Everybody loves to hate bureaucracy. We love the cartoons and jokes that make fun of people who follow the rules, even when the rules make no sense. We hate the clerk who shrugs and says that he or she can’t make an exception to company policy.
People have probably hated bureaucracy for as long as it has been around and that’s a very long time. In the Ancient Middle East, scribes administered the rules laid down by kings and emperors and pharaohs.
The basic definition of a “bureaucracy” is the same today as it would have in Imperial China or Ancient Sumer. It’s a system where appointed officials do their work according to a standard set of rules. For centuries only governments had bureaucracies. That’s because governments were big and spread over a wide territory.
Until the 1800s, most businesses were small. They were almost all run by relatives or close friends and they didn’t need policy manuals.
Those manuals with their detailed procedures for every occasion began to appear in the last part of the 1800s. They fit right in with the ideas of Frederick Taylor’s “Scientific Management” that there was always “one best way” to do things and that way should be specified by the people at the top of the organization and followed by those below.
That may have worked fine a century or more ago, but it won’t work today. This is the age of the knowledge worker, the age when innovation is essential and great organizations need to be agile in the face of change. Today you can’t write rules fast enough to cover all the challenges your company will face, let alone follow them blindly, no matter what. Today bureaucracy is an organization killer.
Bureaucracy kills innovation. Just about every company says they want their employees to come up with new ideas. But then what happens? In too many places the employee has to go through step after step of approval before he or she can try the idea out.
U.S. automaker General Motors had a typical process. If an employee had an idea for improving operations, he or she could submit it to the suggestion system. The first screening by a management committee rejected three out of four suggestions. Then other committees met to review the remaining suggestions until they selected those to try. That usually took a year or more, after which the idea had to be written into the budget.
A 1980 study compared GM’s suggestion system with the one at Toyota. GM workers submitted less than one suggestion per year on average. Toyota workers submitted almost eighteen. The Toyota workers were no smarter or more creative than the workers at GM. But the Toyota system was set up to try almost all ideas right away, with no executive approval or management review required.
Question: If a person in your company has an idea that they think will make things better, what do they have to do to get a trial approved?
Bureaucracy kills agility. Agility is the ability to adapt quickly to changes in the marketplace and it’s critical in the fast-changing world where we do business. The consulting firm Booz and Company studied more than two hundred firms over thirty years and identified agility as the key factor separating consistent top performers from the rest.
In agile firms, managers in the field have a wide range of action and there is few staff. When top management approval is needed, decisions come quickly.
Questions: How much freedom of decision do your company’s managers in the field have? How many layers of management do you have compared with the competition? How many headquarters staff?
Nucor is the largest producer of steel in the U. S. They’ve been growing and consistently profitable since they were founded in 1965. In an industry where more than ten layers of management have been common, Nucor has just four between the plant floor and the CEO. And while U. S. Steel has a headquarters staff of over a thousand, Nucor’s staff is less than a hundred.
If you have an idea at Nucor, you don’t have to get top management approval. Convince the people around you and you can try it. If it works staff of a couple of people at headquarters help spread the word to other plants.
And what about those policy manuals that rule other industrial companies? You won’t find them at Nucor. There are just five rules for everyone.
Know the job.
Ask questions and experiment.
Share what you learn
Do what it takes to be sure something goes wrong only once.
Let us know how we can help.
That’s the kind of lean, bureaucracy-free, company that should succeed in the 21st Century. How does your company compare?
Recent Comments