I was reading Geoffrey West’s book, Scaling: The surprising mathematics of life and civilization recently and something interesting jumped out at me. Where networks, whether they are biological or man-made, are concerned, there appear to be some efficiencies as the network grows. Generally speaking, fewer resources are required for the same amount of effort as scale increases two-fold or more. That applies when we are talking about networks. However, when West reviewed corporations he noticed that the same benefits of scaling did not apply. Surprise!
Hold my beer. I’ve got this…
The organizations that West examined were very likely hierarchies. Hierarchies are the worst performing sort of network. So, it is no surprise at all that scaling doesn’t work well for hierarchies. As hierarchies get larger, communication and the flow of resources tends to get less efficient. Living systems are self-organizing, cities are self-organizing, hierarchies are definitely not self-organizing.
If West had looked at organizations that were founded on self-organization like Morningstar, W.L. Gore, or Semco, I suspect he might have found a different result.