Can “Agile” break the Iron Triangle? Can open allocation?

I’ve written a lot about the MacLeod-Gervais-Rao model of the corporate organization, which I’ve dissected at length starting here. This exploration is going to start with many of the same ideas, refined by time.

In the MacLeod model, people in a company are either sorted or self-select in to three tiers, each uncharitably named. The “Losers” at the bottom of the corporation do the grunt work; the “Sociopaths”, typically at the top or on the way up, tell people what to do and take most of the rewards; and the “Clueless” get caught in the middle, working overtime to correct the mistakes of disengaged people below them and the unapologetically self-advancing people above them.

It’s a sound model. It accurately describes many corporations. To be fair, the names are a bit negative, and possibly inaccurate. “Losers” aren’t disliked or contemptible people, but only economic losers who trade their time for a pittance, in exchange for low work demands, low or nonexistent income volatility, and infrequent changes in their job duties and geographic location. They’re selling off their risk because they prefer comfort over upside. “Sociopaths” are the risk-seekers who aren’t afraid to break rules. Organizations need such people in order to survive, but they don’t need many, due to the pyramidal shape of a corporate hierarchy. One rule-breaking maverick is an asset; ten is a problem. Those get rapidly promoted or fired, with not much middle ground. The “Clueless” in the middle are the “true believers” who think (in spite of all objective evidence) that their organizations are meritocracies. Sociopaths (even the good ones) aren’t afraid to cut deals and play politics and grease palms, but Clueless tend to believe that all problems can be solved by “working harder”. Their unconditional work ethic (as opposed to the conditional one of the Sociopath) makes them a natural match for unpleasant tasks and dead-end jobs.

Model vs. reality

Is this depiction of corporate life accurate? Can there be “Losers” in high positions and “Sociopaths” at the bottom? Of course, there are. It’s just rare that it happens, because organizations work against it. Moreover, these traits are hardly immutable. A person might be a “Clueless” in one context and a “Sociopath” in another. The MacLeod model is a generalization and an attractor state. What it describes best are the organizations that have lost most of their purpose for existing, or that never had a vision beyond self-enrichment of a few. (That’s most organizations, at least in the corporate world.) At such a point, self-interest is the dominating motivation of most players, and the idea that there’s a higher mission is just a narrative for the Clueless. Since not everyone can be a leader or be made rich, organizations adapt by evolving toward this state of affairs, which is highly stable. I’ll get to its specific flaws, and its relationship to software methodologies like “Agile” and open allocation, later on. Before doing that, it’s most useful to discuss why this tripartite sorting of people occurs.

The Iron Triangle

Organizations tend to want three things from people:

  • subordinacy (S), which pertains to “Does this person value the organization’s interest above her own?”
  • dedication (D), or “Will she work as hard as she can?”
  • strategy (T), or “Does she work on the right things?”

The most nuanced of these is the first, subordinacy. Of the three Iron Triangle traits, it’s the one that I tend to least value, but in order to discuss it properly, we have to discuss what it is.

I don’t champion the constitutionally insubordinate. In truth, I don’t have much use for such people, the ones who oppose authority simply because it is authority. Sometimes, subordinating is the right thing to do. For example, stopping and waiting at a red light is an act of subordination where the alternative, almost always, is reckless. It’s illegal, and for good reasons, to run red lights. Moreover, while I don’t value one-sided loyalty (i.e. loyalty to a group or organization that will not return it) I do value integrity. Plenty of actions that are insubordinate are also dishonest, toxic, and wrong. All of this is to say that the question of when (in)subordination is a virtue vs. vice is a deep and complicated one. At least for now, I prefer to step away from the larger moral questions and focus on the (typically, morally neutral) matter of an organization’s upkeep.

While subordination and insubordination are matters of action, subordinacy (S+) is one of attitude and personal strategy. (Unfortunately, the adjectival forms of both words, “subordinacy” and “subordination”, seem to be the same word: “subordinate”.) When an act of insubordination is ethically neutral, will the person do it? Will he use his organization’s reputation, without prior permission, to bolster his own? Will he focus most on the tasks that further his career, rather than those that are most important to the organization? Will he assist a third party in negotiation with the organization, in order to have a friend (or, at least, an ally or a favor owed) in the future? These are questions where insubordinacy is ethically neutral. It’s not the noble insubordination of the Civil Rights activists; nor is it the unethical, degenerate sort; it’s the neutral insubordinacy of a careerist who’s figured the game out. The person with subordinacy (S+) will err on the side of favoring the organization, preferring stability over the opportunity for personal gain. The person without subordinacy (S-) tends to favor the interests of people (including himself) for multiple reasons. The charitable view is that the insubordinate favor individuals over organizations because individuals are more likely to have coherent vision and the strategic insight necessary to move society forward. The less favorable view is that they favor individuals because people have a memory, and organizations don’t. If you tell a talented young engineer, while your company is courting him, that he could get $20,000 more just by asking for it, there’s a chance that, five years down the road, he’ll pull you in to his startup as a co-founder. If you favor the organization by not sharing this information, you’ll get nothing in return. In truth, as an S-, I think that both of these views are correct. We favor individual advancement (of ourselves, and of others whom we care about) over organizational upkeep because individuals are more coherent and strategically competent, but also because we won’t waste loyalty on bureaucracies that would never return the favor.

Without further exploring the rabbit hole of subordinacy, let’s return to a question that I’m sure many readers have asked. Why is this set of three traits (subordinacy, dedication, and strategy) called an Iron Triangle? The answer is that an organization gets at most two from each person. To see why that is, it’s useful to examine the eight combinations formed by the absence or presence of each trait. People with zero or one of the Iron Triangle traits tend to be organizationally inert, so I won’t focus on them. At 2 out of 3, we get the MacLeod archetypes. The strategic and dedicated, but not subordinate (or, S-D+T+) become the high-energy creative (or, in some cases, destructive) employees (Sociopaths) who’ll either be promoted quickly or fired. Their more risk-averse counterparts, on the other hand, will select subordinacy over dedication. They have a good sense of what projects are worth working on and how hard to work (or, conversely, how lazy they can be and get away with it) but, if assigned to doomed projects, they’d rather stay in place and slack than put themselves at personal risk by trying to right the ship. Those people, being subordinate and strategic but not dedicated (S+D-T+) become the MacLeod Losers. They might know how to improve things, but they know that there’s more job security in following orders. Finally, those with the unconditional work ethic, the subordinate and dedicated but not strategic (S+D+T-) tend to end up doing the jobs that no one wants. This can advance them into middle management, but they’ll rarely get a decision-making role. They tend to get the responsibility-without-power kind of “management” that is avoided by Losers (it’s too much work) and Sociopaths (it’s a dead-end job) alike. Those are the MacLeod Clueless.

Why is it rare, if not impossible, that an organization gets all three Iron Triangle traits from one individual? It’s a paradoxical arrangement. A person who is strategic will generally not be subordinate and dedicated. Subordinacy means that a person gives up opportunities for personal advancement in order to avoid conflict and appearances of impropriety, and in the interest of organizational harmony and upkeep. Dedication means that a person works much harder, and takes on more of the nasty tasks, than is needed to maintain employment and social acceptability. It’s not strategic to be both. You can earn your place with one or the other, and if you play both games you’re more likely to make mistakes, because they conflict. If you want to maximize comfort and minimize risk and pain, you prefer subordinacy. You become “a nice guy”, and promotions come slowly, if at all. That’s the MacLeod Loser route. If you want to maximize personal yield and advancement, or some higher moral objective (e.g. social justice) that might require fighting the organization, and you don’t mind pain and risk (even the risk of being expelled or fired from the organization) then you favor dedication. You become a MacLeod “Sociopath”. You shake things up, aren’t afraid to make enemies or have others question your judgment (and, even, integrity) and you work hard not because you have a (MacLeod Clueless) desire to clean up others’ messes, but because you want to prove yourself right about something. You’ll either be promoted, fired, or find external promotion inside of a couple years.

Simply put, to be subordinate and dedicated is not strategic, since there is no value in taking on two kinds of self-sacrifice when only one will suffice.

For an aside, the stereotype of the non-strategic, terminal middle manager is that he’s a milquetoast with no vision. That type of person certainly exists, but a pattern that is at least as common (and dangerous) is the non-strategic person with too many visions. He overcommits, tries to please everyone (subordinacy) and works really hard (dedication) on an array of stuff that never amounts to a coherent whole. He has “vision” but there is no coherence to it. He can’t focus. If a person is subordinate and dedicated, that person is trying to play two conflicting strategies (for an example of conflict, a person who works too hard will lose social polish and tarnish any “nice guy” gains earned in subordinacy) simultaneously and that is not strategic.

An archetype of a person who seems to have all three traits would be the Protégé. Is that a possible fourth MacLeod category? (Answer: I’d say no.) A person whose career is protected by someone powerful or influential will show all three Iron Triangle traits. The “to be subordinate and dedicated is not strategic” theorem seems broken, in that case. Is it? I would argue that it’s not. This is a case of conditional subordinacy. The protégé has a genuine personal interest in doing right by the mentor, and in keeping long-term, loyalty-based relationships (which do not exist, these days, with corporations) intact. I would argue that, while the protégé will subordinate, it isn’t subordinacy because there is a harmony of interests, and it’s conditional upon the loyalty going both ways. If the upper management’s buy-in to the protégé’s career wanes, he’ll either start to slack (MacLeod Loser) or seek his own interests (MacLeod Sociopath).

What’s wrong with the Iron Triangle?

Is the Iron Triangle a problem? After all, so long as organizations can get each of those desired traits from someone, is it a real loss that no individual will deliver all three? It’s not clear that the Iron Triangle poses a real threat to the organization; in fact, the MacLeod arrangement is highly stable. Moreover, people and organizations adapt somewhat fluidly. A strategic person can consciously choose to favor subordinacy or dedication over the other. A non-strategic person might become strategic with age and experience. No one’s a lifelong MacLeod Loser or Clueless or Sociopath; we evolve as our needs (and the needs of those around us) demand. MacLeod organizations are “iron” because they’re stable on their own terms, like white dwarfs left when a star’s best life is behind it.

So what’s wrong? Why is the MacLeod organization considered to be dysfunctional? Why do, for example, technology companies continually come out with new employee perks and development methodologies in order to create the perception that they’re not MacLeod organizations? Why have the cynical executives in technology removed themselves from official managerial roles and become “investors” at venture capital firms? Why is it desirable that a company move itself away from a MacLeod model, which seems to give most people what they want?

The MacLeod organization’s problem is that its short-term stability hides a long-term trend toward obsolescence. Each of these three archetypes has a fatal flaw. In assessing the fatal flaws of each, we’ll get an understanding of why some technology companies insist on methodologies like “Scrum”, and also on whether a different approach, like open allocation, can solve the Iron Triangle problem.

The flaw of the MacLeod Sociopaths, whom I give the more charitable name of Self-Executive, is that they’re a high-variance set of people. If you want reliable mediocrity, you won’t get it from them. In fact, expecting reliable mediocrity will alienate them. The name of “Sociopath” comes from the fact that some (and, typically, a disproportionate share of those who attain power) are unethical. I don’t actually think that Self-Executive employees are any more (or less) unethical than any other group, but when they are cheaters and liars, they do a lot of damage. The main issue that that set of people has, relative to organizations, is numerical. Organizations don’t need many creative, passionate, decision-making people. In the pyramid-shaped corporation, there are more people with the Self-Executive inclination (probably, about 10% of the population) than there are roles with executive (with “executive”, here, including non-managerial technical or creative leadership) work. Thus, some will be promoted and others will be fired. The stakes are high, so you get in-fighting, politicking, and sometimes even cheating by some highly creative people who aren’t used to being told “No”.

Integrity, in terms of which Self-Executives (or “Sociopaths”) are promoted vs. fired, actually matters. A MacLeod Loser with low integrity might steal office supplies, but a MacLeod Sociopath with low integrity can kill the company. So promoting the “good Sociopaths” (the paradoxical nature of this term is one reason why I prefer Self-Executive) and firing the bad ones is important. Unfortunately, the bad kind tend to be a lot better at office politics.

As for the MacLeod Clueless, whom I’ve renamed to Workhorses, their flaw is that they tend to generate recurring commitments: meetings and processes and rules and additional tasks that seem like good ideas individually but, en masse, make the company incoherent and slow. With that unconditional work ethic, they’re willing to throw their weight behind whatever efforts their superiors consider important. Left to their own devices, they’ll come up with something that will usually provoke a “Huh?” reaction. In the lower ranks, their work ethic endears them to their bosses and they can get promoted, but eventually, that stops. Workhorses never get themselves respected enough to be given high-end work, and their willingness to complete low-end and unimportant work means they get used as garbage disposals by the organization. This isn’t a problem, until they get promoted too high and the Peter Principle kicks in. The issue isn’t just that they generate bad ideas, because everyone who has ideas comes up with some bad ones. (Self-Executives also come up with bad ideas, and quickly abandon them.) It’s that they never flush away bad ideas, so they have a tendency to create the recurring commitments that accumulate and slow down the entire organization. The MacLeod Losers lack the initiative to generate this crap, and Sociopaths avoid it because recurring commitments are career-draining, dead-end pits of suck. It’s the well-meaning incompetents who build such messes up. Eventually, the corporation reaches a level of stagnation at which Sociopaths called “management consultants” are brought in to garbage-collect those recurring commitments.

What’s wrong with the MacLeod Losers? (I would rename them Team-Players.) It seems like a Team-Player should be a model employee. He won’t disobey a direct order. He won’t generate fruitless work. His main flaw is the lack of dedication. He wants to get along with others, not be the hardest-working. If you tell him that his work hours are 9 to 5, he’ll be out the door around 5:10. But what’s wrong with that? MacLeod Losers are actually pretty efficient and productive. That’s part of their being strategic. Efficiently doing what little work they’re directly told to do gives them more time to surf the web, play with Nerf guns, or jockey for a “cool” in-group status that, while it doesn’t correlate to the kinds of status (such as salary and title) that actually matter, gives them a sense of comfort and importance (“I’m the Halloween Party Guy”). Team-Players work efficiently and, while they lack initiative, they’re far from being slackers, since their goal is to maximize comfort. True minimum-effort playing (that is, doing just enough work not to get fired) is actually pretty uncomfortable. You’re just on the bubble, people don’t like you, and every time your manager or expectations change, you have to watch your back. So they don’t go down that far, in effort level. They modulate their work output to the Socially Accepted Mediocre Effort (SAME).

Companies tend to form effort bands based on peoples’ level of work. The negatively productive are in the FUGLY (“Fail Up or Get Lost Yesterday”) band; they’re either already on PIPs, or they have personal connections that’ll lift them no matter what they do. Next is MEME (“Minimum Exertion to Maintain Employment”) and then SAME (“Socially Acceptable Mediocre Effort”) and AWT (“Actually Works There”) followed by HSTG (“Holy Shit, This Guy/Gal”), the last of these being the overperforming level at which a person becomes more likely to be fired (because there are more opportunities for political failure or social embarrassment). In most organizations, the MEME is about 3 hours per week of actual work and SAME is around 10 to 15. The Workhorses/Clueless tend toward AWT and HSTG, and the Self-Executives/Sociopaths will play the full spectrum depending on what they are trying to do. But the Team-Players/Losers are optimizing for comfort. They want to be well-liked and not have their job duties change, and to keep management off their backs. Their avoidance of recurring commitments, over-exertion, and embarrassment to others keeps them out of the AWT/HSTG range, but their desire to be well-liked keeps them out of FUGLY/MEME territory. So they aim for the SAME. And what’s wrong with that? The problem is SAME Drift. The SAME starts out at an acceptable level, at which the company makes more off the Losers’ work than it pays them; but over time, the SAME tends to approach (and can reach) zero as the workload fluctuates. When the workload decreases, MacLeod Losers/Team-Players (being strategic) drop their output, because creating non-essential work for themselves is just a waste. When it increases, those who are willing to take additional work for self-advancement become MacLeod Sociopaths/Self-Executives, leaving the Loser tier (and the SAME) behind. Better incentives will bring people out of the Loser tier and therefore reduce the number of underperformers and their bulk effect, but it will generally not improve the SAME. That matters, because in any organization, most people will be exactly at the SAME.

Culture! (and, uh, firing people)

After all of this, we get to emergent social behavior and game theory, and when humans are involved, we tend to call it culture.

The MacLeod tiers are most pronounced in the lawful-evil rank culture that values subordinacy over the other two Iron Triangle traits. Rank culture is self-consistent and internally stable, because it gives everyone what they want (comfort to Losers/Team-players, mission to Clueless/Workhorses, self-advancement to Sociopaths/Self-Executives). Still, the organization declines over time, due to SAME Drift. If the SAME drops too far, the company will be weighed down by cynical underperformers. By that point, it usually has underperforming and incompetent managers (who protect the incapable below them) as well, and that goes many levels up the chain. It’s ugly, and the most common thing that seems to shock a company out of a low-SAME funk is a serious layoff or restructuring. (In the workplace, promotions and firings are the most important aspects of “the culture”. The rest is distraction.)

Strategically, layoffs are hard to get right. A big layoff provides a shock (that can be desirable or not) but the company can recover, if there’s a well-communicated strategic reason for the change. A series of small layoffs destroys morale; people realize that their jobs are tentative and stop caring. It’s always better to do one big one, but this requires (for the executives deciding whom to lay off) compiling a large amount of knowledge without tipping anyone off to what’s about to happen. The biggest problem with layoffs, as practiced, is that the proper way to do them is to cut complexity as well as people. If you cut people but try to perform all the same operations, you’re just going to burn out an already-shaken team. However, companies usually don’t want to cut complexity because, for every inefficient process or unnecessary recurring commitment they have, there’s usually someone who likes it being there. Also, cutting complexity often means that good people (whose work areas happen to be in unprofitable departments) are let go, and no one likes that. The intended strategy often becomes, instead, to cut people first, in one efficient hack, then move them around in a way that cuts complexity. (The latter part rarely happens, leaving a skeleton crew to do just as much work as the larger set did.) This is cut-then-shuffle is only remotely feasible if the lowest-performing people are the ones let go. However, it’s pretty much impossible, from the top, to identify low performers. Can a company reliably figure out who its low performers are without political corruption? No, not really. But it can generate a bunch of meaningless numbers (or a ranked ordering) and trick itself into believing in them.

This is where “stack ranking” (or “top grading”), originated by Jack Welch, beloved by McKinsey, and now used at most technology companies, comes into play. Stack ranking is a recurring layoff, dishonestly packaged as being performance-based. Microsoft used to give 7% of employees the dreaded “5” rating, and Google’s “2.8/2.9″ (given to 3-5 percent, depending on economic circumstances) had the same effect, but there are many more examples of this. In some regimes, the same percentage on each team gets nicked. More often, it’s based on the macroscopic performance of each division, department and team. This leads to the Welch Effect: in a discretionary termination (i.e. not one forced by business events, such as a plant closing) the people most likely to be let go are junior members of underperforming teams. This is suboptimal because those are usually the people least responsible for that team’s underperformance. I can make 20 different arguments, each in 20 different ways, but the point is that stack-ranking doesn’t actually get rid of low performers. It gets rid of people pretty randomly, pisses a lot of people off, and eventually leads to a rash of political behavior. It certainly doesn’t do the proper job of a layoff, which is to reduce complexity. (It increases complexity, because of all the political behavior and improper favor-trading that goes on.) It does achieve one thing: it shatters the SAME. The MacLeod Losers are shocked either into working harder (Clueless) or getting better at politics (Sociopaths). That sense of equilibrium is gone.

The above is something management consultants love to do, because it creates toxic (and, from above, probably humorous) drama in a company where they don’t have to work. The MacLeod rank culture, in which following orders is enough to keep a person in place, disappears. It’s replaced by the chaotic-evil tough culture (named after Jeffrey Skilling’s proud admission, “we have a tough culture at Enron”). While the rank culture valued subordinacy over the other Iron Triangle traits, the tough culture values dedication. Managers aren’t fully trusted: some percentage of them is usually also thrown out each year, as well. It doesn’t matter much what you’re doing; you just need a reputation for being a hard worker and not a “piker”. Hours get long: 10- and 12-hour days become the norm. Busywork is tolerated because the deluge of unimportant but time-consuming tasks “weeds out the weak”. When someone seems to favor family or outside hobbies over the job, and stops working long hours, the knives come out, even if that person’s more productive and efficient than anyone else.

Typically, a company will vacillate between the lawful-evil rank and chaotic-evil tough cultures. Rank culture is the internally stable but slowly-declining arrangement. When its failings attract executive or shareholder attention, it moves toward a tough culture. Over time, as some people (the new MacLeod Losers) get tired of working so hard, and others (the new MacLeod Sociopaths) figure the new system out, and they realize there is personal benefit in giving protection against it, the organization slides back into a rank culture. The ones who can win control over the harsh, high-stakes performance appraisal of the tough culture (presented as an impartial meritocracy, but as prone to manipulation as a rank culture’s system) will typically be the new holders of rank within a couple of years.

Those two cultures are the ugly cultures I’ve called “evil” because they’re unpleasant to work in, inefficient, and generally deprive shareholders (of a performant organization) as well as non-executive employees (of a decent work-life and of career support). There are two good cultures. The chaotic good culture is the self-executive culture, which favors strategy over the other two Iron Triangle traits. I’ll get back to that. The lawful good culture is the guild culture, which favors a balance in the three Iron Triangle traits. Remember how I said that there was no way a person could have all three traits? Well, I lied, sort-of. I mentioned the protégé concept in order to discuss exactly this. In the idealized guild, all of the new entrants are protégés, and a balance of the three Iron Triangle traits (subordinacy being conditioned on the promise of a great career in the future) is possible. Rather than a pyramid, the shape of the professional structure is an obelisk. The grandmasters and masters tutor the journeymen and apprentices. You don’t have “Sociopaths” and “Losers”; you just have the experienced lifting up the neophytes. Because most or all of the apprentices and journeymen will be promoted, they don’t need to play against the organization in order to have careers, as they would in a pyramidal structure. It’s a nice idea, and it actually works. The problem is that it typically can’t grow very fast. The guild culture is brittle against rapid expansion or contraction, and seems not handle change or chaos very well in general. It also devolves into mean-spirited behavior (see: “big law” and academia) when the guild system’s no longer supported by economic conditions, and when the lack of prospects for the up-and-coming leads to generational conflict. Then, it devolves into a tough culture due to internal scarcity, followed by a rank culture. I don’t think we’re going to see new guild cultures in the 21st century. In fact, we might see some more of the existing ones fall apart.

We’re left with one culture that might work: the self-executive culture. Valve’s open allocation is an example of this. Not only does it encourage (rather than punishing) self-executive behavior, but it seems to mandate it. Just taking orders isn’t a viable career strategy, because it’s not clear who has the authority to give orders. People can’t use “landed on a bad project” to justify mediocrity, because they picked their projects. I’ve written a ton about this already. It really is the only non-imbecilic way to build a software company.

Breaking the Iron Triangle?

We’re now ready to discuss software methodologies.

“Agile” is an attempt to break the “waterfall model“. While there isn’t a guaranteed equivalence, “waterfall” often accompanies a rank culture, because in a rank culture the decisions are made from on high and flow downhill, rarely being opposed or questioned. How do people develop software in a rank culture? By following orders. A few higher-ups make the important decisions, and the halfway-checked-out MacLeod Losers implement. The result is low-quality software and sluggish response to change. In many industries, the creative ossification that follows a rank culture will take decades to slow it down to an unacceptable level. In software, that happens much faster, because programmers tend either to be engaged or useless. So this tendency of rank cultures toward underperformance is more of an emergency. The wrecking ball that is often used to crack a rank culture is often given the name of “Agile”.

There’s good and bad in Agile, whose stated purpose is to remove the impediments and communication breakdowns that rank-culture/”waterfall” development creates (and that become excuses for slacking). Scrum, to take an example, actually forces the “product owner” to prioritize tasks, which does increase coherency. My problem with “Agile” is that it doesn’t go far enough. Typically, it’s still business-driven engineering, which means that the major problem (the passengers flying the plane) hasn’t been fixed. Saying, “We should still do business-driven programming, but let’s launch something every 2 weeks” is like saying “I want to get shot in the head, but by a buxom blonde who wears an eye patch.” Personally, I’d rather just not get shot in the head. If you’re doing business-driven engineering, then Scrum is very likely to be an improvement; but the most talented programmers would much rather work in an engineer-driven firm.

“Engineer-driven” doesn’t necessarily mean open allocation. Google is engineer-driven (and that explains much of its success) but uses closed allocation. It’s a step in the right direction, but not (I would argue) enough. Now, I’ll admit that it’s quite possible that many “Agile” methodologies are compatible with (a) engineer-driven development and even (b) open allocation. I just haven’t seen it play out that way. When “story points” and “iteration planning” and all that other heavyweight stuff comes out, it just becomes a new structure for routing tickets (generated by the business) to engineers who are presumed to be interchangeable. If there are malefactors in view of this, it can also be abused for performance appraisal and professional extortion. They will become the new holders of rank.

Well-intended engineers and middle managers often like Agile because it shakes up the “waterfall” model of the rank culture. At least in theory, the team “comes together” (in a military’s sense of the word) and becomes a primary driver, increasing (at least) the autonomy (self-executivity?) of the group. The problem is that malefactors (true sociopaths) also like it. They can use Agile’s machinery to create a new tough culture. That’s bad for everyone, because tough cultures settle into worse rank cultures than those they emerged out of. Of the four workplace cultures, tough cultures are the most dysfunctional, because the political behavior they incentivize creates complexity (often long-lasting) while the organization is losing (firing) people. Rank cultures generate slacking and ambivalent zombie-shuffling, but tough cultures encourage land-mine-setting and in-fighting.

I would not go so far as to say that “Agile” methodologies will create a tough culture. At least, relative to the sclerotic dysfunction that inexorably follows from business-driven engineering, there are good ideas in the “Agile” movement. My argument is that they can be used to that end. That doesn’t make Scrum and Kanban and XP necessarily bad, but I would call them dangerous. As soon as fucking “story points” pop up in a performance review, get rid of them or your organization will soon die.


What makes the self-executive culture so much better than the others? After all, might its rarity suggest that it’s not sustainable? Well, I don’t know enough to vouch for open allocation outside of software. I’m obviously not an authority on how to run hospitals or overseas ink factories. I’ll stick to what I know, and that’s software engineering. Software is convex work, meaning that the difference between nonperformance and mediocrity is smaller than that between mediocrity and excellence (“10x” performance). Not all work is like that. For many tasks, mediocrity is just fine and excellence is not much better, but nonperformance is catastrophic. That’s called concave work, because the input-output curve is concave down.

Concave work is easier to manage. Why? Because a manager wants to (a) maximize average return, but (b) is subject to limits on risk. With concave work, the region of lowest risk (lowest first derivative) is at the high-performance plateau. Thus, removing risks will enhance performance. With convex work, the opposite is true. The low-risk plateau is at zero. High performance and risk are, in that case, positively correlated. You want people to take as much creative risk as they can afford. You often need it if you want to remain competitive.

In a self-executive workplace, where people are trusted (and, indeed, required) to manage their own direction in the company, is the Iron Triangle broken? Well, let’s look at each of the three Iron Triangle traits. Self-executive cultures excel at strategy because they distribute that responsibility (for deciding what is worth working on) to all workers, rather than relegating important decisions to a sheltered few (who are showered in information, almost all of it false, from the rest of the organization). They certainly inspire dedication, as people throw passion and creativity into the process of proving (or refuting) their ideas. Those two traits are covered. What of the third, subordinacy? Is open allocation, designed around the principle of eliminating needless subordination, going to succeed under that lens?

It doesn’t matter. Subordinacy is about how a person resolves conflicts of interest between herself and the company that emerge when the company plays against her personal or career needs. In a self-executive firm, that doesn’t happen. The conflict never exists.

Doing great work ought to be a “double bottom line”, multilateral victory: it helps the company and the individual to do great things. Self-executive cultures don’t quibble with the question of how some unnecessary conflict of interest is handled by a person, which is what subordinacy is about. They render it irrelevant, by trusting people to manage their own careers and creative energies. This removes the focus on subordinacy and redirects it to something far more important, and something that can only be assessed in a person who’s given some real freedom.

What is that more important “something”? Integrity.

Open allocation doesn’t really “break” the Iron Triangle. It renders it meaningless, and that’s good enough.