Briam Armstrong and a new surge of rational control?

How managers get the most out of their teams is a well trodden topic in the fields of Sociology, Management and Business Studies. Staff that are more productive will output more, and more output is what everyone is after.

When looking at the techniques used by managers in this area there are two useful classifications, the first is “rational control” and other “normative control”. Rational control is more scientific in nature, think of Taylorism and it’s modern incarnations, while normative control is about appealing to the hearts and minds of your workforce in order to gain the commitment to your enterprise. As Barley and Kunda put in in their paper from 1992:

“By heeding the symbolics of leadership and by attending to employees’ values, managers could enhance their firm’s competitiveness.”

Another interesting observation from the same paper is that history has witnessed “surges” in rational and normative control, where one of the two approaches dominates over the other. There are some problems with this idea, the focus on the developed north and the later focus on the knowledge economy specifically, however I like the neatness of the overarching idea.

In the contemporary knowledge economy we can see these ideas of normative control in full effect when observing startups. Startups have codified cultures to help with employee alignment; they have broader “missions” that typically ignore the drive to make a profit; and they give their staff autonomy through KPIs to hit, rather than processes to follow. Remember Google’s 20% time? Consider that a high point of modern day normative control.

You could consider recent demonstrations within the likes of Google, Amazon, Uber and others as the downside of normative control. If you allow your staff the space to express their values it follows that they might speak up when the company does something they don’t like.

Which brings me to the Coinbase CEO. Clearly Brian Armstrong isn’t too keen on this recent trend. The idea that colleagues would get into arguments over politics, or worse, disrupt a valuable deal, is counter to their tenet that the mission comes first.

In response to Armstrong’s post Dick Costolo (the former CEO of Twitter) then argued:

“Tech companies used to welcome lively debate about ideas and society. It was part of the social contract inside the company, and what differentiated tech culture from, say, Wells Fargo culture. Now it’s considered a distraction.”

There are two interesting things here. First, an acceptance of the normative control of “tech culture”. And second, an assertion that Brian’s view is both dated and reminiscent of Well’s Fargo, a company who, presumably, took a more “rational” approach.

While Coinbase is just one company, it’s definitely an influential one, particularly in the hot space of DiFi and the blockchain more broadly. What’s more Brian’s view got strong support from Paul Graham the founder of Y-Combinator, another highly influential organisation for startups, particularly those in an embryonic phase. I think it’s entirely reasonable to assume that many new companies will be modelled on Coinbase’s mantra going forward.

So could this be a new surge of rational control emanating from Silicon Valley? We shall have to wait and see. But whatever the outcome, there is definitely one company breaking ranks by asking their staff to leave their values at the door, and subscribe to that old adage of not talking religion or politics at work.

Daniel Bower

Blogging about platform regulation: algorithms, interoperability, kill zones as well as other bits and bobs. Read about my research, or read more about me.