Many look forward to the day when technology will enable their organization to become a real 2.0 place that draws on the full energy and knowledge of all who work there. Don’t hold your breath! There is a process that is in the way that all ignore. But it is the central implementation barrier.

Many years ago after the post war election that brought in the Labour Government in England, a new Labour MP was in a bar at the house of Commons with Nye Bevan, a very experienced Labour MP and Minister. The newbie noticed that several Labour Members were drinking with several Tories and both were having a good time. Shocked, he said “The’re fraternizing with the enemy!”. Bevan smiled and said, ‘The’re not the enemy. The’re the Opposition. You sit next to the enemy.”

We all go on and on in organizational life about the “competition”. But we all know really that the real enemy are those bastards in the other department or division.

Let’s get straight here. Here is the fractal. The sole purpose institutions is to get bigger and to accrue more financial resources in its direct control. The sole purpose of its subsidiary departments and divisions is to do the same. To imagine any other purpose is to be recklessly naive. Institutions do not exist to serve any external purpose. They exist to look after their own interests. The same is true for their parts.

All is reduced to money. So the only game in town is the budget.

At the centre of all job grading for executives, is the budget. The man with the biggest budget (I use the term man deliberately) gets the most points and is the King of the game. All executives know this. It matters not that the work that you do may have a bigger impact, budget trumps all.

Hence the silos. Hence the fact that every organization in the world will tell you that communications is their biggest challenge. They will tell you how they hope for more cooperation. But the truth is that because all are locked in a life and death struggle to get more from the budget, cooperation is impossible. For the foolish and naive executive to play the game any differently, I plead guilty here, means only that you lose and so do your people.

So to share resources is to dilute your budget. To reduce waste is to dilute your budget. To be more effective is to dilute your budget. To be more innovative is to dilute your budget. See!

True innovation becomes impossible too. Why? Because of the ROI issue. You are the ex big winner of the Trucks Division at say GM. You have a huge budget and you still are making out like a bandit back in the day. The discussion at the board is like this. Bright Board Member “Surely we all agree that soon gas prices will rise and our truck line will be vulnerable?” Senior Board Member “Yes but look at the ROI we have on this our largest investment. If we start to shift into smaller vehicles, our ROI will go down. We will not be able to bear the drop in ROI (under his breath – you idiot)”

Why did companies like BP or Shell not make the shift into renewables? Lots of talk. But when push came to shove all this was window dressing. Why? Because they cannot make the returns in the new that they make in a mature business like oil. It’s all about the budget lock in effect. The big shuts out the small, so the new cannot grow in a mature organization. If by any chance it does, the big will do its best to close it down. The Innovator’s Dilemma! The people at the top are not stupid – they are locked in by the budget.

So what does this mean?

• No executive who wants to climb will change the job grading system – who wants to be accountable for impact when a much simpler task of getting more budget is the alternative
• All the talk of innovation attacks the power holders of the mature parts that have the largest budgets – so rest assured it’s all bullshit
• All the talk of cooperation attacks the power holders ……
• All the talk of customer service being #1 attacks the main power holders….
• All the talk of beating the competition attacks the main power holders….

So what do big organizations do then to keep power if they don’t in fact do any of the things that we are all taught at school that we are meant to do and that is the public discourse inside the organizations?

They seek to get bigger. Size matters. And when they are really big, such as banks that are too big to fail, they use budget to rig the larger playing field.

So the main work of very large organizations for profit and non profit, is to influence their  field. So for schools, it’s not about the kids, it’s about the teachers. In health it is not about our health it is about big pharma. In defense it is not about our men and women in harms way, it is about big defense.

It is the same game all the way up – it is “Turtles” all the way up.

• In your department, you game the system to get and to keep more budget – your adversary is the other department in the division
• In your division…
• In your SBU…
• In your organization…
• In your sector….

So, where are we? I think that we are living a lie.

We thought that jobs were good and that our organizations were designed to compete. I certainly thought that and I was a SVP HR for a very large bank.

But we can now look behind the green curtain and see the reality. We have seen that the purpose of a job is to deskill people. We can see that all the core business process that business school teaches us to pay attention to, are subsidiary to the budget.

What this means is that nearly all the ideas that are baked into HR help make organizations grow into unresponsive dinosaurs. You get GM as a result.

So can GM be reformed? Or must we look at a new model?