The beauty of information

10Feb14

The First Modern Organizational Chart Is a Thing of Beauty

OrganizationalChart 1

With this 1855 chart, Daniel McCallum, general superintendent of the New York and Erie Railroad, tried to define an organizational structure that would allow management of a business that was becoming unwieldy in its size. The document is generally recognized to be the first formal organizational chart.

Historian Caitlin Rosenthal, writing in the McKinsey Quarterly, points out that the chart was a way for McCallum to get a handle on a complex system made more confusing by the new availability of data from the use of the telegraph (invented in 1844). Information about problems down the track was important to have—it could help prevent train wrecks and further delays—but the New York and Erie’s personnel didn’t have a good sense of who was in charge of managing this data and putting it into action.

The chart put daily responsibilities in the hands of the divisional superintendents of the railroad’s lines. The superintendents, in turn, had to provide McCallum and the central office with reports on their operations. Rosenthal writes: “McCallum … designed a system of hourly, daily, and monthly reports that enabled him to calculate practical metrics, such as cost per ton-mile and average load per car.” The railroad’s board would use this data to improve operations.

Read the full article here

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