Monday, August 17, 2020

Most "mandatory requirements" in corporations are imaginary

In my day job I work as a consultant. Roughly six months ago my current client had a non-negotiable requirement that consultants are not allowed to work remotely. Employees did have this privilege. This is, clearly, a stupid policy and there have been many attempts across the years to get it changed. Every time someone in the management chain has axed the proposal with some variation of "this policy can not be changed because this is our policy and thus can not be changed", possibly with a "due to security reasons" thrown in there somewhere.

Then COVID-19 happened and the decision came to lock down the head office. Less than a day after this everyone (including consultants) got remote working rights, VPN tokens and all other bits and bobs. The old immutable, mandatory, unalterable and just-plain-how-we-do-things rules and regulations seemed to vanish to thin air in the blink of an eye. The question is why did this happen?

The answer is simple: because it became mandatory to due to external pressure. A more interesting question would be if it really was that simple, how come this had not happened before? Further, are the same reasons that blocked this obvious improvement for so long are also holding back other policy braindeadisms that reduce employee productivity. Unfortunately the answers here are not as clear-cut and different organizations may have different underlying causes for the same problem.

That being said, let's look at one potential causes: the gain/risk imbalance. Typically many policy and tech problems occur at a fairly low level. Changes benefit mostly the people who, as one might say, are doing the actual work. In graph form it might look like this.

This is not particularly surprising. People higher up the management chain have a lot on their plate. They probably could not spend the time to learn about benefits from low level work flow changes even if they wanted to and the actual change will be invisible to them. On the other hand managers are fairly well trained to detect and minimize risk. This is where things fall down because the risk profile for this policy change is the exact opposite.

The big question on managers' minds (either consciously or unconsciously) when approving a policy change is "if I do this and anything goes wrong, will I get blamed?". This should not be the basis of choice but in practice it sadly is. This is where things go wrong. The people who would most benefit from the change (and thus have the biggest incentive to get it fixed) do not get to make the call. Instead it goes to people who will see no personal benefit, only risk. After all, the current policy has worked well thus far so don't fix it if it is not broken. Just like no one ever got fired for buying IBM, no manager has ever gotten reprimanded for choosing to uphold existing policy.

This is an unfortunate recurring organizational problem. Many policies are chosen without full knowledge of the problem sometimes this information is even impossible to get if the issue is new and no best practices have yet been discovered. Then it becomes standard practice and then a mandatory requirement that can't be changed, even though it is not really based on anything, provides no benefit and just causes harm. Such are the downsides of hierarchical organization charts.


  1. add to it that most managers are not interrested in the details.
    preferably be as far off the teschnical side as possible, but blame you when it goes wrong..

  2. Everything you assert is observable and rational except to demonize hierarchy. Absence of hierarchy doesn't alter human aversion to loss or punishment. They are persistent and ubiquitous in holacracy and similar structures as well.

  3. Exactly. If you add the two plots together as benefit-risk, you will see that the CEO has negative payoff from doing anything "nice" for underling employees. Pure rational agents will never do it.

    BTW, what did you use to generate the plots?

  4. Some companies explain such policies as the core of their culture. The objective is to promote and nourish creativity and keep this within the company. A lot has been written about this. Onsite collaboration drives creativity. That’s why companies invest into office space so much $$. They want you not only to contribute code but your thinking, sharing, arguing with other workers and thus contribute to some enhancements in other areas outside of your responsibilities. This maximizes the value of you as their asset and drives profits. Is this fare to both consultants and employees? I don’t think so. But this is capitalism, my friend!

  5. "Just like no one ever got fired for buying IBM" - Uh, Look up the QLD Government IBM purchasing ban on IBM that has been enduring now for 7 years.

  6. Very true.. most of the policies of a company are just to say 'No' to their employees... We cant do this because of blah blah policy..