The Positive Preference Pyramid

TL;DR: Loyalty is the glue holding organizations together; when let loose, it is a deadly poison.

A few days ago, I heard a piece of gossip on my social network. It was from the perspective of a C-level leader who’s conducting a cost reduction plan, as do a lot of people do these days. The leader asked some of his subordinate middle managers to propose and carry out the appropriate reductions within their teams. After a couple of weeks it turned out that what his underlings did was to “reduce” the one remaining employee who actually had the skills to significantly lower operating costs by reconfiguring some parts of the system. To add insult to injury, it turned out that the same employee had proposed multiple times to reduce costs in the preceding months, only to be downplayed by the same middlemen. By the time that the C-level guy has learnt of this matter, that employee had already been driven out. To say that the C-level person was unhappy would be an understatement.

Most people in the industry have heard many such stories over the years, including at Twitter just last week. A trivial way to interpret this situation would be as “those middle managers are all rotten”. I am not satisfied with this interpretation because there are multiple ways a person can become a middle manager, and quite a few of them try to avoid promoting “rot”. Indeed, I believe that there must be a systemic cognitive phenomenon in play that is inherent in the organizational role of middle management. Without further ado, I would like to present my theory of the Positive Preference Pyramid.

The Positive Preference Pyramid

The pyramid is of the three possible preferences that a stakeholder can have with respect to a specific line of work. The preferences are:

• When people who are driven by a vision of how things should be, I call them Visionaries. In the example above, that’s the C-level leader - he has an overall goal of reducing expenditure, but he also insists on doing it at a certain quality bar, by letting a competent specialist guide the process.

• When people are driven by loyalty, I call that situation “being a Loyalist”. In the story above, these are the middle managers who executed on cost reductions. Their focus on maintening of an illusion of control to keep their boss haply eventually caused them to lose awareness of the most basic things going in their own little corner of the organization.

• The remaining people are driven by labor externalities - that is, factors that are not directly connected to the business value of what they do. Examples of externalities are compensation or satisfaction from carrying out tasks even if of little business value. I call these the Laborers. In the example above, it is the one competent employee, the one who ended up being dismissed.

The Pyramid is not (always) about Organizational Hierarchy!

The first example we considered indeed involved a C-level senior leader as the Visionary, the mediocre middle management as the Loyalists and the unlucky expert as the Laborer. However the Pyramid structure often does not coincide with the organizational structure. The positive preferences exhibited by an individual are contextual to the specific line of work at a specific time, and thus may not be aligned to their organizational roles.

I once heard a phrase about an engineer whom I happen to know in person and consider a genius - “the first two CEOs of that company were good - they would call him, hear him out and do as he said”.

Clearly, the leaders - who were organizationally senior to said engineer - were the Loyalists in this case, while he was the Visionary with respect to quite a lot of the technical culture that eventually made that organization successful for all of them. Indeed, if the leaders had tried to be the visionaries on their own, the outcome would have been worse - likely, much worse.

Overdosing on loyalty

First and foremost, we need to observe that in any given area of enterprise, there is very little middle ground between satisfying others’ judgment and exercising one’s own judgment. A consistent preference for following others over time will quickly lead to loss of facilities for doing well on one’s own.

Upton Sinclair once quipped that

It is difficult to get a man to understand something, when his salary depends on him not understanding it.

(quote via the only remotely related but brilliant blog post Strategic Airpower 101).

A hardened upward loyalist’s sense of self worth derives almost exclusively by the assistance they render to their patron. However since their preoccupation means they had lost the edge for doing something useful on their own accord, the only remaining course of action is to ensure nothing negative happens. A loyalist would thus avoid confronting their patron, even if a struggle in the short run would lead to a greater good in the long run.

When bad times come, problems don’t tend to solve themselves. Instead, people who are so inclined use their problem-solving to get the organization in the clear. The tendency to silo and keep quiet sabotages such work. In such circumstances, the practice of upward loyalty is a major force dragging the entire ship down.

Why do loyalists exist?

This brings about the question – why are loyalists even needed in the first place? Several reasons come to mind.

Loyalty keeps the organization together at short term. Assuming basing trust, alignment and competence, projects should be allowed to run on for stretches of days to weeks without second guessing in between. Loyalty, both upward and downward, is the damping mechanism to allow that.

Even when undesirable, loyalty is often good enough when not facing adversity. To avoid immediate failure, most organizations really need to keep keen on only a few things only. As long as these are addressed, the remaining long tail tolerates “making do”. However over long term it is often the case that “the sleep of reason produces monsters”, that is, complacency gives way to unforeseen vulnerabilities.

Agreeing on vision is hard. Vision necessarily stems from shared knowledge. However, getting knowledge across requires the presence of ego on all sides, and ego causes people to clash and disagree. Most experienced leaders counteract that by establishing a culture of managing dissent and selecting their subordinates to fit that culture. Their inexperienced counterparts just bring on loyalists who simply don’t disagree at all.

Sometimes there just isn’t a visionary available. Modern tech management is very operations-heavy; for a struggling visionary, a loyalist underling may be regarded as preferable to not having anyone at all.

Visionaries have less political capital. The focus on vision leaves less opportunities to deal with the personal needs of people around you - which means less of a capacity for the everyday needs and frustrations of people surrounding them, hence less political capital. Loyalists are exactly the opposite and may accordingly prosper while most of the organization does not.

Reflection on the Rao Pyramid

The idea of a three-tiered pyramid describing organizational behavior stereotype is strongly inspired by a shitpost-turned-into-book called The Gervais Principle, Or The Office According to “The Office” by Venkatesh Rao. You can skip to this review by Scott Alexander for a very intelligent reader’s appraisal of Rao’s main ideas.

The model I articulated here is an attempt to develop the same idea in a way that is mindful of motivational psychology, and, frankly - not as misanthropic. For example, Rao’s admittedly idiosyncratic designation of three tiers are “the sociopaths, the clueless and the losers” does little to promote awareness of self or others; the hurtfulness of the labels prevented me from comfortably applying them to any of the people I’d worked with.

Summary: Organizational Evolution and Some ideas for Remediation

One core idea, that in my opinion Rao hit spot-on is the notion that organizational decline over time is manifested in a hypertrophy of “loyalists” (as per the Pyramid) or “the clueless” (as per Rao) at the expense of the other two layers, eventually making the organization too dull to continue existing in a changing world.

One consequence of considering the Positive Preference Pyramid is asking in what lines of work is vision an absolute necessity? In which it is it not?

For a SW “feature factory”, it is absolutely crucial to have a process vision. For a “moonshot organization”, such as SpaceX or the Skunk Works, it may be bringing together a dream team. A product-led organization necessitates a product visionary. Too much vision could be a bad thing - for example, moonshot organizations tend to function poorly if subjected to an excess of red tape.

A different matter to consider is containment. While the introduction of loyalists is unavoidable, the expectations and process around these need to be explicit and obvious. A loyalist should be held as a useful ancillary, but never allowed to reign.

By and large, a lot of people’s reaction to “seeing how the sausage is made” is nihilism, essentially saying that all organizations are inherently flawed and indeed, unfixable. However it is my opinion that organizations may be designed to last for quite a while, even if made from imperfect human beings (being the only kind of human beings in existence) - but of course, to achieve that, at least the organization’s fundamental human vision needs to be in the hands of someone who’s capable of having a vision.