Manage to scale

Human beings love to make things big and do things big. The bigger the better. Especially boys and men.

Playing dolls with my sister on the floor with a cardboard doll house:

Her: “You be the dad and I’ll be the mom. Let’s cook dinner for the kids.”

Me: “Wait. First let’s make the kitchen bigger. And then we could add more rooms over here. And put a garage over there. With some cars. And maybe we could make a bunch of doll houses like this and sell them. And start a doll house factory. And make doll houses for people all over the world.”

We are so proud of ourselves when something works at one scale, we feel obligated to replicate it at a larger scale. Where industrialization and capitalism dominate our culture, we actually feel inadequate if we don’t have ambitions to “take it to the next level.”

Here’s the problem. At each next level, understanding diminishes. I know less and less what I’m talking about the bigger and bigger my operation is. And with less understanding about the consequences of my decisions, bad consequences are more likely.

I recently learned of a guy named Carlos Slim who has an estimated net worth of $72,600,000,000. Seventy-two billion! I learned about him because he became part owner of a company that owns a company that owns a company here in Maine. I wonder how Mr. Slim can possibly understand what’s going on at the little company in Thomaston, Maine, and make decisions accordingly. And in Thomaston, Maine, it’s a big company. The biggest in town.

When we aggregate wealth, or property, or employees our ability to understand our domain gets spread more and more thin in proportion to the size of the domain. Of course we can have “people,” you know, to manage the garden and to manage the wealth and to manage employees. We hire experts to help us understand. But there is no disputing that someone who manages 5 employees knows those employees better than someone who manages 20 employees, even with expert help. Someone who manages 5 acres of land knows that land better than someone who manages 500 acres of land, even with expert help.

There are many, many paces in our society where people have management responsibilities that are hugely out of scale. And this I think is the cause of many bad decisions.

The farmer with a small domain and many years of experience with it has a much better understanding of that land than the new owner of a large domain. It’s pretty simple. I’m not saying that the young executive in Manhattan knows nothing of his company’s land in northern Maine, I’m just saying that his understanding is relative to his proximity. No one should pretend that he is as well positioned to make decisions about his land as is the old farmer to make about his own land right next door.

Close proximity and long duration increase relative understanding. I am apt to make better decisions for the land over the long run if I have gained a close familiarity with the land over a long period of time than if I have relatively little experience and I am making judgments from a long way away.

Notice how I said “better decisions for the land.” The far away executive owner of the land in Northern Maine or the far away executive owner of the company in Thomaston, Maine might very well make decisions in the best interests of themselves and/or their companies. But such decisions might not be in the best interests of the local environments or communities.

Capitalism and industrialism have given us permission to make decisions with limited understanding towards limited outcomes; something like this: “I need to understand only enough to stay within the law and my primary outcome is to get richer.”

Such limited understanding towards such limited outcomes results in people getting rich, legally. And many people have gotten rich at ridiculously large scales. Yet limited understanding and outcomes also results negative consequences for environments and communities. Most people in the world don’t get rich. And many of those that do get rich don’t experience the bad consequences on environments and communities because they don’t live there. And because they are living at “a different scale.”

I’m not saying that rich people or distant landowners or corporate executives are bad people. That is not for me to judge. I assume that each person is making the best decisions they can based on where they sit and how they see things. Cultural norms, at least in the culture where I live, drive us in extremely powerful ways to make self-interested decisions with limited understanding.

I am saying that we need to change the cultural norms.

Existing cultural norms have worked well for getting some people rich, but if we want to save the planet and sustain ourselves as a species we need cultural norms that drive us in extremely powerful ways towards making decisions with much greater understanding for much wider interests. We need to manage to scale.

So by “manage to scale” I mean that one person should not have responsibility for more than they can manage responsibly. It’s pretty simple. I should not have responsibility for more wealth or land or employees than I can understand enough to make good decisions not just for my own self interests, but in the interests of myself AND the economy, the environment, and the community.

Need some numbers? How about 5 acres, $500,000, and 5 employees.

Can you imagine how different our world would be if each person managed no more than 5 acres, $500,000, or 5 employees?

Okay, these numbers may seem arbitrary and may be totally out of scale and inappropriate for your world. Change the numbers to represent “reasonable scale” in your world. Whatever. I have picked some numbers to illustrate my point.

When one has 5 acres to manage, and only 5 acres, one takes care of it. One wants to understand that land and get the most out of it, and manage it in such a way that it continues to be healthy and productive for future generations; for one’s heirs. When one owns 5 acres, and only 5 acres, one has just one community and has incentive to invest in that community. One wants the community in which one’s 5 acres exist to be the best community possible.

When one has $500,000 to manage, and only $500,000, one takes care of it. One invests it in ways that will result in long term benefits; and that includes investing in the community where the 5 acres exists.

When one has 5 employees to manage, and only 5 employees, one takes care of them. One invests in those employees so they invest back in the company. One understands those employees and is better able to meet their needs, so they invest back in the company. One cares for the community in which those employees live.

Households around the world average between 2 and 7 people; think: about 5.  His is a natural number for human beings. About 5 is the size group that humans have lived with for thousands of years. It’s the number of people that we are used to being with, used to managing. It’s the size group that we most understand.

Even modern business management books recommend that managers are most effective when responsible for small numbers of direct reports, such as 5. I’m not saying that no company should be larger than 5 people. Rather, I am simply arguing that companies should be structured such that no single person has responsibility for managing more than 5 or so people. That’s the structure that results in optimal understanding of employee skills, personality traits, and aspirations.

And notice how I said “over the long run” (in that paragraph way back just before the line). If you have learned about my Theory of Relative Understanding you have learned that I believe there are two types of scale: size and time. One way that I am encouraging that we “manage to scale” is in terms of size: size of land, size of wealth, size of workforce.

Another way that we should “manage to scale” is in terms of duration.

We humans have made many decisions at huge chronological scales. We have put some things in place that will last a very, very long time and have consequences for generations of humans thousands of years into the future. Think: nuclear waste, mines, dams, buildings, roads, pollution, climate change.

I think we have made decisions with extremely limited understanding of the long term implications and this does not bode well for future generations.

Capitalist and industrial cultural norms encourage us to make decisions with extremely high regard for short term outcomes and extremely low regard for long term outcomes. I make decisions that benefit me, now, without understanding the consequences far away, in the future.

So by “manage to scale” I mean that one should not make decisions that have impacts on future generations that are not well understood. With such limited understanding about the long term impacts of nuclear waste, chemical fertilizers, DNA modification, mining tar sands, fracking for natural gas, damming rivers, extinguishing species, and other such activities, we should not do these things.

All the things mentioned above are new in the last 100 years. In the whole history of the earth, even in the history of human existence, we have a sliver of experience with these things. It’s like a corporate manager who has been on the job for thirty years and then with just 10 minutes of experience with a new technology he decides to embrace it and make huge and lasting changes to the company.

Need some numbers? How about 5 generations.

Can you imagine how different our world would be if tried to understand the impact on the next 5 generations of every decision we make? For humans, a generation is about 25 years so 5 generations is about 125 years. That would mean that for every decision we would consider the impacts for at least the 125 years.

And if you are not sure of the impact beyond 5 generations and if there is any chance that there might be negative long term impacts, don’t do it. Let’s have a cultural norm that says we should limit our decisions to impacts we can understand.

When we don’t understand the implications of our decisions, bad things are likely to happen. Understanding is relative. The farther away I am from something, in space, time, or scale, the less I understand it. Doing things out of scale is risky. Doing things radically out of scale is extremely dangerous.

Ever heard the term, “he’s in over his head.” It means, “he might drown.”

If you don’t understand the wide range or long term impact on our economy, our environment, or on our communities, don’t do it.

Back to the doll house on the floor with my sister. Let’s just chill. We don’t need to build a bigger doll house or more doll houses. Let’s just make dinner for the kids.


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