Chapter 29. Black Markets Are Not Efficient

But They Reveal How Things Actually Get Done

I got anythin’ you need, bro
I got anythin’ you need, bro

A common complaint about large organizations is that they are slow and mired in processes that are designed to exert control (Chapter 27) as opposed to supporting people in getting their work done quickly. For example, I used to be allowed to make technical decisions involving tens of millions of dollars, but I had to obtain management approval to purchase a $200 plane ticket. By the time I got the approval, often the fare had increased.

Most organizations consider such processes as crucial to keeping the organization running smoothly. “What would happen if everyone did what they wanted?” is the common justification. Most organizations never dare to find out, not because they fear chaos and mayhem, but because they fear that everything will be fine, and the people creating and administering the processes will no longer be needed.

Black Markets to the Rescue

Ironically, beneath the covers of law and order, such organizations are intrinsically aware that their processes hinder progress. That’s why these organizations tolerate a “black market” where things get done quickly and informally without following the self-imposed rules. Such black markets often take the innocuous form of needing to “know who to talk to” to get something done quickly. You need a server urgently? ...

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