Why large organizations eventually reward certainty more than competence
The First Ornament
In 2010, during the final two years of my tenure as Head of Business Development, our company launched an ambitious programme to cultivate a new generation of management talent. Department heads were instructed to identify promising candidates for a leadership development initiative that was supposedly designed to discover high-potential employees and prepare the company’s future leadership.
On the surface, it was an entirely sensible idea. Any organisation worth its salt should concern itself with succession. Tomorrow has an inconvenient habit of arriving whether one has prepared for it or not.
Reality, however, proved rather more elaborate.
Only a few days after the official announcement, I was quietly taken aside and informed that the programme was not quite as open as it appeared. There were, shall we say, unwritten expectations. Certain complexions were particularly desirable. Female applicants enjoyed a very distinct advantage. None of this existed on paper, naturally. No policy could be produced. No directive could be quoted. But I was gently advised that whoever I nominated would be expected to satisfy these decidedly unofficial criteria.
This was years before the great DEI fervour swept through boardrooms and bureaucracies alike, before every multinational competed to advertise its moral sophistication. We were still in the comparatively quaint corporate landscape of Central Europe. Yet even then the direction of travel was unmistakable.
They were not looking for talent.
They were looking for decoration.
The objective was not to improve the company but to improve the appearance of the company. To make a thoroughly Central European enterprise look just a little more cosmopolitan, a little more fashionable, a little more in step with the prevailing winds.
I nominated nobody.
Officially, I explained that my department was already understaffed, projects were piling up, and unless management wished to abandon delivery schedules altogether, I required every member of my team exactly where they were.
To my mild surprise, that explanation was accepted.
My staff, however, were disappointed. They watched the chosen few parade through the corridors with the unmistakable swagger of people who believed they had already received tomorrow’s promotion. They strutted around like turkeys a few days before Christmas—magnificent in their own eyes, blissfully unaware of the calendar.
The programme itself enjoyed only a brief existence.
After a flurry of heavily publicised internal fanfare, inspirational workshops and carefully photographed corporate enthusiasm, it quietly dissolved into irrelevance. None of its graduates ever rose to anything particularly significant. Years later, virtually every member of that carefully curated elite had disappeared from the company altogether.
It turned out our organisation still possessed something remarkably healthy.
An immune system that worked.
Results still mattered more than symbolism. Delivering value still outweighed accumulating fashionable credentials.
At least back then.
After I left the company, I stopped paying attention. Whether that immune system survived the following decade is a question I cannot answer.
Recognition as Currency
Recognition is a curious drug.
Unlike money, it costs almost nothing to manufacture.
Unlike authority, it can be distributed in almost limitless quantities.
Unlike competence, it demands no measurable achievement whatsoever.
It merely requires an audience.
That makes it one of the cheapest and most effective currencies any institution possesses.
Once someone has demonstrated sufficient enthusiasm, unwavering loyalty or simply reliable conformity, the organisation rewards him with something considerably more intoxicating than a financial bonus.
Visibility.
His photograph appears in the company newsletter.
He is invited to conferences.
Asked to participate in advisory panels.
Introduced as a “thought leader.”
Interviewed for the corporate podcast.
Quoted in internal communications.
Soon strangers begin recognising his name.
Colleagues congratulate him.
Senior executives greet him in corridors with reassuring familiarity.
None of this necessarily changes what he is actually permitted to decide.
But it changes something far more consequential.
It changes what he believes about himself.
Becoming the Symbol
There is an old observation that actors eventually begin resembling the characters they portray.
Organisations exploit much the same phenomenon.
At first, the volunteer merely repeats the language of the institution.
Then he becomes associated with it.
Eventually he loses the ability to distinguish his own identity from the role he performs.
He no longer advocates the company’s values.
He becomes one of those values.
Or, more precisely, he becomes convinced that he has.
Power has quietly promoted him from participant to symbol.
And symbols are astonishingly useful.
They reassure outsiders.
They inspire insiders.
Most importantly, they give abstract ideas a recognisably human face.
Every institution eventually discovers the immense value of mascots.
The mascot is not expected to formulate policy.
He is expected to embody it.
That distinction is anything but trivial.
Power adores symbols.
Symbols, unfortunately, possess a persistent tendency to mistake themselves for power.
A Lesson in the Loire Valley
I first recognised this pattern long before sustainability departments, diversity officers and corporate culture champions became permanent fixtures of modern organisational life.
In the summer of 1999, I spent several weeks guiding groups of Swiss retirees through the Loire Valley.
The châteaux were magnificent, naturally, but endless hours aboard a tour bus have a peculiar talent for producing conversations that would never emerge anywhere else.
One passenger, in particular, has remained with me ever since.
He had spent his entire professional life as a food safety inspector in Switzerland.
At the time, Europe had become thoroughly intoxicated by what was then marketed as the “bio” movement. Organic labels multiplied overnight. Packaging turned reassuring shades of green. Prices climbed enthusiastically. Consumers congratulated themselves on purchasing food of demonstrably superior moral character.
Curious, I asked him whether the transformation was really as profound as it appeared.
He laughed.
Then he delivered one of the most wonderfully deflating sentences I have ever heard.
“Most of it is marketing.”
He explained that many products themselves had changed remarkably little.
The labels had changed.
The language had changed.
The shelves had changed.
The story had changed.
The underlying reality often had not.
I have remembered that conversation for more than a quarter of a century.
Not because it proved every environmental claim false.
It did nothing of the sort.
I remembered it because it revealed something far more general about organisations.
Changing the appearance of virtue is very often easier than changing reality itself.
When Virtue Becomes Branding
Corporate history offers no shortage of examples.
When environmental concerns began to dominate public discourse, many of the world’s largest energy companies enthusiastically unveiled ambitious green visions. Statoil became Equinor. New logos appeared. Sustainability reports grew steadily thicker. Executives delivered polished speeches about the future. Chief Sustainability Officers seemed to materialise almost overnight.
Some companies undoubtedly pursued genuine transformation.
Others pursued something rather different.
Subsidies.
Public goodwill.
Political insurance.
Investor confidence.
Then economic conditions shifted. Green investments became less attractive, shareholder priorities quietly reasserted themselves, and a remarkable number of these grand ambitions evaporated with astonishing discretion. Balance sheets reclaimed their traditional authority.
The public eventually coined a new word.
Greenwashing.
The word itself is revealing.
It does not accuse companies of failing to protect the environment.
It accuses them of succeeding in something else entirely.
They had successfully manufactured the appearance of transformation.
The Rise of the Corporate Ornament
The same pattern appears almost everywhere one cares to look.
Diversity ambassadors.
Culture champions.
Purpose officers.
Innovation evangelists.
Transformation leaders.
Wellness coordinators.
None of these roles are inherently fraudulent.
Some perform genuinely valuable work.
Many are occupied by thoughtful, capable and thoroughly conscientious people.
That is not the point.
The point is structural.
Notice where these roles usually reside.
Not inside production.
Not inside engineering.
Not close to customers.
Instead, they occupy the connective tissue surrounding the operational core.
Close enough to senior leadership to remain highly visible.
Far enough removed from day-to-day operations that success becomes difficult to measure with any precision.
Visibility substitutes for accountability.
Symbolism substitutes for production.
The mascot flourishes.
The Psychological Transformation
By this stage, the fool has undergone a remarkable psychological transformation.
He no longer regards himself as someone who supports the organisation.
He believes he represents it.
The distinction appears almost imperceptible.
Its consequences are anything but.
People who believe they represent something gradually stop asking whether it is correct.
Their task is no longer to examine.
It is to defend.
Criticism becomes personal.
Disagreement becomes disloyalty.
Questions become attacks.
The mascot slowly transforms into a guardian.
And that is the moment an organisation acquires something every sufficiently large hierarchy eventually develops.
An immune system.
The Organisational Immune System
Biological immune systems perform an extraordinary function.
They distinguish between what belongs and what does not.
Most of the time.
Occasionally they make catastrophic mistakes.
Healthy tissue is mistaken for disease.
The body begins attacking itself.
Medicine calls these autoimmune disorders.
Organisations develop remarkably similar conditions.
Every sufficiently large institution eventually creates a class of people whose primary purpose is no longer producing value but defending orthodoxy.
They are not necessarily leaders.
Nor are they necessarily experts.
They are custodians.
Gatekeepers.
Interpreters of acceptable belief.
Their task is to recognise foreign bodies.
New ideas.
Uncomfortable questions.
Awkward data.
Difficult personalities.
Independent thinkers.
The immune system rarely pauses to ask whether these things might prove useful.
It merely asks whether they belong.
Bureaucracy as Evolution
Every organisation eventually reaches a size where this layer becomes indispensable.
Not because chief executives enjoy bureaucracy.
Quite the opposite.
No chief executive can personally enforce every policy.
No politician can supervise every civil servant.
No revolutionary leader can monitor every local committee.
Power delegates.
The immune system grows.
Middle management.
Human Resources.
Compliance.
Communications.
Party secretaries.
Regional coordinators.
University administrators.
Corporate governance.
Ethics committees.
Culture offices.
The names differ.
Their evolutionary purpose changes remarkably little.
Interpret.
Translate.
Enforce.
Repeat.
Absorb.
There is something rather curious about these positions.
They are seldom occupied by the organisation’s greatest experts.
Experts remain valuable precisely where expertise creates value.
Designing aircraft.
Writing software.
Performing surgery.
Negotiating contracts.
Running factories.
The immune system requires a rather different collection of virtues.
Reliability.
Predictability.
Alignment.
Experts can become troublesome.
Experts occasionally tell inconvenient truths.
The immune system prefers certainty.
Solving Politics Instead of Problems
This gradually explained something that had puzzled me throughout much of my own career.
Why did so many highly capable people slowly disappear from positions of influence while others—whose operational achievements appeared, at best, unremarkable—continued ascending the hierarchy?
For years I assumed I had simply overlooked hidden talents.
Perhaps they possessed strategic brilliance invisible to the rest of us.
Perhaps senior management recognised qualities we had all failed to appreciate.
Occasionally that was undoubtedly true.
Far more often, I now suspect something considerably simpler was taking place.
They reduced uncertainty.
Not market uncertainty.
Political uncertainty.
They could be trusted to defend yesterday’s decision tomorrow.
They could be trusted to explain contradictory policies without visible discomfort.
They could be trusted never to surprise their superiors.
Competence solves problems.
Predictability solves politics.
And hierarchies eventually discover that politics never sleeps.
The Bandits and the Believers
There is, however, another class of climber.
One considerably more dangerous.
The economist Carlo Cipolla described him as the bandit.
Unlike the fool, the bandit is not driven by ideology.
He is driven by advantage.
Where the fool sincerely believes, the bandit merely calculates.
He understands perfectly well that today’s fashionable doctrine may become tomorrow’s embarrassment, and he adjusts accordingly. His vocabulary changes with the seasons while his loyalties remain fixed—to himself.
He champions sustainability until shareholder returns demand something else.
He celebrates globalisation until protectionism becomes commercially advantageous.
He extols the virtues of remote work before rediscovering, with suspicious enthusiasm, the irreplaceable value of office collaboration.
His convictions travel remarkably light.
Bandits often reach senior leadership because adaptability becomes increasingly valuable near the top of any hierarchy. Ironically, they frequently surround themselves with fools.
The arrangement serves both parties admirably.
The fool mistakes proximity for influence.
The bandit acquires an army of loyal defenders.
For a while, the relationship appears perfectly stable.
When the Scaffolding Takes Over
Eventually, however, something unexpected begins to happen.
The fools multiply.
Visibility accumulates.
Recognition compounds upon recognition.
Entire departments emerge whose authority rests not upon production but upon interpretation.
The immune system begins influencing the organism.
This is rarely the product of conspiracy.
Nobody sat in a boardroom decades ago and designed such an outcome.
Evolution rarely requires design.
Small incentives, repeated patiently over many years, are perfectly capable of constructing entirely new institutions.
The people originally hired to communicate policy gradually begin shaping it.
The people originally tasked with enforcing standards quietly begin writing them.
The interpreters become legislators.
The scaffolding slowly starts redesigning the building.
By this point, even senior executives often struggle to distinguish operational necessity from institutional mythology.
The organisation has acquired a remarkable new capability.
It no longer merely produces products.
It produces certainty.
Autoimmune Organisations
This is the stage at which many institutions begin behaving in ways that seem faintly absurd to outsiders.
Projects continue despite obvious failure.
Metrics replace outcomes.
Meetings multiply while decisions quietly evaporate.
Reporting expands as production contracts.
The institution becomes progressively more concerned with demonstrating virtue than generating value.
Employees spend increasing amounts of time proving they are working instead of actually working.
Documents proliferate.
Committees reproduce like rabbits.
Language becomes oddly ceremonial.
Reality slowly yields to narrative.
Anyone who points out the widening gap between the two increasingly finds himself treated not as someone identifying a problem, but as someone creating one.
The immune system has detected yet another foreign body.
The Ladder Changes
Looking back, I no longer believe my old friend was telling me that I lacked managerial talent.
I think he was telling me something considerably harsher.
I had failed to understand that large organisations eventually optimise themselves for internal stability before external performance.
The company I believed I was helping to improve had long since begun solving an entirely different problem.
Not how to become better.
How to remain coherent.
Those are not the same objective.
Sometimes they coincide.
Often they do not.
And once coherence becomes more valuable than truth, the ladder itself changes.
It no longer rewards those who solve difficult problems.
It rewards those who reassure everyone that the problems are already under control.
