Bottom-up vs. Top-down: Don’t put all your eggs in one basket

This is the 3rd post in this series. Here are posts 1 and 2.

In post 1 of this series, I explained what I think are the key differences between top-down and bottom-up organizations and why it’s helpful to think in those terms, rather than other common organization characterizations like government vs. private sector.

At the end of post 1, I listed three reasons why I think bottom-up systems work better than top-down. In Post 1, I elaborated on the first reason. In this post, I elaborate on the second: No single point of failure.

This has been conventional wisdom for a long-time and you may know it better as the phrase, Don’t put all your eggs in one basket.

Why? Because you might drop the basket. This sage advice helps reduce the risk of breaking all the eggs should you drop that basket.

We use this advice when investing. No matter how much homework we do on a company, there are no sure bets. Best not to bet everything on one company.

We consider the advice when planning careers. We train for one career path, but we know it could be automated or outsourced, so it’s best to have backups.

Sports teams try not to bank too much on a single player. Great players are good to have, but they can get injured.

Engineers try to avoid single points of failure when designing systems. Bridges are designed with redundant supports, so they won’t fall if a single support fails. Systems without single points of failure save lives.

Bottom-up systems do not have single points of failure. Baskets can be dropped in such systems. Eggs will be broken, but there are plenty of other baskets to go around.

Why is this good? Because failure happens and it happens more often than success. We live in a trial-and-error universe.

Capitalism is a good example of a bottom-up system. When one business fails, there are others to take its place. It doesn’t take down the whole system. We survived Enron’s collapse, for example. It was not ‘too big to fail’.

Local government is also a good example of a bottom-up system. Local governments can and do fail. Detroit is failing, but it’s not bringing down the whole system. There are thousands more cities, counties and townships. 

School districts don’t yet have a single point of failure. Failing school districts do not bring down the whole system.

Though, school districts have moved toward becoming more top-down over the past few decades as a small group of folks in DC use taxpayer dollars to encourage school districts to deliver on what the folks in DC think is a good education.

This has moved accountability away from parents toward a central point of failure, the ‘common core’ curriculum.

Of course, ‘too big to fail’ is code for ‘single point of failure.’ If it is true that some organization has become ‘too big to fail’ (though I don’t think that was the case in the financial crisis), we should spend more time thinking about how we let a single point of failure crawl into our lives, much the same way the common core curriculum is doing now.

Bottom-up systems are not painless. Failure can be painful. But, bottom-up systems deal with pain and failure better than top-down systems.

Attempting to avoid pain and failure is one reason people advocate for top-down systems. Unfortunately, they soon learn that was a fairy tale.

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Parasitic failure feedback loops

I recommend reading George Will’s, Detroit’s Death by Democracy.

He starts with an analogy that I agree with and have used before:

The ichneumon fly inserts an egg in a caterpillar, and the larva hatched from the egg, he said, “gnaws the inside of the caterpillar, and though at last it has devoured almost every part of it except the skin and intestines, carefully all this time avoids injuring the vital organs, as if aware that its own existence depends on that of the insect on which it preys!”

Government employees’ unions living parasitically on Detroit have been less aware than ichneumon larvae.

He provides us with a good axiom on feedback and failure:

When there is no penalty for failure, failures proliferate.

That’s something I encourage us to be aware of in all systems. What happens with failure? Is failure a negative reinforcing feedback (as it is in capitalism and sports) or a positive reinforcing feedback (as it is in government).

Then Will exposes the positive-reinforcing feedback loop:

Steven Rattner, who administered the bailout of part of the Detroit-based portion of America’s automobile industry, says, “Apart from voting in elections, the 700,000 remaining residents of the Motor City are no more responsible for Detroit’s problems than were the victims of Hurricane Sandy for theirs.” Congress, he says, should bail out Detroit because “America is just as much about aiding those less fortunate as it is about personal responsibility.”

There you have today’s liberalism: Human agency, hence responsibility, is denied. Apart from the pesky matter of “voting in elections” — apart from decades of voting to empower incompetents, scoundrels and criminals, and to mandate unionized rapacity — no one is responsible for anything.

Four broken feedbacks in public K-12 education

I believe that most problems are caused by broken feedback loops.  In 2009, I listed four broken feedback loops hurting quality in the public K-12 education system.   These include parent choice, teacher quality, grading and student discipline.

This weekend, the Wall Street Journal features basketball star Jalen Rose’s efforts to make a difference in education with his Leadership Academy charter school in Detroit.  Jalen addresses these feedback loops.

Parent choice:

“We didn’t cherry pick these kids,” says Mr. Rose. “They chose us,” he notes…

“There should be parental choice,” he says clearly. “Schools should be open. If it’s a public education, and the school in your district is poor-performing, you should be able to put your student or kid wherever you want.”

Choice could be relatively easily implemented, he says. “I’m a taxpaying citizen, right? So if I’m paying $4,000 worth of taxes and I don’t want my kid to go to this school, why can’t they give me my $4,000 and allow me to pick where I want to put my kids?”

Teacher quality:

His school also doesn’t have tenure for teachers. “I hate tenure. Tenure allows teachers to put their feet up on the desk and possibly have a job forever. That’s why I got turned on to charter schools. It’s a business model. Every employee and every teacher will be monitored by performance.”

Grading:

“This is college prep. We expect 90% to 100% to go on to college”

Student discipline:

Kids too: “We have a code of conduct here. If they act up, they’re suspended. They come back with a better attitude.”