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160 Marshall Van Alstyne and Nathaniel Bulkley(Jovanovic and Nyarko, 1996). These factors highlight a trade-off inherent inthe adoption of informational standards:Hypothesis 7a: Information routines and standards reduce complexity.They foster interoperability and sharing, but limit adaptation and flexibility.Optimal information standardization increases with decision stability.In executive recruiting, standardization examples include interview formsfor capturing candidate data, generation of new business leads, and routinizationof data-entry procedures by research staff. While the number of firms istoo small for statistically meaningful firm-level conclusions, the firm with themost standardized practices on all three dimensions also had the highest percapita revenues, implying that such practices do matter.While informational standards are applied to declarative information, standardizationcan also take place at the process interface. Modularity increasesthe number of independent processes, while standardizing interfaces betweenthem. Dividing tasks into independent modules partitions the search space ofpotential designs, which can reduce the costs of experimentation and speeddevelopment by allowing design processes to operate in parallel (Fine, 1998;Baldwin and Clark, 2000).Simon’s (1996) parable of two watchmakers, Tempus and Hora, providesan illustration. Each watchmaker builds watches of 1,000 parts. Hora dividesthe task into sub-assemblies based on powers of ten, while Tempus does not.Interruptions by customers cause the watchmakers to lose any partiallycompleted work – five steps on average in the case of a sub-assembly, but 500steps on average otherwise. At the end of the day, Hora has built more than anorder of magnitude more watches. The modular design proves significantlymore robust. Stated formally as a hypothesis:Hypothesis 7b: Modular designs can increase productivity by spreading therisk of process failure or enabling new combinations of processes that extendthe efficient frontier.In terms of executive recruiting, tasks are modularly distinct for partners,consultants, and recruiters. For example, researchers specialize in generatingcontacts, consultants typically perform the initial screening of candidates,while partners interact directly with clients and are responsible for generatingnew business. This allows individuals to specialize in certain tasks and isreflected in our survey as differences in how recruiters spend their time thatvary significantly more across job types than across firms. For example,researchers spend the most time in front of computers, while partners spendtwice as much time as consultants interacting face to face. Job specializationalso allows teams to constantly re-form across engagements, which alsoencourages information spillovers across teams.While informational standards and modularity both seek to limit the costsof transmitting information between processes, a more general trade-off often