Leverage Weekly #50 - Preparing for 2025
tl;dr - Organizations are machines made from people
At Leverage, we believe that organizations are machines—a special type of machine made out of people. In a vague, metaphorical sense, this may seem obvious. Organizations have inputs and outputs, they have parts and function in a particular way. So this may seem unsurprising and unremarkable.
When we say “organizations are machines,” however, we mean this in a much more literal sense. Organizations are artifacts. They are purposefully constructed. They have interconnected parts; an “org chart” is a partial wiring diagram. With regular machines, when parts are misplaced or broken, their function degrades and the machine stops working. The same, we maintain, is true for organizations.
The biggest difference between an organization, for instance, and a more usual machine, like a toaster, is that much of an organization is invisible. The toaster has a lever, heating coils, and a plug. You can see all of these parts, so you can tell just by looking whether something is a toaster. With organizations, you can see the people and many of the organization’s assets and outputs, but can you see its policies and practices? Can you see its culture?
It may be thought that organizations are simply groups of people, and that all of the corporate apparatus of titles, roles, policies, mission statements, and so forth are simply fluff that get in the way of doing real work. In fact, I used to think that as well. I have subsequently come to think, however, and Leverage as an organization now believes, that these things are not fluff. They’re the ghost in the machine without which the machine won’t work—which means they too are part of the machine.
Understanding this perspective, and why it matters for anyone running an organization of appreciable complexity, may be approached by looking at specific cases. Throughout 2025, in our Leverage Weekly series, I will be chronicling Leverage’s activities and giving illustrations of what we mean by “organizations are machines made of people,” “culture is the ghost in the machine,” and so forth. It will be possible to see the theory of organizations in action with concrete decisions and activities each week.
Of course, none of this matters if Leverage’s organizational philosophy does not yield notable effects. We could store it alongside all of the other organizational philosophies on a shelf somewhere. But if we are able to produce notable effects—like we did in 2024—one likely cause is our culture. Some will say it is luck, others will say it was a particular person’s genius, but our actual view, which will be expressed in this and later essays, is that it is not luck and not idiosyncratic. We think it is replicable and that others should be trying to replicate it.
Even if the organizational philosophy is correct, or even merely “useful,” it will not make sense for organizations to do exactly what Leverage does. Each organization is a machine uniquely suited to its task and starts from a different foundation. Different wiring and personnel choices will be called for. Rather, by seeing one example of organizational design and construction, performed live, with commentary, it may be possible to abstract lessons for use in other organizations.
If successful, the series of essays will illustrate that the design of organizations is not merely an art, but a science, in the sense that it can be reduced to rules and practices that can be mastered with only a touch of inspiration. With a science of organization construction in hand, it is then possible to imagine the revitalization of many of the world’s organizations and the founding of many new ones. This will leave room for ever greater achievements of organizational design, which may arise from art, or science, or both in combination.
Organizations are machines made from people.
This was a short week at Leverage. The team had off for the national holiday and Oliver and Melinda took Friday off as CTO, compensating for travel days from last week. We mostly focused on reconfiguring the institute for 2025. This involved a variety of seemingly small and mundane changes that are actually part of org design and that we expect to have a very large impact going forward. These are in addition to the many plans and changes adopted at the Leverage Annual Retreat last week in Palm Springs.
A sample of changes:
Leverage Newsletters — Newsletters had ground to a halt, with us skipping October, November, and December. We will be resuming newsletters next week; they are also being moved from email to Substack.
Social Media Hour — The institute’s social media engagement has been spotty, to say the least. Last year, from September through December, we had an hour set aside, on Thursday, to encourage us, as a team, to post things to X, LinkedIn, and Facebook. This meeting has now been replaced by two meetings, Social Media (writing) and Social Media (publishing), on Friday and Monday respectively.
Chief Culture Officer — At the retreat, it was decided that Oliver will be promoted from Head of Culture to Chief Culture Officer. This decision will be ratified at the next meet of the board at the end of Q1.
Some of the new plans and changes took only a few minutes to decide. Others have taken hours of discussion, in some cases following months of thought. We think that time is worthwhile, however, and this is where the view that “organizations are machines” comes in. Would you spend hours discussing whether a team member should be “Head of Culture” or “Chief Culture Officer”? What about whether your newsletter, which you know no one reads, should be sent out through email or written on Substack?
We think these questions are important because without the right answers, parts of the organization are in the wrong place. If things are configured incorrectly, they won’t work. To say “these things don’t matter” is to deny the reality of the relevant things as part of the organization, to take away part of the ghost in the machine. That’s not to say that things like roles, titles, mission statements, company values, choice of company font, names of recurring meetings, and the like should always be prioritized. It is to say, however, that they should often be prioritized, at least when you are running a large or complex organization.
Join us on our journey, learn about the Leverage organizational philosophy, and witness what we hope will be the surprising combination of corporate org-babble and shocking brilliance in action.