Organizational Routines as Truces

Definition

Drawing on economists Richard Nelson and Sidney Winter's 1982 theory of the firm, Duhigg argues that companies are not "big happy families" pursuing a shared goal through rational decisions — they are more like ongoing civil wars between departments, executives, and rivals competing for credit and resources. Most of the time this warfare stays bounded and invisible because organizational routines function as truces: unwritten rules that let people set aside rivalries long enough to get work done, on the implicit promise that if everyone abides by the routine, the profits (or the outcomes) will still get shared. Truces only hold, however, when they distribute the burden roughly fairly; a one-sided truce — where one group absorbs all the accommodation — collapses under pressure exactly when it's needed most.

In the Book

The clearest case is Rhode Island Hospital, riven by tension between physicians and nurses (a 2000 nurses' strike over mandatory overtime is one flashpoint). Rather than genuine mutual respect, the staff developed informal habits to manage the friction — nurses double-checked error-prone doctors' orders, wrote extra-clearly on charts, and color-coded doctors' names on a whiteboard (blue for "nice," black for "whatever you do, don't contradict them"). These routines were a truce, but an unbalanced one: only the nurses ceded power. When a nurse tried to stop a rushed surgeon from operating without confirming which side of an elderly patient's skull held a hematoma, the truce's one-sidedness meant she backed down — and the surgeon operated on the wrong side of the man's head, contributing to his death. Duhigg contrasts this with the 1987 King's Cross Underground fire, where an employee's habit of not reporting a burning tissue (because fire safety "wasn't his job" under the unwritten truce between the Underground's four departmental "Barons") let a small fire become a fatal blaze — and with what happened afterward: leadership was fired, new laws passed, and the organization's habits were deliberately rebuilt so that every employee had explicit authority to raise a safety concern regardless of whose territory it crossed.

Why It Matters

This concept explains why the same behavior — an employee staying quiet, a department protecting its turf — that looks like a personal failure or bad training is often actually a rational move within a negotiated peace nobody explicitly designed. It gives a diagnostic for institutional dysfunction that goes past "add more rules" or "assign more authority": ask who is giving up power to keep this truce running, and whether the truce distributes real justice or just quiet compliance from the weaker party. It generalizes to any coordination structure — a team's meeting norms, a family's division of labor, an alliance between organizations — where the routines that keep daily friction invisible are exactly what needs auditing before a crisis exposes them.