Hierarchy

If you want to win at the game of bureaucracy, you need to know the enemy.

If we are to understand bureaucracy enough to be able to predict behavior with accuracy, then we need to understand the forces that motivate the people who populate it. A model is only as good as the predictions it makes. Bad models don’t hit the target too often; good models can guide us in dealing with these institutions.

One attempt to understand what drives people generally is Maslow’s Hierarchy of Needs.

“According to Maslow (1943, 1954), human needs were arranged in a hierarchy, with physiological (survival) needs at the bottom, and the more creative and intellectually oriented ‘self-actualization’ needs at the top.

“Maslow argued that survival needs must be satisfied before the individual can satisfy the higher needs. The higher up the hierarchy, the more difficult it is to satisfy the needs associated with that stage, because of the interpersonal and environmental barriers that inevitably frustrate us.

“Higher needs become increasingly psychological and long-term rather than physiological and short-term, as in the lower survival-related needs.”

Maslow simplified human needs into five ordered categories. At the bottom, we have the immediate requirements for human life including things like air, food, water, sleep, etc. As we move higher up the ladder, these exigencies become longer term. Also, we migrate from the physical to the psychological.

1.     “Physiological needs are biological requirements for human survival, e.g., air, food, drink, shelter, clothing, warmth, sex, and sleep.

2.     Safety needs –  people want to experience order, predictability, and control in their lives.

3.     Love and belongingness needs  refers to a human emotional need for interpersonal relationships, affiliating, connectedness, and being part of a group.

4.     Esteem needs are the fourth level in Maslow’s hierarchy and include self-worth, accomplishment, and respect.

5.     Self-actualization needs are the highest level in Maslow’s hierarchy, and refer to the realization of a person’s potential, self-fulfillment, seeking personal growth, and peak experiences.”

Is there a parallel hierarchy of needs for the bureaucrat? What are his immediate requirements? What are his aspirations? Just as we move from short-term to long-term planning horizon with Maslow, we could do so in our context. Instead of moving from physical to the psychological, perhaps we should think of a spectrum from the local to the global, from the personal to the external, and from the necessary to the aspirational.

We could posit the following:

1.     Control over some function (however small) represents the requirement of being a member of a bureaucratic organization with some sort of influence or responsibility of one dimension of it, e.g., the military or some other functional organization. Even at the lowest level, there must be some delegated authority to execute.

2.     Status (or rank) is a way of measuring the degree of relative influence within the organization; in a bureaucracy, everyone is conscious of their rank and of those around them.

3.     Credit for success and the ability to shift blame to others

4.     Power describes the extent of absolute influence the individual enjoys within the organization, including their interpersonal leverage, to contribute to the overall outcome; the more power one has, the more people (and functions) they control and the higher rank they enjoy.

5.     Acclaim in the form of a widespread perception of virtue and excellence is the ultimate external manifestation of the bureaucrat’s fulfillment

The functionary at the Department of Motor Vehicles has control over whether to approve your driver’s license renewal but it is limited. This is a necessary condition, as required as food or water. It’s table stakes. As she is promoted into supervisory and then managerial positions, her status increases. Her subordinates understand where they sit in the organization chart with respect to her.

In a private organization, management is accountable for outcomes. It is said that a hallmark of leadership is the willingness to give others who work for you the credit when things go well and to take responsibility when they don’t. In bureaucracy, this is inverted. A key step on the way up our hierarchy of needs is the ability to sidestep bad events, ideally exploiting them to accelerate one’s path up the tree by pinning the blame on your competitors in the zero-sum politics of the organization.

Acquiring rank and evading disapprobation open up the possibility of power: being in charge of massive resources to effect wholesale change. In government, we can think of regulators stopping merger deals or forcing the breakup of large businesses or ending by regulatory fiat the use of fossil fuels in the generation of electricity. It can mean having the discretion to dictate which laws to enforce and which to ignore.

Finally, the full realization of bureaucratic elysian joy is acclaim and the fruits it bears: the knowledge that the people see you as important and virtuous and caring and intelligent. It is most important that you are seen as brilliant. You may not be; chances are you are middling. But if you play your cards right, you will be seen as a pioneer or a genius. You will receive accolades and medals. You will earn large riches on your retirement from the bureaucracy, as firms recruit your wisdom (and, more likely, your acclaim-enhanced connections) for their boards. Perhaps some people will give you lucrative deals with no expectation of value in return, just to be part of your circle, say with an outsized book or streaming deal.

All of this might sound academic and it probably is. But it can be useful for predicting the behavior of organizations if applied well.

For example, in the Spring of 2024, university campuses were infected with large-scale protests after the Israeli military intervention in the Gaza strip. Activists disrupted the regular cadence of the schools, destroyed property, and, in some cases, threatened students with whom they disagreed. A private sector observer with little knowledge of these institutions and their individual cultures might have predicted quick action after a brief attempt at diplomatic engagement. Instead, the public looked on as these students (and possibly some outside muckrakers) tried to see how much they could get away with, no matter how ridiculous. Demanding at a contrived press conference that DoorDash delivery drivers be admitted to occupied buildings was a nice touch, made without any sense of apparent irony, for one.

According to my theory, the principal explanatory variable for predicting the behavior of the presidents at the Ivy League universities would be Acclaim. Given the political biases of these institutions (and leadership’s history of proselytizing in sympathy), their primary orientation would have been to maintain the image of their personal virtue and sympathy for the protestors. For public universities, leadership would have been more driven by Power to focus on the outcomes the state and their students would demand.

One attends the Ivy League to purchase status; one studies at a public university to learn.

Companies should think about how to develop models of their regulators, similar to our version of the bureaucrat’s hierarchy of needs. For example, does the head of that agency really think you’re harming the consumer or do they want to use their power to acquire acclaim with the right constituencies, indifferent to winning or losing in court? Regulation is a game and you cannot win unless you know how the other person thinks.

One other benefit of this model is that it helps us categorize organizations as bureaucratic or not. Are there pockets within your organization that seem more interested in accumulating power for themselves than in contributing to the bottom line?