Excessive bureaucracy is an enemy of productivity
“HR and Organisation Design function must wake up from the lull of ADD – Ambition Deficit Disorder,” says Gary Hamel, one of the world’s most iconoclastic business thinkers. Just like the field of science, the practice of HR and organisation design must have a vision to innovate and to make ground-breaking changes in the world of work. There’s a strong evidence that an excess of bureaucracy strangles productivity and innovation. Management Lab estimated, an excess of bureaucracy costs the U.S economy more than $3 trillion in lost economic output, or about 17% GDP . This figure could rise to nearly $9 trillion if all of the 32 OECD countries are included !
Yet, today more people are working in complex, bureaucratic organisations than ever before . Analysis of occupational data provided by the U.S Bureau of Labour Statistics in 2014 shows that there were 23.8 million managers, first-line supervisors, and administrators in the American workforce, which works out to an average ratio of 1 manager and administrator for every 4.7 employees!
The big question is, how many of these 23.8 million overseers do we actually need? Can we double this average span of control to free up the 12.5 million individuals to do more innovative and productive work? Good news is, the success stories of post-bureaucratic pioneers- the likes of W.L Gore and G.E Aviation suggest that it is! Read more cases at the Harvard Business Review.
The challenge for HR and Organisation Design Function
First HR and OD professionals need to embrace this the challenge of a lifetime and find ways to dismantle bureaucracy.
How can professionals design an organisation where people can truly flourish? An organisation that is:
- Bold simple, lean, open, flat?
- Fit for the future and genuinely fit for human beings?
- Fostering growth in people productivity and enlarging the leadership franchise?
- Infusing entrepreneurial and innovative spirit at scale?
Ultimately, we need to create an environment of work where we can drive performance, irregular ideas and business model that change our lives.
Getting rid of organisation ‘Bureausclerosis’
We often eulogise people empowerment. We denounce bureaucracy but do little to dethrone it. The problem is organisational bureaucracy is so familiar, entrenched, and defended by those at the top.
Gary proposed 5 steps to dismantle bureaucracy, from bottom-up:
- Get a (little) angry
Yes, the first step is to recognise that an excess of bureaucracy is intolerable. A myriad of research has proven that autonomy is positively co-related with creativity, so challenge the moral slumber!
- Load up on data
More than speaking to matters of the heart, to build traction, we need to speak to the head. This is where data becomes a powerful weapon. Crowd-source data to calculate and expose your organisation’s BMI – Bureaucracy Mass Index.How pervasive is bureaucracy in our organisation? How much valuable time and cost does it suck up from our people?There are great tools in the market (e.g. OrgVue) that can help us collect data to visualise, and analyse the span of control of your organisation in an insightful way.Linking People with Activities data through actual time spend will also reveal how much time each activity is using and who is doing what. This will make a powerful case for us to design a more efficient organisation structure!
- Keep it lean
There is an absolute trade-off between innovation and control. We can’t infuse the spirit of innovation in large monolithic organisation. For practical tips on finding your ideal span of control, read this blog.
- Distinguish the what and how
There are some institutions like banks and hospitals where control, supervision and tight spending limit are inevitably in place. What if your organisation falls into this category?The answer is we can still get control WITHOUT bureaucracy.The case of W.L. Gore, a $3 billion high-tech company famous for its Gore-Tex fabrics) is illustrative. In W.L. Gore teams can choose their own leaders. Equally, they can vote their leaders off the cast. At the end of every year, employees at W.L. Gore get to review each other on a scale of 1-25 on how much value they give to the company. The results are then put into a bell curve to determine their salary.It’s not about satisfying the boss but it’s about the value that people actually bring to the organisation. By democratising the process, peers can effectively hold each other accountable for this.
- Start from where you are
Throughout history, we’ve learned that the greatest resilience to change is caused by the fact that individuals don’t believe they can have a ‘system’ impact. So start thinking of ourselves as activists and don’t be locked inside our job description. We can drive a powerful change by first scaling sideways before going up!
For more tips and tricks to supercharge your organisational data and create change, check out Data-Driven Organization Design.
Get in touch with OrgVue to help you design an organisation that’s fit for the future.
Latest posts by Melissa Adjiputro (see all)
- Strategic workforce planning – how to win business support - July 10, 2017
- Bureaucracy strangles organisational productivity – get rid of it! - October 28, 2016
- HR Transformers: Are you ready to be a Super HeRo? - October 15, 2015