These aren’t mere gripes. They are evidence of a fundamental disconnect in incentives. Employees in market-facing roles know that if they fail to satisfy user needs, they’ll get fired by their customers. Corporate staffers, by contrast, can only be fired by their overlords, so that’s where their loyalties lie. Internal administrators suffer little or no penalty when they inflate costs, offer substandard services, or insist on compliance at any cost.

There’s a final threat to subtlety: bureaucrats abhor ambiguity. Their sense of order is offended by the idea that not every trade-off can be resolved once and for all. Uniformity is a virtue. Never mind that any universally applied policy will be wrong a significant percentage of the time—as when an across-the-board hiring freeze unfairly punishes a small but fast-growing unit, or a zealously enforced policy inconveniences a high-value customer. The alternative would be to grant those on the frontlines the freedom to optimize trade-offs locally, as circumstances dictate. To a bureaucrat, this is anathema, since it erodes “order.” How can you manage a large organization if people on the ground are free to do their own damn thing? We need to know what’s going on, and that’s possible only when everyone’s following the same script. This, as much as anything, explains why senior leaders favor uniform structures and uniformly applied policies—yes, they may be suboptimal, but they reduce the cognitive load on executive leaders. They make the world seem understandable to those at the top, and thereby help to preserve the illusion of control.

In many large organizations, the challenge is often diagnosed as internal. That is, the organization’s competitive problems may be much lighter than the obstacles imposed by its own outdated routines, bureaucracy, pools of entrenched interests, lack of cooperation across units, and plain-old bad management. Thus, the guiding policy lies in the realm of reorganization and renewal. And the set of coherent actions are changes in people, power, and procedures. In other cases the challenge may be building or deepening competitive advantage by pushing the frontiers of organizational capability.

The relationships with others essential to activities such as parenthood, education and research are valued for themselves, not just for their consequences. Most humans are good at detecting instrumentality – the false bonhomie of the used car salesman, the cynical hypocrisy of the vote-seeking politician – and are repelled by it. There is a difference between the firm that promotes the welfare of its employees because its executives care, and the firm that promotes the welfare of its employees because its finance department has calculated the net present value of reduced staff turnover. And employees can usually tell which is which.

Plenty of organisations have no formally identified central planning department, but the integration and optimisation function is performed by an informal network of System I managers. That’s perfectly possible, as long as they have made the mental leap understanding that from time to time they need to adjust their thinking to perform a coordination role for the benefit of the organisation. Stafford Beer occasionally seemed to suggest that this kind of informal internal networking could be the best way to create System 3, which was why a big lounge at head office with whisky and cigars was important.