start up culture, an impossibility theorem
what we see is usually what we get
This is a thought that’s been on my mind – I tried it out at a seminar the other week and although I don’t think anyone was particularly convinced, nobody seemed to think it was ridiculous, so let’s see if you lot can talk me out of it. The basic idea is something like “risk aversion is an intrinsic property of some kinds of organisations” and that attempts to get the Department of Transport to act like a start-up are quite possibly culturally doomed. The argument goes something like this.
If an organisation has been around for a long time, then it has not yet been destroyed.
If it has not been destroyed, then it has never taken an existential risk which went bad.
Therefore, either 1) it has been incredibly lucky, or 2) it has not taken many existential risks
Of those two alternatives, 2) is intrinsically more likely to be the case than 1)
If an organisation has not taken many existential risks, then either 1a) it has been lucky not to have been in the position to take existential risks, or 2a) it has developed norms against the taking of existential risks.
Of those two alternatives, 2a) is intrinsically more likely to be the case than 1a)
Therefore, if we are seeing an organisation today which has been around for a long time, it is highly likely that this organisation has developed strong internal norms against taking existential risks.
I think thus far, we’re fairly rigorous. When we make generalisations that “the public sector has a strong culture against risk taking”, we need to remember that we’re looking at the dots on that famous Abraham Wald graphic and we’re not seeing the organisations and institutions that didn’t make it:
More speculatively:
It is somewhat difficult to distinguish between existential risks and non-existential risks.
Mistaking an existential risk for a non-existential one is potentially going to end the organisation, but mistaking a non-existential risk for an existential one will not.
Therefore, a similar filtering effect will apply meaning that the sample of long-lived organisations will be biased toward those with a tendency to be conservative in judging the impact of risks.
And even further:
Cultural norms and practices tend to be simplified and coarsened over time, as they have to be communicated to new employees in the organisation.
So conservatism about existential risk tends to turn into a hostility to all risk, which can end up as a hostility to all kinds of novelty.
By now we are getting really quite speculative indeed
As a general tendency, and with significant variance and exceptions, the longer an organisation has been around, the more likely it is to be very resistant to change.
But resistance to change can itself be a source of blindness to existential risks, which puts some kind of limit on this tendency; the very very longest-lived organisations may not be the most hidebound.
Basically, the idea here is to see how much usable management science content you can get out of Nassim Taleb’s important distinction between normal risks, and risks which take you out of the game; it’s the “Lindy Effect” applied to culture. As I suggested at the seminar, if it’s accurate, this would suggest that “new problem, new team” is the best approach to policy making – he doesn’t justify it in these terms at all, but this is also at the heart of Malcom Sparrow’s “problem based regulation”.
Interesting. I consult a lot of early-to-mid-stage startups.
There's typically a sharp distinction made between "scaling" and "post-scale" startups. I've learned that this is because a pre-scaled startup is quantum physics; a post-scale startup--a business--is Newtonian physics. Most lenses for looking at businesses are fundamentally Newtonian. There's little awareness that they're Newtonian. Trying to apply them to quantum stuff is inefficient at best, disastrous at worst.
Government is not a business, first of all. Its mandate is to serve *every* customer; if I were handed a business like that, the first thing I'd do is fire most of the customers. Not an option for government. Second, the understanding of "risk" a government brings to the idea of "innovation" or "flexibility" or "spontaneity" or whatever "startup" quality they're trying to capture is based on Newtonian principles, the only ones they (imperfectly) have. It's what's in all the books.
In my experience, "like a startup" from a post-scale org usually means "a way to work out undesirable/risky/weird elements as you would a splinter," i.e. gently and indirectly. Not everyone is in on the scheme, alas. The track record of such efforts is incredibly poor.
Besides (1) lucky and (2) never taken existential risk, isn't there the option that (3) it has become resilient to a degree that it would take not one but many catastrophes to destroy it? I guess we can argue whether or not a threat you can survive counts as "existential", but I'm not sure that matters since my understanding is that you're asking about an organization's willingness to take big swings, not its suicidality