Fast Company:

Inspiring Culture

Getting Rid of the Bureaucracy

Eliminating Waste, Unnecessary Approvals and Speed-breakers

By: Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

"The more regulations, the poorer people." ~ Lao Tzu

"It is as unfair to slowly dismantle a bureaucratic structure as it would be for a surgeon to open up a patient once a year and remove 10% of a cancerous tumor."1

Classic Signals of Bureaucracy

By Robert Heller5

  • Detailed monthly budget approvals

  • Centrally-driven strategic planning only

  • Powerful staff members with no line responsibility

  • Many-layered approval procedures

  • Many-layered, strictly observed payment bands

  • Rigid status symbols

  • Hefty corporate manuals and "bibles"

Eliminating the Bureaucracy Problem

By Robert Heller5

  • Move financial reporting from monthly to quarterly.

  • Make senior managers responsible for their own strategies.

  • Eliminate all staff jobs unless proved to be essential.

  • Push approval levels right down in line.

  • Broaden and reduce the payment bands.

  • Scrap the status symbols and "burn the bibles".

  • identify nonsenses and eradicate them.

Fast Company Case Studies Getting Rid og Bureaucracy

Who Should Stay at the Head Office1

  1. Leaders executives who have a direct involvement with finding, keeping, or growing customers

    • finding means leading the process of acquiring new customers

    • keeping means leading the process of exceeding the expectations of the customers

    • growing means creating relevant new products and services to increase customer spending and loyalty

  2. Support staff

    • accountants to make certain the numbers are right

    • legal to stay out of trouble

    • tax to pay as little as legally possible

    • human resources to find, keep, and grow the right people

 

 

How To Lead Creative People

By: Max DePree

The GE Leadership Effectiveness Survey (LES)

  • Hates / avoids / eliminates "bureaucracy" and strives for brevity, simplicity, clarity... More

Learning from Fastest Companies

No organization with a large bureaucracy is able to make fast decisions. Bureaucracy creates a climate in which the customer comes third well after the management and the company's other employees.

 

Don't let minor rules and regulations, and some people, that make no sense but seem almost impossible to circumvent to swamp and clog your organization. Getting rid of the bureaucracy is a law at fastest companies, and anyone found guilty of building or perpetuating bureaucracies is severely punished for management malpractice. "The more dead weight at the top of the organization involved in the decision making process, the slower the decisions will be made".1

9 Signs of a Losing Organization

  1. High Bureaucracy: bureaucratic organizational structures with too many layers; high boundaries between management layers; slow decision making; too close monitoring of things and subordinates; too many tools and documents discouraging creative thinking; bureaucracy is tolerated... More

Balanced Organization: 5 Basic Elements

Empowered Employees (Metal):

  • People hate and fight bureaucracy relentlessly at all organizational levels... More

 Case in Point  GE

Jack Welch has always hated and fought bureaucracy. "To him, bureaucracy is the enemy. Bureaucracy means waste, slow decision making, unnecessary approvals, and all the other things that kill a company's competitive spirit. He spent many years battling bureaucracy, trying to rid GE of anything that would make it less competitive."4 He didn't simply strip away a little bureaucracy. He reshaped the face of the company to rid it of anything that was getting in the way of being informal, of being fast, of being boundaryless.

Welch felt that ridding the company of wasteful bureaucracy was everyone's job. He urged all his employees to fight it. "Disdaining bureaucracy" became an important part of GE's shared values, the list of behaviors that were expected from all GE employees... More

 Put Values First

 Case in Point  ASEA Brown Bovery

When Sweden's Percy Barnevik's company merged with the troubled Swiss giant Brown Bovery, he promptly sent a message to the thousands of bureaucrats who worked at the company's headquarters in Zurich: "In the future,... the company won't be run like a government and administered from a central home office. Everyone at head office has ninety days to find a real job within the company that has something to do with the customer". Ninety days later Barnevik made good on his promise. More than 3,000 bureaucrats who were unable to comply were laid off. As a result of this shake-off, the once stodgy company where decisions took months - quickly transformed itself into a quick-thinking company where all decisions are made in 1,000 local offices by 170,000 associates and employees. "The new ASEA Brown Bovery has sizzled, going from one strength to another and currently earning profits in excess of $2.5 billion annually."1

 Case in Point  Dell Computer Corporation

 

"From the very beginning, we tended to come at things in a very practical way," writes Michael Dell9, the Founder & CEO of Dell Computer Corporation. "I was always asking, "What's the most efficient way to accomplish this?" Consequently, we eliminated the possibility for bureaucracy before it ever cropped up, and that provided opportunities for learning as well. Our sales force, for example, had to set up their own computers. They probably didn't enjoy it, but it gave them (and us) a real sense of what the uneducated customer would go through to set up his system, and it helped them develop a more intimate understanding of the products they were selling. As a result, they were able to help customers make informed decisions about what to buy and they could help solve equipment problems. That marked the start of our reputation for great service, one of the tools for staying ahead of the competition."

 Case in Point  Cutting Long Meetings Short

A CEO hired Larry Farrel, a renowned management consultant, to help him to get rid of the corporate bureaucracy. In particular, the CEO complained about the length of corporate meetings the discussions were poorly focused and too long. Larry suggested a very simple but a very effective solution: to remove chairs from the meeting room. The CEO was extremely satisfied with the results: decisions were taken now within three minutes instead of three hours.

 Case in Point  Bunsha

Bunsha means company division. In practice in means routinely spinning off companies from the core group.

Kuniyasu Sakai and his partner, Hiroshi Sekiyama, are legendary managers in Japan. They don't buy the "bigger is better" concept. Kuniyasu Sakai and Hiroshi Sekiyama started a business together in the aftermath of World War II. Over the next few decades they turned it into a highly profitable business. Rather than build a single, giant firm, they divided it, and then kept on dividing. Always keeping each of their firms at its optimum size.

In the process of creating a prosperous Bunsha group of companies, they discovered how to keep their companies on the cutting edge, their employees productive, and their clients happy, all at the same time. Their method is what Mr. Sakai calls bunsha (literally, 'dividing companies'), a system he and Mr. Sekiyama developed over more than 40 years of real-world corporate management. They created a group of more than 40 thriving, independent, high-tech manufacturing companies through bunsha (company division). Once a company is "successful," they fear that bureaucracy and complacency will set in. What do they do? They divide it... More

SYNERGISTIC ORGANIZATION (Ten3 Mini-course) - How To Build a Modern Winning Organization

 

References:

  1. It's not the BIG and eats the SMALL... it's the FAST that eats the SLOW, Jason Jennings and Laurence Haughton

  2. The Cycle of Leadership, Noel M. Trichi

  3. "Jack Welch and the GE Way," Robert Slater

  4. The Welch Way, Jeffrey A. Krames

  5. Roads to Success, Heller, Robert

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