The Scale Illusion

Pondering Nature's Boundaries

Does it scale?

How often have you heard this question used to dismiss a business plan or pre-empt yet another proposal to solve society’s problems?

Perhaps that’s the wrong question.

The better question may be: What is the most effective scale for addressing a particular problem?

Or more fundamentally: Are large systems trying to do things that only small systems can?

Nature has an opinion, however, and rarely rewards growth without imposing a cost.

My barber’s name is Steve. Steve earns a fine living at his modest establishment, charmingly named “Steve’s Barber Shop.” When I walk in, I take a seat because there are usually one or two customers ahead of me. I listen to the discussion about the outlook for Rock Island High’s sporting teams. When my turn comes, Steve says, “Number three all the way around?” though he already knows the answer. Between thirty and forty-five minutes after I arrive, I leave with my hair cut and fifteen fewer dollars in my pocket - ten for the haircut and five for Steve.

Pondering what would be gained if Steve opened a new location, I wonder: Would Steve be better off? Would my experience be better or worse?

My wife and I belong to a small Church. Our staff knocks on the doors of other establishments in their neighborhood and asks: Do you need anything we can help with? The answer is “yes.” The hospital could use a place for their school-age children during teacher’s in-service days. The school could use food assistance for families they know are deficient. So, our Church provides in-service Play and Pray; and Green Bags of food provisions for those families. The Church members provide the effort and funds out of their own pockets.

Pondering what would be gained if our Church decided to do that for the whole city, or nation-wide. Would we be able to accomplish this? Would the families we currently serve be better served?

Of course, some enterprises need to be big. Railroads and airports wouldn’t work as family businesses where the oldest child becomes the President and the second child becomes the Accountant.

The point is, scale has advantages where it has advantages. And that’s not everywhere.

Yet in modern society, we seldom ask whether a problem has an optimal scale. We ask only whether it can be made larger. If the answer is, “No, it doesn’t scale,” we frequently discard the idea and pursue something more ambitious. The result is often a solution that reaches more people while serving each of them less effectively. The hazard is that often, as the larger, less effective solution grows, it can actually eat the smaller, more effective ones. This makes things worse.

In 1980, most Americans had “their doctor.” Now, most Americans belong to a healthcare system. The system possesses vastly more resources and capabilities. Yet patients who have experienced both, my wife and I included, would argue that something important was lost. Their doctor knew them. Their inquiries about your health had the context of inherently knowing your family and occupational circumstances. The healthcare system knows their MyChart. That comes with a 15-fold cost increase. Perhaps the benefits of diagnostics, longevity, and pharmacology make it worth the cost. But it is certainly worth the question.

My wife and I are lucky. We have both. But we pay extra, a lot extra, to have access to a doctor who knows us. A lot of people do, if they have the means. But why would they, unless something was lost in the transition? Did the healthcare system eat the family doctor?

And if so, are we better off for it having done so?

I suggest that personal service, charity, and healthcare share a common denominator that is either overlooked or misunderstood. They work best when the people providing the service possess intimate knowledge of the people they serve, and when both have a natural stake in the relationship. This raises an interesting question. If intimate knowledge and mutual investment are important ingredients of effectiveness, how many such relationships can a human being realistically maintain? At what point do the costs of scale exceed the benefits of intimacy?

It can’t be boundless.

Nature, as mentioned earlier, is stubbornly possessive of her limitations. Anthropologist Robin Dunbar famously suggested that human beings can maintain roughly 150 meaningful social relationships. Whether the number is exactly right hardly matters. The important observation is that there appears to be a number at all, and it’s not millions, or even thousands.

This passes my smell test. During my professional career, I recall recognizing that once the company I led exceeded roughly 200 employees, it became substantially more difficult to manage. Structure increasingly served my purposes because I no longer knew many critical employees personally. I didn’t have the range. For the record, those structures were probably worth it. Factory automation is much different than cutting hair.

Structure is what we invent when our scale exceeds our capacity to manage relationships. When our enterprises lack effectiveness for whatever reason, our first reaction is rarely if ever to make it smaller. It is to apply more structure. This inclination may often ignore a natural boundary that should also be considered, but rarely is. Whenever we impose structure to replace familiarity, perhaps we’re answering the wrong question…

The right question, I think, is this: “What is the most effective scale for addressing this problem?”

It’s hard to step backwards. Maybe impossible. But I wonder. If we could design again some of the institutions that now shape our society, and this question were considered at inception, would we have done anything differently? Healthcare? Education? Poverty? Or, for that matter, the electric grid?

Would we have chosen the same scale? Or would we have discovered that some things work best when they remain closer to the people they serve?

There are very few charitable dollars spent better than those my wife and I provide to our Church for its local endeavors. We know the people involved. They know the people being served. The needs are visible. The outcomes are visible.

Likewise, the informed discussion of sports at Steve’s - where the athletes themselves may occasionally be getting their hair cut - has a depth that simply cannot be replicated by twelve televisions tuned to sports channels at a national franchise, where my haircut costs three times as much.

Neither example proves that bigger is worse. They simply remind me that some things derive their value from being small.

But to extend the metaphor to the ridiculous, if bigger is automatically better, I should probably maximize my weight gain. I look forward to discussing this with my doctor…