An Ideal Organization

The questions

1. Why do jobs and promotions so often go by who you know? Can the way an organization is built fix this, without just hoping for better bosses?
2. What do other ways of running a company fix, and what do they miss?
3. What change would make fairness and respect part of the design, not just words in a mission statement? And what could go wrong?

What the paper finds

Five other models, one shared gap

Most companies are run mainly to make money for their shareholders, the people who own shares in them. The paper looks at five alternatives.

• Co-operatives. A co-operative is a business owned and run by its members. At Mondragon, the best-known worker co-operative, many companies have members with a vote and non-members without one.
• Employee ownership. The John Lewis Partnership in the United Kingdom is owned in trust for its staff, who share the profits. But it cannot easily raise money from outside investors without weakening the model.
• The B Corp label. This is a voluntary certificate that a company serves the public, not only its owners. Nespresso (owned by Nestlé) and Innocent Drinks (mostly owned by Coca-Cola) kept the label, which drew public criticism.
• Workers on the board, German style. German law gives workers seats on the board that oversees managers. The results are mixed, and some firms change their legal form to avoid the rule.
• Steward ownership. Here a company is set up so that no owner can take its profits as personal wealth. Bosch and Patagonia (since 2022) are examples. It decides who can take money out, not how people are placed in jobs.

Each model changes who owns the company, who gets a say, or what it promises. None fixes the basic problem. People still get placed by connections, by degrees that reflect their background, by years served, or by interview skill.

One change, three gains

• Fair opportunity. Jobs go to people who have shown they can do the work.
• A better-run organization. The right person in the right job gets more done. That serves the organization's own interest.
• Respect and belonging. People who feel they belong and can grow do better work. The paper points to long-running research on motivation.

The three feed each other. Good placement makes work go better. That, plus a real chance to move up, builds a culture of respect. And that culture makes the record of ability more accurate.

Why this is possible now

In the past, ability was hard to measure. So employers leaned on résumés, casual interviews, degrees and years of service. Research cited in the paper shows that tests using real work samples predict performance much better than a casual interview.

Today, technology makes it practical to keep a running record of what a person can do. It could cover many settings and many years, even starting in school. At best, a job could then arrive as an invitation.

The paper says such a record needs strict rules. People must agree to it at each stage. They must be able to own it, correct it and take it with them. A hard patch early in life must not count against them forever. The EU Artificial Intelligence Act (2024) already calls systems that score, hire or promote workers "high-risk."

Four companies, four lessons

The paper uses four companies as warning examples, not as models to copy. What is known comes mostly from news reports, former staff and the companies.

Two worries, one answer

One worry is that people will "game" whatever is measured. Another is that fair measuring can still treat a head start as if it were earned. The paper's answer is that real work on the job keeps correcting the record. It is clear that this fixes the measuring problem, not unequal starting points.

What it proposes

Place people in jobs by the ability they have shown, using a running record. Build it one step at a time. Four safeguards, taken from an earlier paper in the series, keep it honest:

1. An independent judge. A separate body measures ability against what the job needs. It gains nothing from the result.
2. Open methods. The rules, and how much each one counts, are published. There is no mystery score.
3. A safe way to raise problems. Anyone can flag a concern without waiting for top bosses to notice.
4. Checks from below. The people inside the system are the best sign of whether it works.

The same safeguards appeared in that earlier paper, about holding public power to account. It calls on founders, managers, board members, HR staff and team leads to act. The hardest step, it says, is for insiders to put their own promotions through the same process.

To show how this could feel, the paper follows "Marcus," a 28-year-old from a modest background. No one had coached him for job interviews, and he did poorly in them. Here, he is hired through his record. He makes a big mistake in his second month. It counts for less as his later work builds up. Years later he disputes an assessment through the flagging process, and he is proved right. Marcus is invented by the author to illustrate the idea. He is not a real person.

Why this matters to you

• Who gets the job. Have you ever lost a job to someone's friend? The paper offers a way to make what you can do count more than who you know.
• Room to recover. In this design, an early mistake fades as your later work shows more. A rough start should not hold you back for good.
• Rights over your own record. If employers keep records of ability, the paper says you should consent to it. You should own your record, fix errors and take it with you.
• Respect at work. Feeling respected and able to grow is not a perk, the paper argues. It is part of what makes work go well.

What the paper does not claim

• It is not risk-free. Gaming is reduced, not removed. Bias and abuse of power are handled only if the judges are truly independent. The risk of insiders taking over the judging body is still open.
• It does not fix unequal starts. That needs a basic floor of support across society, as argued in the first paper in the series.
• It does not promise higher pay. In wealthy countries since the 1980s, pay has often lagged behind gains in output. The paper offers no plan of its own to share those gains.
• Fair process, not equal results. It does not promise everyone the same outcome, or propose building it all at once.