Andrew Carnegie is credited with inventing vertical integration, a type of management control that condensed multiple steps of supply chain into one owner, allowing for more control over the production of the output as well as a head-on confrontation of the "hold-up problem" in which case production halts due to delays at one step of the process. After all, aren't the worries of a "hold-up" eliminated when in order to hurry along the production of a book all you have to do as a book designer is go next door to yell at the people copy-editing to tell them to hurry up so you don't have to wait any longer for the final version of the text?
However, ideas evolve, and so, naturally, vertical integration has also gone through iterations and modifications as new types of organizational needs have come to be.
In my experience working with and observing non-profit organizations, I believe that I have identified two such iterations of vertical integration or the accumulation of multiple steps of production into one organization for the sake of efficiency.
I present to you...
dot integration
and
funnel integration
dot integration is as it sounds: concentrated in one point. Non-profit organizations are as they are classified to be, non-profit, not-for-profit, and such, are often looking for ways to cut costs and increase efficiency. So, for these organizations, vertical integration makes sense. Keeping processes of production at home may allow for reduced spending; one could imagine that a researcher who wrote one publication may be asked to copy-edit another's report, for example. However, when this gets brought to an extreme, I believe the management control configuration looks more like a dot.
Example: A research assistant might double as a receptionist because she can work anywhere in the office as long as she has a computer with Stata and Microsoft Excel and also triple as a tech assistant because she can Google quick computer fixes while managing the internship program.
funnel integration is linked more to the movement of "funneling" something from a wide opening into a tiny stream. This has more to do with executive-level management than anything else. For the sake of consistency and quality control, it makes sense to have the head honchos of an organization keep their eye on overall operations. It keeps things moving and allows for a group to present a unified image.
But when I say "funnel" I don't mean fine sand passing through a delicate hourglass -- what I want you to visualize is trying to get fruit salad through a funnel that was designed for use exclusively with liquid chocolate in order to put pencil-thin detailing on top of a cupcake. That is funnel integration.
How does this apply to non-profit organizations and start-ups? Well, with these more intimate institutions and projects, the leader or founder is clearly going to be more emotionally attached to the lower-level operations of her or his staff, resulting in some levels of micromanagement and meddling. The founder of a small tech start-up might feel particularly sensitive about the organization of her new office's supply room though that's technically the job of the office manager. That's natural. But again, take it to the extreme and you get funnel integration.
Example: A president of a small research organization may require every single publication or product created by his highly-qualified and educated research team to be reviewed, critiqued, edited, designed, and reviewed four more times by him before being released. On top of this, he is peculiar about what kind of key rings are used for the office bathroom keys, how many rings you allow the phone to ring before you pick up, and how long it takes for you to press the buzzer when he arrives at the front door even though he has his own key.
Here are examples of the potential for disaster that lies behind each of these ridiculously stupid management control structures that every single freaking non-profit in DC ends up using because the entire city is populated with ridiculously educated, perfectionist, workaholic, unsympathetic, cold, jaded graduate degree-holders, and because the system is so much THE system that no one dares to try and take a crack at reinventing it:
dot integration disaster:
The research assistant, being the only research support staff member for her tiny organization is responsible for fact-checking and formatting almost all of the publications that are produced in a given month. However, during this month, she is also responsible for hiring the interns that will become the research support during the academic year, and the only way she can sanely finish her research assistance tasks is by getting interns, but it's her job to get the interns and she doesn't have time to do that because she has to help with research-related tasks. During this time, the network crashes and everyone freaks the fuck out because all their work is now inaccessible, and the research assistant can't work on hiring interns because all her time is taken up by her research assignments, but she can't do them now because the network is down, but she's the one responsible for fixing the tech issues and can't because really she's not a techie and her only response to tech problems is to Google things but the network is down. AND THEN THE ORGANIZATION TANKS.
funnel integration disaster:
The president will scream at you and harangue you if you do not show him everything that is to pass through the organization's doors and be released to the public because his expertise and his self-identified perfect word choice are crucial to add that "sparkle" to each publication. Therefore, all blog posts, statements, press releases, correspondences, newsletters, research briefs, reports, event flyers, internship descriptions, blurbs, website text, in-office memos, staff contact lists, blah BLAH blahhhhhh must be read by him. And every single piece that is reviewed will go through approximately 15 iterations and so every promised product to a funder or outside organization will be late. In order to keep the organization going we need to keep a good reputation with funders. But late reports are viewed poorly. But your president has to read everything. So everything is late. So then you don't get funding. But everything is still late and eventually you get so little funding you can't produce anything.
AND THEN THE ORGANIZATION TANKS.
Theorizing complete. Good night.
