Comments on: Management by Baseball

By: David G

David G — Fri, 12 May 2006 02:05:34 +0000

I agree that you cannot have beuraucracy without scale (unfortunately) … but … you cannot have (maximum) productivity without it either. My thesis is that a lot more is achieved by maximizing productivity than eradicating beuraucracy (though both are important). Knowledge management is actually a discipline where productivity greatly improves with the size of the knowledge user base.

In the limit, the most productive worker is the one that perfects one task and then repeats it all day every day. Not fun, but productive. That kind of workload only comes with scale. A “busy” sole proprieter is not necessarily productive. The smaller the company, the more “busy” each individual NEEDS to be because resources are scarce – but that doesn’t mean they’re financially productive. If I have vast resources at my disposal, I can get a lot done with relatively little “work” – so maybe I can goof off at the proverbial watercooler for the rest of the day.

I don’t think goog is small. At 5680 employees, my guess is that they are world’s largest advertising agency – look how productive, flexible and responsive they are.

Note – I think a distinction needs to be made between scaling vertically and scaling horizontally. Vertical scale (i.e. growth) is efficient – horizontal scale is not. Where I think we agree is that GOOG cannot enter a new business as productively as a startup that’s got no “process” baggage. It’s a conclusive argument that web portals are doomed in all but their core (original) business.

By: Rob

Rob — Thu, 11 May 2006 22:01:36 +0000

David,
That is a good point, as I don’t know how much I would get from “Management by Cricket.” But I think the diseconomies thing is a real issue. Knowledge sharing once you get beyond a few hundred employees becomes an immense challenge. This can lead to inefficiencies through duplication of effort, time spent spent searching for information and lost productivity due to increased bureaucracy, gossip, and office politics. The latter ones are may be minimized given the right corporate culture, but even good organizations have a difficult time sharing knowledge. Don’t you agree that Google’s speed has been one of the reasons it has competed so successfully against larger players? And if so, didn’t their smaller size contribute to their speedy development and decision making? It will be very interesting to see what happens as they grow.

By: David G

David G — Thu, 11 May 2006 17:07:59 +0000

Caveat – the metaphor is useless to international (e.g. cricket-playing) readers like myself and much of the fairer sex.

From my perspective, the last thing we need is more sporting metaphors in the workplace – they are way, way overused in the US workplace. What the execs who use them fail to recognize is that by using sports lingo in business conversations, they exclude many immigrants, international business partners & female colleagues. It’s always surprised me that the US workplace with its hyper-sensitivity to discrimination accepts this common prep-boy-practice. I’ve often heard woman in particular complain about this problem.

I must also challenge the writers (lack of) understanding of economies of scale – the “diseconomies” are what I like to call “the problems we hope to have”. By definition, COGS increase when a business scales – some of those are “new” COGS – but also by definition, COGS grow at a rate slower than earnings; that can never be a bad thing no matter what new (minor) inefficiencies the business has to learn to cope with.