What does the history of the railways have to teach us about Enterprise 2.0?


In this other post, Stewart Mader digs out the old McAfee-Davenport debate and concludes:

So Tom’s right — the absence of technology isn’t the only reason that organizations are hierarchical. The people in charge of those organizations organized them that way because it’s what they understood how to do. And Andrew’s right — today’s ubiquitous technologies that we use in all facets of our lives are different from the earlier tools that had a specific place and use.

I thought I would dig a little deeper and take a look at the history of the railways in the US for some insights into the history of these hierarchical structures we take for granted. These course materials from UC San Diego provide an overview of this history and they say:

The earliest railroads used the same simple form of business organization that almost all other businesses used at that time – the unified or entrepreneurial form of organization. This was the traditional owner-controlled facility in which the owner made the day-to-day operational decisions and set long term goals.


In the 1850s Daniel McCallum of the Erie Railroad perfected the operations department (responsible for moving trains and obtaining freight and traffic business) and devised the system of information flows using the telegraph. He was the first to clearly define the duties and responsibilities of the executive and administrative officers on a large railroad and to spell out the lines of authority and communication between the various officers of the road. Part of this scheme was a detailed system of information that flowed upward through the organization using the telegraph.

(Emphasis added)

I think technology has played a role in shaping organisational structure. However, the catalyst for change includes other managerial drivers, such as the need to manage scale (including a literal train wreck) and volumes of transactions, combined with the availability of an appropriate technology.

Considering Gartner is quoted as saying that “as much as 60% of an organization’s processes are unstructured – and probably also unmonitored, unmanaged, unknown and unruly” (hat tip to Sig) it sounds like we still haven’t quite solved that management challenge as perfectly as the org charts might suggest. Enter new social computing technologies that offer the chance to help bridge that last effectiveness gap.

The question is, are you going to wait for your own organisational train wreck before you do something about it?