The Gervais Principle of company hirerarchy

This is something that I recently came across, it offers an interesting perspective into how organizations and people in them function. I have re-produced a few paragraphs from the blog ribbonfarm. 

The Office, the TV show, is not a random series of cynical gags aimed at momentarily alleviating the existential despair of low-level grunts. It is a fully realized theory of management that falsifies 83.8% of the business section of the bookstore.The theory begins with Hugh MacLeod’s well-known cartoon, Company Hierarchy .

Hugh MacLeod’s cartoon is a pitch-perfect symbol of an unorthodox school of management based on the axiom that organizations don’t suffer pathologies; they are intrinsically pathological constructs.
The Sociopath (capitalized) layer comprises the Darwinian/Protestant Ethic will-to-power types who drive an organization to function despite itself. The Clueless layer is what Whyte called the “Organization Man,” but the archetype inhabiting the middle has evolved a good deal since Whyte wrote his book (in the fifties). The Losers are not social losers (as in the opposite of “cool”), but people who have struck bad bargains economically – giving up capitalist striving for steady paychecks.

A Sociopath with an idea recruits just enough Losers to kick off the cycle. As it grows it requires a Clueless layer to turn it into a controlled reaction rather than a runaway explosion. Eventually, as value hits diminishing returns, both the Sociopaths and Losers make their exits, and the Clueless start to dominate. Finally, the hollow brittle shell collapses on itself and anything of value is recycled by the sociopaths according to meta-firm logic.

Based on the MacLeod lifecycle, we can also separate the three layers based on the timing of their entry and exit into organizations. The Sociopaths enter and exit organizations at will, at any stage, and do whatever it takes to come out on top. The contribute creativity in early stages of a organization’s life, neurotic leadership in the middle stages, and cold-bloodedness in the later stages, where they drive decisions like mergers, acquisitions and layoffs that others are too scared or too compassionate to drive. They are also the ones capable of equally impersonally exploiting a young idea for growth in the beginning, killing one good idea to concentrate resources on another at maturity, and milking an end-of-life idea through harvest-and-exit market strategies.

The Losers like to feel good about their lives. They are the happiness seekers, rather than will-to-power players, and enter and exit reactively, in response to the meta-Darwinian trends in the economy. But they have no more loyalty to the firm than the Sociopaths. They do have a loyalty to individual people, and a commitment to finding fulfillment through work when they can, and coasting when they cannot.

The Clueless are the ones who lack the competence to circulate freely through the economy (unlike Sociopaths and Losers), and build up a perverse sense of loyalty to the firm, even when events make it abundantly clear that the firm is not loyal to them. To sustain themselves, they must be capable of fashioning elaborate delusions based on idealized notions of the firm — the perfectly pathological entities we mentioned. Unless squeezed out by forces they cannot resist, they hang on as long as possible, long after both Sociopaths and Losers have left (in Douglas Adams’ vicious history of our planet, humanity was founded by a spaceship full of the Clueless, sent here by scheming Sociopaths). When cast adrift in the open ocean, they are the ones most likely to be utterly destroyed.

The Gervais Principle is this:

Sociopaths, in their own best interests, knowingly promote over-performing losers into middle-management, groom under-performing losers into sociopaths, and leave the average bare-minimum-effort losers to fend for themselves.

The Gervais principle differs from the Peter Principle, which it superficially resembles. The Peter Principle states that all people are promoted to the level of their incompetence. It is based on the assumption that future promotions are based on past performance. The Peter Principle is wrong for the simple reason that executives aren’t that stupid, and because there isn’t that much room in an upward-narrowing pyramid. They know what it takes for a promotion candidate to perform at the to level. So if they are promoting people beyond their competence anyway, under conditions of opportunity scarcity, there must be a good reason.

Dastardly as all this sounds, it is actually pretty efficient, given the inevitability of the MacLeod hierarchy and life cycle. The Sociopaths know that the only way to make an organization capable of survival is to buffer the intense chemistry between the producer-Losers and the leader-Sociopaths with enough Clueless padding in the middle to mitigate the risks of business. Without it, the company would explode like a nuclear bomb, rather than generate power steadily like a reactor. On the other hand, the business wouldn’t survive very long without enough people actually thinking in cold, calculating ways. The average-performing , mostly-disengaged Losers can create diminishing-margins profitability, but not sustainable performance or growth. You need a steady supply of Sociopaths for that, and you cannot waste time moving them slowly up the ranks, especially since the standard promotion/development path is primarily designed to maneuver the Clueless into position wherever they are needed. The Sociopaths must be freed up as much as possible to actually run the business, with or without official titles.