I've often heard an assertion: specialization is key to improving productivity. But my experiences working in the software industry have made me more cautious about this idea. I've seen too many product disasters unfold due to over-specialization.
Lately, I've been doing two things:
- Developing a super-convenient API generation tool, LiveAPI.
- Reading Adam Smith's Wealth of Nations, trying to think more clearly about how economies (and businesses) work.
People who've lightly read Adam Smith tend to say, specialization leads to productivity. But from my own experience in software development, I've often found this statement to be oversimplified, at least in many of the projects I've worked on. The "assembly-line mindset" of specialization rarely leads to a coherent product.
I think it was Eric Schmidt who had a rule at Google: the end customer should not know the org structure which produced a particular product. This rule can be seen as a more positive variation of Conway's Law, which states:
Systems designed by an organization will reflect the organization's communication structure.
In software, whenever Conway's Law won, the customer lost. You often end up with a poorly integrated, disjointed user experience.
And from what I've noticed, open-source projects with a strong, benevolent dictator tend to work better because it avoids that design by committee pitfall, where a mishmash of ideas is forced together into a clunky, incoherent result.
So, despite knowing how important specialization has been in manufacturing and other industries, I've always been somewhat skeptical about it in software.
Was Adam Smith Wrong About Specialization?
After reading Smith for myself, the answer is clear: no, Smith was right, but many of his modern interpreters are mistaken.
The thing is, specialization alone is just part of the equation. The real productivity boost comes from specialized teamwork—when individuals with specialized skills come together within a highly integrated system. It’s the collaboration that drives massive efficiency, not just individual expertise.
The key to success is designing a system that maximizes the strengths of specialized workers while ensuring that their roles fit seamlessly together. When these specialized roles don’t sync, things can go downhill quickly. That’s a nuance often overlooked in discussions about specialization.
Let me explain.
Why Division of Labour Works — and Why It’s Not Just About Specialization
We’ve all seen the benefits of division of labor in various industries. The basic idea is simple: break a task down into smaller, more manageable chunks, then assign each chunk to someone who’s particularly skilled at it. This approach, in turn, makes everyone more efficient.
But here’s the twist: division of labor works not just because people are more specialized, but because specialization within a well-coordinated system lets individuals get better and better at their specific tasks.
- Specializing allows people to hone their skills, increase their speed, and improve their precision.
- It sharpens judgment and dexterity in a narrow domain, meaning each person becomes an expert in their slice of the process.
We can see this approach working more clearly in smaller industries. These environments are typically where the group is small, everyone’s role is sharply defined, and it’s easy to track how the whole system benefits from specialization.
Let’s take a look at a seemingly simple example: pin-making.
The Pin-Making Example: A Lesson in Specialized Teamwork
Imagine this: you’re trying to make a pin. Without the proper tools or training, you might struggle to make even a single pin in a day. If you're lucky, you might manage 20.
But here’s the key: modern pin-making is completely different. It’s all about specialized teamwork. The whole process is divided into distinct tasks, with different people handling each one. Let me walk you through it:
- Step A: One person draws the wire.
- Step B: Another straightens it.
- Step C: A third cuts it.
- Step D: Someone sharpens the point.
- Step E: Another grinds the top for the head.
- Step F: Another creates the head.
- Step G: Another attaches the head to the pin.
- Step H: Finally, someone packages the pins.
In total, making a pin can involve upto about 18 distinct steps—each handled by a specialized worker. In some factories, one person might even do two or three steps, but the key is that no one is responsible for everything. This division of labor lets each person focus on what they’re best at, resulting in efficient production.
Now, picture a small pin factory with just 10 workers. Despite their limited resources and basic tools, they manage to produce 12 pounds of pins per day—over 48,000 pins daily.
Let’s break that down:
- Over 4,000 pins per pound of pins.
- 48,000 pins daily, or about 4,800 pins per worker.
Now imagine if these workers had to do everything themselves—drawing the wire, sharpening the points, attaching the heads—without any specialized training or roles. How many pins do you think they’d make? Probably not even 20. Maybe 1 or 2 on a good day.
Without specialized teamwork, their productivity would drop to less than 1/200th of what they could achieve within a specialized system.
Why This Matters
This simple example shows how specialized teamwork can massively boost productivity in ways that individual specialization can’t. It’s the system that makes all the difference. When workers focus solely on their specific roles—without worrying about everything else—they become experts at their part of the process. And when their efforts are well-coordinated, the output is extraordinary.
Here’s a quick summary of why this works:
- Efficiency: Specialized tasks lead to faster, better execution.
- Expertise: Each worker masters their skill, leading to higher performance.
- Coordination: A well-designed system ensures that all these tasks fit together, maximizing overall output.
The Big Takeaway: Specialization + Teamwork = Productivity
The secret to productivity gains doesn’t lie in just specializing each person. It’s about making those specialists work together in an efficient, coordinated system.
When specialization is paired with smooth teamwork, it unlocks productivity levels that would be impossible to achieve through isolated work or poorly coordinated roles.
So, the next time the topic of specialization comes up, it’s worth considering that the real value often lies not just in individual expertise, but in how a team can integrate and leverage each person’s strengths to achieve a more cohesive and efficient outcome.
For me the conclusion is that, by focusing on specialized teamwork—not just specialization—one can unlock massive productivity gains, whether you're running a factory or building a tech startup.
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