<>< Josh Rule : : 2008 MCPP Intern
Paul Graham, an author and influential programming guru, hints in his essay You Weren’t Meant to Have a Boss! that perhaps markets operating inside an organization would be a better strategy than traditional chain-of-command leadership. The entire essay is worth the read, but this quote was particularly interesting:
…[S]ince human nature limits the size of group that can work together, the only way I can imagine for larger groups to avoid tree structure would be to have no structure: to have each group actually be independent, and to work together the way components of a market economy do.
Graham goes on to say that perhaps someone should take a deeper look at this idea. One person who has thoroughly investigated the concept of incorporating markets into companies and other organizations is Charles G. Koch. His company, Koch Industries, is one of the largest private companies in the United States. His ideas have been encapsulated into a book called The Science of Success, and are central to the ongoing research of the Market-Based Management Institute.
The idea of operating an organization like a market is a potentially good one, granted that the rules and incentives are properly set up. Has anyone else done serious work in this area? What are your thoughts about organizing a company around an internal market? Leave your ideas in the comments below.