Perfecting informal organisations

From a purely financial perspective, the relationship between management and employees is the purchase by management of goods and services (that have been requested by customers) from the employees.


In traditional manufacturing companies very little veneer covers  the commerciality of this arrangement. The financial interests of the employees may be represented by trade unions who negotiate on their behalf with management, sometimes with equanimity and sometimes forcibly.


However, since modern corporations seek to create their own internal society in which money is not seen to be the driving factor, the relationship between management and employees cannot be allowed to remain soul-less and impersonal.

Instead, a more nuanced understanding is fostered in which it is understood that management are “the people who have to get things done” and employees are “the people who need to feel at home while doing their tasks”. The needs of management are functionally driven yet management remain “human”, and the needs of the employees are socially driven yet “they have to get the job done”.

Subsequently, management demand that employees “get the job done” but in return accommodate the employees personal and social needs. Employees, on the other hand, demand that management accommodate their personal and social needs but in return they “will get the job done”.

Interactions - complex

The greater the mutual understanding that develops between management and employees, the more they will work in harmony. How can companies strive to achieve this happy state of affairs?


From the perspective of the management – employee relationship, both management and employees are inherently in a state of conflict.

  • Management wish to be as personable as possible to the employees, however they are constrained from indulging the employees due to the need to demand the output of goods and services from them.
  • Employees wish to provide management with the greatest output of goods and services possible, but they are constrained from indulging management due to the need to enjoy their work-life balance.

The more employees enjoy their jobs, the smaller management’s quandary of how to maximise employee output while simultaneously providing for their personal and social needs will be. In other words, when employees perceive that their personal success and enjoyment lies in their work, they will not need management to goad them on to excel in their tasks.

Andy Capp

Quid pro quo

If the staff of an Internet Service Provider are wildly interested in networking connectivity and the Internet, it is likely that the ISP will be more successful than if staff feel that they have to put up with the drudgery of yet another day of enabling customers to surf the web.

In the first scenario (ISP staff are wildly enthusiastic about networking), there is very little “distance” between the functional exterior and the personal core of the ISP’s employees.

employee (1)

Because of this, there will be commensurately very little requirement for management to make purely functional demands on the self-motivated ISP staff. Instead, they will enjoy a “warm” relationship with their employees, who will nevertheless”get the job done”.


However, in the second scenario, there is a large gap between the disinterested employees’ personal involvement in their work and the results they have to accomplish.

employee (2)

In this case, management will have to adopt a functional communication style when interacting with employees. The relationship will be “cold” and factual.

ISP 4.png

Therefore it seems that the success of the informal company is directly proportional to the degree of personal interest that employees have in their own work.

The reason Google used to allow employees 20% of their time to develop their own projects, is not necessarily because this was the most efficient way to invent new products, but because Google knew this was the best way to enthuse employees generally about their work.


Every company in every industry, probably has to seek a different path to allowing employees to personally identify with their work and be excited about the difference they can make every day, however.

Knowledge momentum

There is a fundamental difference between the knowledge that a car is about to run you over and the knowledge that a triangle contains 180 degrees.

The knowledge that a car is about to run you over is not verbally expressed in your thoughts. That is, if you look up while crossing the road and you see a car in a collision course with you, it is highly improbable that the following thoughts will go through your mind: “It would appear to me that given my direction of travel and that car’s direction of travel, and considering our respective velocities, it is probable that the car and myself will collide in 3.2 seconds which would result in severe injury.” Instead, it is more likely that you will jump out of the way without thinking about your high-school applied maths.

This type of knowledge is often referred to as Knowledge by Acquaintance

We shall say that we have acquaintance with anything of which we are directly aware, without the intermediary of any process of inference or any knowledge of truths.

On the other hand, if you are performing an experiment to see if triangles really do contain 180 degrees, it is likely that you will verbally think through your conclusions, “It would appear that this triangle contains less than 180 degrees,” before transcribing the results.

This type of knowledge is referred to as Knowledge by Description

To know some thing or object by a definite description is to know that it is the so-and-so or that the so-and-so exists.

The reason for this difference is that being run over by a car is a natural (if unwanted) part of your everyday life, but the different flavours of geometry predicted by the Big Bang theory are not. Because the desire not to be run over is something that you experience personally, there is no need for you to mentally verbalise aspects of the situation that presents this danger in order for you to determine the actions you need to take to avert an undesirable outcome.

On the other hand, the predictions of the Big Bang theory on whether the universe will expand indefinitely or will ultimately collapse and the ways that we can determine the type of universe that we live in are not part of your natural everyday life. Therefore in order to process the facts and figures that relate to this aspect of reality you have to mentally ascribe words to the elements of this sphere of thought and to the interactions between these elements, in order to cogitate about the subject matter.

Different approaches to the same body of knowledge

It is not always obvious what knowledge you have assimilated as Knowledge by Acquaintance so that the knowledge becomes a natural part of your life and is integrated into your natural perception of the world, and what knowledge you have kept at an arm’s length internally, so that the knowledge is merely appended to your internal Knowledge by Description information-store.

For example, a watchmaker who has spent their entire life perfecting their knowledge of watches is likely to have absorbed the knowledge of watch mechanics into their personal Knowledge by Acquaintance perception. The watchmaker will not have to mentally verbalise which cog should mesh with another and will be able to intuitively diagnose why a watch is not working.


On the other hand, an accountant analysing their client’s balance sheet for anomalies is likely perceive the numbers before them as Knowledge by Description in order to verbally cogitate on the problem.


Furthermore, it is possible that two people could perform exactly the same job after acquiring exactly the same body of knowledge, but one will allocate the requisite body of knowledge to their personal Knowledge by Acquaintance perceptions and the other will allocate the same knowledge to their “impersonal facts-and-figures” Knowledge by Description information store.

A microprocessor architect who is in love with the x86 microprocessor architecture will ascribe the same quality of feeling to their knowledge that the 8086 architecture is beautiful and their knowledge that a vivid sunset is beautiful. Subsequently, just as watching a nice sunset is a natural part of their everyday life, so too developing x86 microprocessors will be a natural part of their everyday life.

This may contrast starkly with another microprocessor engineer who may have very firm opinions about not letting their professional work become intertwined with their personal life and makes sure that their professional knowledge remains exactly that.


Another personal aspect of knowledge acquisition in which people differ is the degree to which they make promises to themselves that their acquisition of a certain body of knowledge will further their progress in life.

This means that because the effort required to acquire knowledge or skills may not be intrinsically enjoyable, you may promise yourself during the course of the acquisition of this knowledge that in the future, through application of your newfound knowledge, you will more than compensate yourself for the self-sacrifice involved in study through the gains that you will make by application of your knowledge and skill set.

For example, a doctor who studies for 10 years to qualify will promise themselves, during the course of their studies, that the career opportunities and lifestyle afforded by their professional qualifications will be just recompense for the hard slog of qualification.

Because of the need to fulfill this self-promise after they qualify, the doctor will be driven to apply their knowledge in a profitable manner so that their societal status and remuneration will compensate them for the hardship endured while studying and training.

Life trajectory

We can therefore identify at least two factors which will influence the degree to which acquisition of knowledge will later cause your life to proceed inexorably in a particular direction.

  • Knowledge by Acquaintance: If you have acquired professional knowledge in a way that it becomes part of your natural understanding of life, then you will see this area of knowledge as a permanent and ongoing part of your everyday life.
  • Self promise: If during the course of knowledge acquisition you promised yourself that your later gains through application of this knowledge would compensate you for the duress endured studying, then after qualifying you will feel internally compelled to “get your money’s worth” from the body of knowledge through professionally leveraging this knowledge to your advantage and progressing your career.

These two factors can combine to determine the degree to which your future life will be molded by your acquisition of a body of knowledge.

knowledge - life influence 2

Knowledge momentum

The operational momentum of a company is only equivalent to the sum of the personal momentum of its employees.

In times of stability it is healthy for a company’s employees to be as committed as possible to their current job knowledge. If staff identify personally with their job-related knowledge and are motivated to further their careers through the application of and the development of their hard-won knowledge, this will make for highly motivated staff who will bring the company success and advancement in its current line of business.

However, when external circumstances change and corresponding company change is required, it is beneficial to have staff who can change job-direction easily. That is, it will be beneficial to have staff who have not made their current job knowledge into a natural part of their lives and who have also not promised themselves that this same body of knowledge will take care of them forever.

Is there any way to bridge the gap between high knowledge momentum, which is beneficial in stable market conditions, and low knowledge momentum, which is beneficial in times of change?




Corporate mind-space

According to a popularly quoted article printed in the The New York Times Magazine

The Social Responsibility of Business is to Increase its Profits

This may seem like a sensible statement from the vantage of the company’s investors, however thinking this all day long would probably be a depressing proposition for the company’s employees. In fact it is likely that internalising this corporate raison d’être would very quickly lead to the motivational collapse of even the most hardened company woman or man.

Subsequently people have the need to believe in a higher purpose in their daily tasks other than financially rewarding the company’s shareholders.

In response to this existential need, companies deliberately or unwittingly create an internal mind-space which incorporates all of the abilities and the motivational drives that its staff must possess and feel in order to progress the company’s success.

Within this corporate mind-space

  • The staff must believe that what they are doing is fundamentally “good”. That is, they must believe that they are involved in something of intrinsic worth and of fundamental value.


  • The staff must believe that what they are doing is “important”. That is, they must believe that they are involved in doing something which if not done will have a deleterious effect.

Once company staff believe that what they are doing is both “good” and also “important” they can become passionate about their work. If a “good” result is achieved this may bring them happiness so that they will strive towards this outcome. If a negative event transpires they may take this to heart and anxiously work to prevent such an occurrence.

Activity Value Importance
Mining coal Power factories and trains If not done, factories will lose power and trains will be unable to run
Providing drinking water The townspeople will have drinking water If not done, the townspeople will go thirsty
Securing a website against cyber-attacks Customers will have an enjoyable online shopping experience If not done, customers will not be able to shop online


Dichotomy and leadership

We are therefore confronted with a dichotomy between the purpose of the company as viewed by its shareholders (which is to increase profits), and the purpose of the company as it professes to its employees (which is to improve society).

In other words, we encounter a contradiction between the external face of the corporation, whose purpose is to offer goods and / or services in the most lucrative manner possible, and the internal “let’s pretend we don’t get paid for working here and are here for the universal good” feeling that must pervade the office space in order to motivate the company’s staff and coalesce them into a working unit.

Furthermore, because every company exists in the external commercial world and also contains its own internal world of personal endeavour, there must be at least one person or possibly a group of people within the company who are able to view everything within the company from both perspectives. Without this ability it would be impossible to translate external commercial pressures into direction within the company’s internal life. Conversely, it would be impossible to align the internal staff motive with the external commercial reality.

Formally the CEO is tasked with the ability to simultaneously maintain this dual paradigm and juggle both viewpoints in their mind, whereby to find the sweet-spot that maximises  the interaction between external commercial pressure and personal striving within the company. In reality however, the CEO may be part of a group of people who jointly translate the different functional areas of the business between the external and the internal paradigms. The CEO will have the “speaking part” within this group, however.

(The further staff are from the upper echelons of management the less they need be aware of the external commercial reality that the company faces. Successive layers of management may be tasked with the gradual transformation of external pressures into internal emotional drivers.)

Hence it would seem that

  • The fate of the entire corporate balance-sheet is in the hands of the individual or group that translates the real-world “commercial speak” into the internal company motivational parlance.
  •  Any misalignment of these contradictory but interdependent viewpoints will spell disaster for the company’s investors or for the morale of the company staff.

Is it reasonable to expect that senior management can maintain this razor-edge balance indefinitely, especially when the technological, socio-demographic and market environment in which companies operate today can change so rapidly?