I've seen that chart before, in some history of railroading. It was discovered some time back.
"McCallum therefore designed a system of hourly, daily, and monthly reports" Yes. He was also responsible for some basic business terminology, such as "division" and "section".
It's a line and staff organization. About half the employees belong to a geographical location and are under a Division Superintendent or one of his subordinate managers, and half belong to a functional area and are under someone like the "Master of Engine Repairs".
Thus began a classic problem, the stovepipe organization. There are people under the Master of Engine Repairs for the Susquehanna Division, but they don't report to the Division Superintendent for the Susquehanna Division. You can see the same thing in the Telegraph department, where there are people far down the reporting chain who technically belong to the distant Telegraph Superintendent but work near the Division Superintendent for a division.
There were org charts before this. Military tree-structure organization goes back to at least the Roman Empire. McCallum had to solve a new problem - coordinating the efforts of a large number of people at different locations who were all working on the same system.
Now, that org chart does not reflect how train dispatching worked, although the McKinsey article discusses dispatching. Schedules and train orders were a completely different system, with its own hierarchy. Look up "train order" to understand that.
The late 19th century, increased prominence of joint-stock corporations, and the complexities of modern technological firms (railroads, large-scale steel mills, chemical processing (where getting things right was slightly less a concern than not getting them very wrong --- see DuPont), telephony, and large-scale complex manufacturing (Ford, GM) all gave rise to new developments in business organisation and communications.
I recently read the book Corps Business (as in Marine Corps) and this tracks with how the Marines changed their organizational command structures post Vietnam.
For example, tactical decision making went down the chain of command as the thought was the non commissioned officers and front line troops were in the best position to make those decisions. This is not that surprising given modern management thinking. What was surprising: certain administrative decisions went UP the chain.
This is best exemplified by the quote: "In Vietnam, as a captain I was making tactical decisions while also managing the food supply for my troops. Now, junior lieutenants and sergeants make those tactical decisions, colonels handle the food supply and I can make more strategic decisions."
This is opposite of my experience in technology where it seems the middle managers are doing a bit of everything:
- personnel work e.g. coaching, mentoring etc
- tactical planning e.g. organizing sprints etc
- strategic planning e.g. "how are we going to re-design X"
That's a good article, and helpful reminder to learn from the past rather than letting history repeat itself!
"McCallum gained control by giving up control, delegating authority to managers who could use information in real time"
"targeted metrics had to be reported back to its board of directors"
Sounds like cache-RAM-disk in a computer, but being applied to a business Process.
The other suggestion I'm experimenting with for encouraging constructive Process (making code review less scary) is saying "thank you" for the 730 good lines, and making suggestions for the 19 lines to change. It's destructive to just say "these are bad", but through suggestions and humility, we can learn from each other. In the 1854 train network, I guess that would be each train being willing to yield to others. And for us as passengers, saying "thank you" to the conductor or bus driver.
"McCallum therefore designed a system of hourly, daily, and monthly reports" Yes. He was also responsible for some basic business terminology, such as "division" and "section".
It's a line and staff organization. About half the employees belong to a geographical location and are under a Division Superintendent or one of his subordinate managers, and half belong to a functional area and are under someone like the "Master of Engine Repairs".
Thus began a classic problem, the stovepipe organization. There are people under the Master of Engine Repairs for the Susquehanna Division, but they don't report to the Division Superintendent for the Susquehanna Division. You can see the same thing in the Telegraph department, where there are people far down the reporting chain who technically belong to the distant Telegraph Superintendent but work near the Division Superintendent for a division.
There were org charts before this. Military tree-structure organization goes back to at least the Roman Empire. McCallum had to solve a new problem - coordinating the efforts of a large number of people at different locations who were all working on the same system.
Now, that org chart does not reflect how train dispatching worked, although the McKinsey article discusses dispatching. Schedules and train orders were a completely different system, with its own hierarchy. Look up "train order" to understand that.