Markets are supposed to make corporations efficient, so if you do consulting, you have to wonder why so many organisations (both private and government) are so absurdly dysfunctional. The way I see it, there’s no real paradox: organisations are pushed by both forces of efficiency (like market forces) and forces of dysfunction (like political drama). Corporations are only efficient if the forces of efficiency are stronger.
There are many forces of dysfunction that can affect an organisation, but there’s one that’s particularly important for risk-averse organisations (like banks and large government departments). Whenever I see people in an organisation doing something that doesn’t make any sense, I always ask if this catch-22 can explain it:
Every risk-averse organisation needs someone to take the initiative to eliminate risks. But in a risk-averse organisation, that’s exactly what no one does.