Danny Rehr
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Just Be Nice: A Lesson In Path Dependenc ...

Just Be Nice: A Lesson In Path Dependency

Jun 20, 2022

Photo by Maksim Shutov on Unsplash.

In a café to write my last post, Why I Journal About Work, I hopped in line to get another cup of coffee. I noticed a lady sitting by herself. It turned out that she was waiting for the woman who arrived in line behind me.

"It's a day off from work, and I'm in no rush. Would you like to jump ahead of me?"

Thankful, the lady did so.

Do you know what?

She bought the next person in line a coffee. Wow!

For those unfamiliar with coffee café culture, this happens more often than you might think.

Café Culture

Photo by Yosua Sinaga on Unsplash.

Making Sense of Organizational Culture is a recent post. In it, I shared Clayton M. Christensen and Kirsten Shu's definition of culture:

Culture is a unique characteristic of any organization....organizational culture affects and regulates the way members of the organization think, feel and act within the framework of that organization. [1]

Now obviously being a customer in a café does not make me part of an organization in the formal sense. It does, though, make me part of a human organization. Like all others there that day, I was a customer of that café, not another.

To be the recipient of a next-in-line drink is special every time.

In kind, I offered the next person in line the same gesture. Across cafés on both the east and west coasts, I've seen the wave of offers pass further back into line. It's pretty amazing, especially considering that the next person's drink may be more expensive than the one you intended for yourself.

Grateful though I was, and with meaningful honesty here, it was my follow-on gesture that further galvanized the café's [customer] culture. The theory casually referenced here is path dependency.

Path Dependency

Path dependency "explains the continued use of a product or practice based on historical preference or use." There is a lot more to the concept, but the basic premise is just that. "Path dependency occurs because it is often easier or more cost-effective to continue along an already set path than to create an entirely new one." [2] As is suggested in both my coffee café example and the preceding definition, there's a negative undercurrent associated with the term.

That is cost (or expense).

Cost to the café buyer is a two-fold risk.

First, there's the humanity of it all. Not wanting to upset the goodwill, the risk ripples on down the line.

Second, if the expense is higher than that which would have been spent buying one's own drink, there's loss associated with exhibiting the expected behavior, or 'locking-in', as is said with path dependency.

Breaking Ergodicity

OK, calm down...

I have just introduced a term, path dependency, and now I've got another in big, bold letters.

Yes, the above section header is slightly intense, and maybe even intimidating. Breaking ergodicity, or 'non-ergodicity', sounds like the name of a furniture maker turned rebellious rock band. 🤘 Far from it.

Photo by Felipe Randolfi on Unsplash.

Non-ergodic is a more technical term for strong path dependency. In lay terms, it has to do with 3 matters, the first being most important:

  • Initial condition(s), e.g. was the car door locked or not before the car was stolen?

  • Averages over time and across systems, i.e. 'lock-in' or following the pattern or path; e.g. average number of a certain model car has been stolen across major metropolitan areas; and

  • Follow-on randomness, and measuring the application of variability upon a problem to be solved, e.g. Did the car's color, or the weather that day, or the day of the week, or the amount of fuel left in the vehicle, etc. have anything to do with the number of thefts?

My metaphor of car theft aside, these 3 bullets explain almost 3-Dimensionally how organizational culture "affects and regulates the way members of the organization think, feel and act."

Strong Path Dependency: An Example

I pulled a Mark Meckler quote from my Making Sense of Organizational Culture post to reuse here. A professor of Strategy, Management of Technology and Innovation, and Cross-Cultural Management at the University of Portland, he put forward, "a key is that culture is an organic, relatively open system, so it grows rather than gets built." [3]

This explains how people who do not know one another, and who are transient customers in a café, no less, establish and reproduce behavior. Moreover and even at the expense of the buyer, path dependency ensures the culture's initial condition reinforces itself over time and across individuals. Further still, this café culture resonates across cafés in different states, even.

That one instance of path dependency creates assumptions and expectations. However random and in whichever café, it's OK--even encouraged once it first happens--to buy the next person in line a drink out of goodwill.

Weak Path Dependency

If non-ergodic describes strong path dependency, then what is weak path dependency? Researcher, Alex Adamou, describes it in part:

...as we proceed along a trajectory we eventually forget about the initial condition. [4]

Remember the goodwill associated with that first purchase for the next person in line. Wow! Someone bought me a drink. I'm going to do the same to share that same feeling I now have.

At some point, the goodwill comes to an end. Locking-in to the idea of buying the next person in line a drink stops when there's a refusal to the gesture.

"No thank you. You don't have to buy my drink."

Path dependency ends.

Path Dependency and Organizational Culture

Photo by Maksim Shutov on Unsplash.

Path dependency is a consideration more so in product-to-market penetration, mathematics, and economics than it is at explaining organizational culture. There's nothing wrong with a multidisciplinary take on the concept, though.

On one hand, strong path dependency holds true through some rigidity; contrastingly, weak path dependency loses steam over time.

We've all seen that happen with initiatives at work. Some stick. Others don't.

What I have not yet revealed is that the person behind me that day refused my gesture. Thus, my café culture example explains both strong and weak path dependency.

  • Initial condition: A lady bought me a coffee.

  • Average over time across systems: I followed suit by offering to the next in line.

  • Randomness, and measuring the application of variability upon a problem to be solved: Guy behind me refused. He wasn't locked-in. Path dependency ended right there.

    • Was he not aware of the café culture?

    • Was he uninspired by what he'd observed before him?

    • Did he not wish to put his expense upon someone else?

    • Did he just not want to bother with it all, including turning around and buying the person behind him a drink?

I do not know.

What I do know is this. Path dependency can be a force for culture development in both the positive and negative sense, strong or weak path dependency notwithstanding.

To use the phrase again, we've all seen it.

The status quo is a terrific initial condition. 'The way we do things around here' codifies behavior. For repeatable tasks, say, this can be essential to organizational effectiveness.

Then again, the assumed manner to solve problems may stop supporting the organization's changing strategy. Tasks and procedures thereby need to change. At that time, the initial condition, or status quo, becomes a liability. That initial condition serves as a 360° pivot point for cultural decay. Over time, the average negative impact erodes alignment across departments and teams, i.e. systems. Problem identification, or measuring the application of variability (upon tasks, procedures, etc.) becomes less accurate. Value provisions become ever more expensive in budget, time, effort and more as the organization's cumbersome business processes must now overcome breakdowns. This is all because of strong path dependency in the face of advisable deference to weak path dependency.

Examples of Strong and Weak Path Dependencies

Photo by Johannes Plenio on Unsplash.

Indeed, there are cases for electing strong or weak path dependency or both as determined by the situation at hand and decisions' impacts over time. Here are just a few examples:

  • Training New Competencies (strong) - Taking the time to train is less efficient than hiring on someone who already knows. The additional cost of talent acquisition, compensation, and learning curve with regard to fully on-boarding and acclimating that individual gives pause to simply hiring on new talent.

  • Fast Prototyping (weak) - 'Failing fast' is a notable concept in product development and generating new ideas and plans. It essentially means try lots of things, simply, and accept failure until one idea works or proves out. Taking time or pouring in dollars toward matters arguably intended to fail could be more cost-effective and longer-term oriented than the short-term idea that seems to work well now. Immediate deficiencies and lagging drawbacks learned later may prove today's surefire idea wasn't so hot.

  • Crowdsourcing Ideas (both) - The management team is in place for a reason. Experience, tenure, education, competencies, and more give reason to this small group having control of operations. Openness and receipt of ideas from the staff may, albeit more cumbersomely, prove more useful than the sum of that managerial prowess. This makes no mention of staff members taking ownership, feeling a sense of belonging, taking pride, and exhibiting teamwork. Combining managerial and staff brainpower, though, is the best of both worlds.

Of course, many more examples exist.

The Long and Winding [Path]

In the way I've thought about them here, path dependencies make for interesting diagnostic and prescriptive tools. They may also describe scenarios in which culture is either/both a strength or a weakness that must be acknowledged. Operationally, perceiving strategy through the lens of path dependency may result is some creative, cost-effective, and efficient solutions to hard problems.

Maybe more important than anything. Path dependency could very well afford you your next cup of coffee. That's not a bad path to go down.

[1] Christensen, Clayton M., and Kirsten Shu. What Is an Organization's Culture?. Boston, MA. President and Fellows of Harvard College, 1999. Case Study.

[2] Banton, Caroline. "Path Dependency". Investopedia, 2021, https://www.investopedia.com/terms/p/path-dependency.asp.

[3] Meckler, Mark. Email to Danny Rehr. "Papers/Books On Org Culture?". 21 October 2021.

[4] London Mathematical Laboratory (via Ergodicity TV). What Is Ergodicity? - Alex Adamou. 2021, https://youtu.be/VCb2AMN87cg. Accessed 18 June 2022.

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