punishment-reward systems for stagnant hierarchies are shown in Part D of the illustration. The lower, dashed curve represents malevolent stagnation, in which all activity, including inactivity, is punished. Enlightened stagnant bureaucracies have learned, however, to offer some small rewards for those who follow the conformist path. This is depicted by the solid curve.
Although the degree of stagnation is not altered, positive rewards do make life more pleasant for the employees. Thus, stagnant organizations with positive rewards are properly described as being in the formal state of beneficent stagnation.
Avoiding hierarchiological aging must be the Number 1 goal of informed technical managers. They should stand firmly on the positive and negative x-axes, holding high the two ends of the reward-system curve. Skill is required to maintain the proper sag of the curve to provide the desired level of punishment for small failures.
Employees who understand the system can rise in it. Soon they too can experience the satisfaction of holding both ends of the curve.