Category: Management and Organizations

The invisible Bob and Martha

Humus is the thin dark layer, a few centimeters at most, that sits at the surface of the earth and sustains virtually all life on it. It takes roughly a century to form a single centimeter. It can be destroyed in an afternoon.

Most people walk over it without a second thought.

Organizations have their own humus. It doesn’t have a name on the org chart and it doesn’t appear in the annual report. It’s the accumulated living layer that makes everything else possible: trust, institutional memory, the relationships through which decisions get made and exceptions get authorized outside formal channels. Like humus, it forms slowly and invisibly, through thousands of small interactions over years. And like humus, it can be destroyed in an afternoon.

A restructuring. A betrayal. A leadership change that signals, loudly or quietly, that the old rules no longer apply. The layer doesn’t announce its departure. You notice it the way you notice soil erosion: invisibly for months, then unmistakably, when something that used to grow no longer does.

The reason organizations chronically underinvest in these things isn’t negligence. It’s visibility.

Humus doesn’t have a line item. Neither does trust. Neither does the knowledge that quietly exits when the wrong people leave. We fund what we can see and measure, which means we systematically defund the layer everything grows from.

The accounting logic is impeccable. The biological logic is catastrophic.

And the humus has a face. It’s Bob. It’s Martha. The ones who’ve been there for decades, who know where everything is and why it works the way it does, who remember what was tried before and what happened.

But here is something we don’t say: some of them chose this.

They saw, early or late, what the organization could and couldn’t see, and they settled permanently into the space between what the organization measured and what it needed. The invisible layer isn’t only where the unrecognized end up. It’s also where certain people go deliberately, because it’s the only place in the organization where the work is judged by whether it functions rather than by whether it’s visible, and the exposure to organizational politics is low enough to ignore. They knew they were invisible. Some of them preferred it that way.

Which means the organization’s failure to see them was not always unilateral. There was an arrangement. Informal and unspoken. It held. The organization got the benefit of the layer without having to account for it. Bob and Martha got to do the work they cared about without having to perform for systems that wouldn’t have known how to evaluate them anyway. It suited everyone. It cost everyone something.

We see them. We appreciate them in a vague, fond way. We call them lifers. We call them grinders. And when they retire we give them a plaque and a room full of warm applause, and six months later things start not working and nobody can explain why.

Meanwhile we celebrate the stars. The ones who rose. We built a recognition system that rewards only what our existing categories can name — ascent — rewarding the people who rise and ignoring the people who hold the ground. Then we’re surprised when the ground erodes.

The question isn’t whether your organization has this layer.

The question is whether anyone is tending it. And tending requires visibility. Which means the first problem isn’t resources or intention. It’s that some of the people who live in this layer may not want to be found. The arrangement protected them too. Making the invisible visible isn’t neutral. It changes what the layer is.

You can’t tend something you can’t see. But seeing it changes it.

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photo by Matúš Kovačovský

The Signal and the Sorting

What you project is what you attract. Not what you say you are. Not what your website claims. Not the values posted in the lobby or the purpose statement ratified by the board. What you project: the signal that emanates from every decision, every tolerated behavior, every crisis handled and mishandled. That signal is always on. It is never neutral.

The institution you lead attracts people who read it correctly. Not because people conspire to find each other, but because the signal reaches them first. And the people with options read it and move on.

A university that has stopped believing it can change anything will, over time, fill itself with faculty who have also stopped believing that. No one plans it. No one sees it happening. The institution projected something. The right people for that projection showed up.

This is not a metaphor. The mechanism doesn’t require your awareness or your cooperation. It runs regardless.

Organizations emit through what they reward quietly and what they punish quietly, through who gets promoted and who stalls, through how they treat someone on the way out. All of that is signal. It reaches people who are deciding whether this is a place where someone like them belongs.

And what you actually are is, uncomfortably, a function of what you have been willing to risk (or not risk) over time. Institutions that play it safe long enough become genuinely safe: safe to enter, safe to stay in, safe to give a mediocre decade to without consequence. They attract people for whom that is enough. Which then makes them safer still.

The reverse is also true. A genuine act of institutional courage changes the projection. It tells a different story to people who had written you off, who were waiting for exactly that signal before deciding to bet on you. You don’t have to announce the change. You have to make it. The announcement follows by itself, carried by the people who noticed.

This is why culture change is so difficult and why so many attempts at it fail. They work on the surface: the messaging, the workshops, the new leadership competencies. None of it touches the underlying projection. And the underlying projection is made of decisions, not declarations. Decisions about what you will defend when it costs something. What you will refuse when refusal is inconvenient. What you will acknowledge when acknowledgment is humiliating. The surface work is a choice, which means something else is being protected.

Every institution signals. The question worth sitting with is not “what signal do we want to send?” That question is too easy. The question is: what signal are we actually sending, as evidenced by who keeps showing up?

And who keeps leaving. Over time, not case by case. The pattern, not the story any individual departure comes with.

The exit interview is almost beside the point. You are in that data. Not the institution you intend. The one you have been building, one unframed decision at a time.

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photo by Markus Spiske

Purpose Won’t Cover a $400 Emergency

A new NBER working paper forced over a million real tradeoffs across 126 dimensions of life from 3,300 respondents. When people can’t just endorse everything, when they actually have to choose, a clear hierarchy emerges. Family well-being, financial security, and health dominate. Children’s health alone carries marginal utility 67 times the average dimension. Happiness and life satisfaction, the twin pillars of modern well-being science, rank 35th and 36th. Status, prosocial virtues, meaning-at-work, the things people readily cite in surveys, collapse toward the bottom when they have to be traded against something real.

The paper is careful about what this means. High marginal utility for something could reflect how deeply you value it, or how little of it you have. Deprivation drives up the value of each additional unit. The paper distinguishes between these interpretations carefully, and for financial security and health specifically, the data points toward deprivation. People aren’t ranking these things because of what they believe. They’re ranking them because of what they lack.

Pause there for a moment.

What that means, precisely, is that the workers in the organizations these managers lead are ranking financial security, alongside things like children’s health, which carries 67 times the average marginal utility, not as an expression of their values but as a direct measure of how much of it they don’t have. The survey isn’t capturing preferences. It’s capturing the shape of a gap. And the gap has an address.

The Federal Reserve has been confirming this for years. More than a third of American adults cannot cover a $400 emergency using cash or its equivalent. Between 1979 and 2024, US productivity rose 80.9% while hourly pay for workers grew only 29.4%. Upper-income households now hold 48% of total US household income, up from 29% in 1970. In 2024 alone, S&P 500 companies returned $942.5 billion in share buybacks, a new annual record, plus $657 billion in dividends. Over the last five years, buybacks alone are $4.1 trillion.1

The national food budget shortfall (the actual dollar gap between what food-insecure Americans have and what they need) is $32 billion a year. Closing it entirely, for all five of those years, would have cost $160 billion. The five-year buyback total is more than 25 times that figure.

Buybacks are not irrational. Capital returned to investors moves somewhere. The question the arithmetic raises isn’t whether the mechanism is efficient. It’s whether the aggregate pattern of those decisions, sustained across decades, has produced consequences that the mechanism itself doesn’t account for, and whether calling it efficient settles anything about those consequences.

Buybacks were not always a defining feature of American corporate finance. The SEC’s adoption of Rule 10b-18 in 1982 created a legal safe harbor for share repurchases. What followed was not inevitable. It was a specific revisable decision about where surplus goes. No single firm can step outside its competitive labor market unilaterally. However, the pattern that no single firm produced alone is nonetheless the pattern all of them are operating inside. Individual constraint and collective consequence are both real. Acknowledging one doesn’t dissolve the other.

The management writing industry has spent this same period building an elaborate architecture of purpose, meaning, and psychological safety. Most of the people who built it, and most of the people who bought it, are not cynics. They were trying to do something real. But there is a particular kind of self-deception available to people who are genuinely trying, the kind that lets you attend the psychological safety workshop in the afternoon without connecting it to the capital allocation meeting in the morning. The kind that lets you hold both realities in the same week without feeling their weight against each other.

This is not an argument about tax policy or labor law, though both matter. It’s an argument addressed to managers: people whose decisions about compensation, staffing, and resource allocation are neither purely personal nor purely systemic. They are something in between, which is precisely where agency lives. The question of what falls within that space is not answered by pointing to what falls outside it.

The research doesn’t adjudicate between purpose and pay. It sequences them. When people must choose, the material floor comes first, not as a preference but as a need. Everything else is built on top of it. An organization that has not secured that floor for its people, while demonstrably holding the resources to do so, is not facing an engagement problem.

It is facing the question it has been avoiding.

1 Annual S&P 500 buyback totals: 2020— $519.8B; 2021— $881.7B; 2022— $922.7B; 2023— $795.2B; 2024— $942.5B. Total: $4.06 trillion. For context, Germany’s nominal GDP in 2024 was approximately $4.66 trillion. The five-year buyback total represents roughly 88% of that figure.

Sources

NBER Working Paper

Benjamin, D.J., Cooper, K., Heffetz, O., Kimball, M.S., & Kundu, T. (2025). What Do People Want? NBER Working Paper No. 33846. nber.org/papers/w33846

Federal Reserve — $400 Emergency Expense

Board of Governors of the Federal Reserve System. (2025). Economic Well-Being of U.S. Households in 2024. federalreserve.gov

Wage Growth vs. Productivity

Mishel, L., and Kandra, J. (2026). The Productivity-Pay Gap. Economic Policy Institute. epi.org/productivity-pay-gap

U.S. Bureau of Labor Statistics. Labor Productivity and Costs, Nonfarm Business Sector. bls.gov/lpc

Pew Research Center. (2018). For most US workers, real wages have barely budged for decades. pewresearch.org

Distribution of Economic Gains

Pew Research Center. (2015). The American Middle Class is Losing Ground. pewresearch.org

Stock Buybacks

S&P Dow Jones Indices. (March 2025). S&P 500 Q4 2024 Buybacks Increase 7.4% and 2024 Expenditure Sets New Record. prnewswire.com

S&P Dow Jones Indices. (March 2022). S&P 500 Buybacks Set Quarterly and Annual Record. prnewswire.com

Rule 10b-18

U.S. Securities and Exchange Commission. (1982). Rule 10b-18. 17 CFR § 240.10b-18. sec.gov

Food Budget Shortfall

Feeding America. (2025). Map the Meal Gap 2025. feedingamerica.org

Two-Income Households

Bureau of Labor Statistics. (April 2025). Employment Characteristics of Families — 2024. bls.gov

Child Food Insecurity

USDA Economic Research Service. (December 2025). Household Food Security in the United States in 2024. ers.usda.gov

Germany GDP

World Bank National Accounts Data. GDP (current US$) — Germany, 2024. data.worldbank.org

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photo by Joss Woodhead 

Every orchestra needs a conductor. Really?

The Orpheus Chamber Orchestra has operated without a conductor since 1972. Representatives from each section meet to discuss how they’ll approach a piece. Leadership rotates. Decisions emerge from dialogue among those who will execute them.

They’re a Grammy Award-winning ensemble.

Each musician must listen more intently and communicate more directly. Take greater ownership of the whole. Lead when their expertise matters most. Follow when others’ does. This distribution of authority changes what becomes possible.

Your organization employs people who create knowledge, apply expertise, and solve novel problems. The work can’t be fully specified in advance. Solutions emerge through collaboration. Value comes from synthesis and innovation.

Management is coordination. Things need to be done, sometimes in certain ways, at certain times, by certain deadlines. The question is where the capacity for coordination resides.

Orpheus demonstrates that coordination can live in a system rather than in a person. This requires structure: the section representatives, the meeting protocols, and the rotation of leadership within sections. It requires discipline, deep engagement, clear communication, and shared responsibility.

It doesn’t require a conductor.

The musicians need a framework for deciding together how to play. They need engagement with each other and the work. They need conditions in which shared vision can emerge.

Remove the conductor and different questions surface. What does leadership look like when genuinely distributed? What does a manager do when the team coordinates itself? What changes about authority when those doing the work hold it?

Orpheus is smaller than a full symphony. They select members carefully. They’ve built practices over decades. Their approach takes more time and generates more conflict. It demands more from each musician. It’s not universal.

But it exists. And it produces excellence.

The conductor stands separate from the orchestra, interpreting the score and imposing coherence. Orpheus embeds interpretation and coherence within the ensemble itself. One model centralizes the capacity for coordination. The other distributes it.

Which model matches how knowledge actually gets created in your organization? Not the theory. Not the org chart. The reality of how problems get solved when the work goes well.

The conductor metaphor has shaped management thinking for decades. It suggests that coordination requires a central authority who stands apart from the work, sees the whole, and directs the parts.

Orpheus suggests something different. Coordination is a capacity that can be built into how people work together. Authority can reside in those doing the work. The manager’s role might be something other than conducting.

What if it never was?

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photo by Luisa Wachsmuth

Want to get better? Show your work

PwC is one of the few companies to publicly release its diversity data. What was behind that choice?

One of my aspirations early in my tenure was that I wanted to be transparent. I think we’re going through a golden age of transparency, and you need to lead by example. And I like the pressure. We made that decision because we wanted to lead, and we wanted to give others the courage to go. And if you’re waiting for the perfect story, it’s never going to be there. By putting it out there, we’re saying, “Look at us. We’re not perfect. But here are the steps we’re taking to get better.”

I don’t blindly accept that the pipeline is the problem. We had to think differently. We had to behave differently. So what we’ve tried to show with our transparency is the deliberate steps you can take to get better.

‘There Is a Bigger Role’: A C.E.O. Pushes Diversity (Published 2021)
nytimes.com

Resilience is also about building capability

Greg Case:

Resilience is typically defined as a defensive capability that’s needed to “protect the house.” At Aon, we consider resilience a company-building capability, which is a fundamentally different orientation. We define resilience as the ability to take actions at scale that simultaneously defend the house and build the house, and we’ve seen many opportunities to do both during volatile times.

The most compelling and durable source of resilience is organizational. About 15 years ago, we recognized that our clients’ needs were outpacing our ability to innovate, so we took targeted actions to improve. This included making structural changes to operate as a truly global firm, which we call Aon United.

Our organizational ability to deliver the best of Aon to our clients globally through this strategy has proven critical to our success. It’s helpful in times of crisis, but, as we’ve learned from our clients, it also enables us to see opportunity where others may see only volatility and risk.

Greg Case, is CEO of Aon, a global professional-services firm.

The corporation: it’s something more than the people in it

John Naughton is surprised at journalists and commentators being horrified at corporations doing despicable things.

Don’t they understand that a corporations is essentially a superintelligent AI which is entirely focussed on achieving its purpose — which in the case of corporations these days is to maximise shareholder value? That’s why Facebook could be entirely run by clones of Mahatma Gandhi and St Francis of Assisi and would still be a toxic company.

I have been taking an unscientific survey among friends, acquaintances, and clients about the type of manager they have had throughout their careers. No list of types or categories. I just ask. Bob Sutton would not be surprised to learn that most of the answers can be clustered around the concept of asshole.

But Naughton’s idea here is different. He is talking about the corporation as a whole. He calls on John Steinbeck to illustrate his pont:

a passage from John Steinbeck’s The Grapes of Wrathin which tenant farmers are objecting to foreclosure:

“Sure, cried the tenant men, but it’s our land… We were born on it, and we got killed on it, died on it. Even if it’s no good, it’s still ours…. That’s what makes ownership, not a paper with numbers on it.”

“We’re sorry. It’s not us. It’s the monster. The bank isn’t like a man.”

“Yes, but the bank is only made of men.”

“No, you’re wrong there — quite wrong there. The bank is something else than men. It happens that every man in a bank hates what the bank does, and yet the bank does it. The bank is something more than men, I tell you. It’s the monster. Men made it, but they can’t control it.”

The corporation is something more than the human persons in it. It’s a monster. They made it but they can’t control it.

 

100 recommendations for making meetings more beautiful

Members of the House of Beautiful Business community shared ideas on how to improve meetings. Before you join your next meeting, have a read-through of what they came up with. See what the repetition is saying (or not saying).

Even better: before you schedule your next, ask yourself: does this really require a meeting?

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Highlighting content from my September 2021 newsletter.

Can we manage without managers?

In response to an article in The Economist about the need for middle managers, Michele Zanini writes:

Just because the ladder has fewer rungs doesn’t mean leadership opportunities are scarce-quite the opposite. By giving people the ability to gain influence (and compensation) based on accomplishment as opposed to advancement, an organization ends up with more, not fewer leaders. And these leaders don’t have to devote their talents and energy to politicking or sabotaging each other in zero-sum promotion battles.

The accomplishment-advancement distinction is worth exploring, but I don’t share Michele’s conclusion: the organization will likely end up with more spirit of initiative, not necessarily more “leaders”.

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Highlighting content from my September 2021 newsletter.