Organisational Friction
How structures, processes, and cultures create friction in organisations — and what to do about it.
The Core Argument
Organisational friction is built into the design of organisations. It is created by structures, processes, and cultures that were designed for a different era.
Most organisations were designed for the industrial era. They are hierarchical, siloed, and process-heavy. They value consistency over adaptability, and compliance over judgment.
In the Judgment Economy, these designs create friction. They slow decision-making, distort communication, and undermine trust. They make it harder to apply good judgment — and easier to apply poor judgment.
Reducing organisational friction requires redesigning the organisation itself.
Sources of Organisational Friction
Where organisational friction comes from.
Hierarchy
Hierarchies create bottlenecks. Decisions must travel up and down the chain of command. This slows things down and distorts information along the way.
Silos
Silos divide organisations into isolated units. Information does not flow between them. People work in isolation. Collaboration is difficult.
Bureaucracy
Bureaucracy is friction in written form. It is the rules, processes, and procedures that govern how work gets done. Too much bureaucracy creates friction.
Culture
Culture is the invisible friction. It is the norms, values, and beliefs that shape how people think and act. A culture of fear, blame, or complacency creates friction.
Misaligned incentives
Incentives create friction when they are misaligned with the goals of the organisation. People pursue their own interests, not the collective good.
The Acacia perspective:
These sources of friction are not separate. They reinforce each other. Hierarchy creates silos. Silos create bureaucracy. Bureaucracy creates culture. Culture creates misaligned incentives. To reduce friction, we must address all of them.
The Cost of Organisational Friction
What organisational friction costs.
Slower decisions
Friction slows decisions. It creates delays and bottlenecks. In a fast-moving world, this is a competitive disadvantage.
Worse decisions
Friction distorts decisions. It creates noise and bias. It makes it harder to see clearly and to think carefully.
Lower engagement
Friction frustrates people. It makes work harder and less satisfying. It leads to lower engagement and higher turnover.
Lost trust
Friction erodes trust. When people experience friction, they lose confidence in the organisation and in each other.
Key insight:
The cost of organisational friction is not just inefficiency. It is poor decisions, disengaged people, and lost trust. These are existential threats in the Judgment Economy.
Reducing Organisational Friction
How to redesign organisations for the Judgment Economy.
Flatten hierarchy
Reduce the number of layers. Push decision-making down. Trust people to make decisions without endless approvals.
Break down silos
Create cross-functional teams. Encourage collaboration across departments. Make information flow freely.
Simplify processes
Reduce unnecessary steps. Eliminate redundant approvals. Focus on what adds value.
Shift culture
Create a culture of trust and learning. Encourage dissent and debate. Reward good judgment, not just compliance.
Align incentives
Design incentives that reward good judgment and long-term value creation. Ensure that everyone is working towards the same goals.
The Acacia perspective:
Reducing organisational friction is not a one-time project. It is a continuous process of redesign and adaptation. Organisations that succeed in the Judgment Economy will be those that make friction reduction a core capability.
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