I just finished reading Triumph of the City by Edward Glaeser as part of my holiday reading list. It's one of the Zappos Library List recommendations on strategy. You might be wondering: Why would Zappos recommend a book on how cities are organized to inform a business' strategy? Brian Robertson actually gives us the answer in his book, Holacracy. The first time Brian met Tony Hsieh at a conference in 2012, Tony commented that whenever a business acquires a new employee, the marginal productivity of the company tends to go down. In contrast, whenever a city acquires a new citizen, the marginal productivity of the city tends to go up. Why is this? And how can companies be structured more like cities to make people more productive rather than less by joining the company?
Glaeser offers a deceptively simple answer: Cities are hotbeds of human collaboration, both for generating ideas (along the lines of Matt Ridley's argument that progress comes from ideas having sex) and producing things (e.g. building new products and starting companies). Cities succeed when they provide more opportunities for collaboration in the right ways, and fail when they stop being centers for collaboration. The same can and ought to be said for businesses: the more successfully companies foster collaboration to produce ideas and things, the more successful they will be in general. However, there is one critical difference between cities and companies: companies have a particular goal they are striving to achieve and align all activity towards. Cities have no overarching goal that they are directing all action toward. Effectively applying lessons from the success of cities to companies will require important adjustments around this limit, but there are important lessons to derive from cities still.
Here are my top 5 take-aways from Glaeser's book:
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