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Classic
Signals of Bureaucracy
By Robert Heller5 |
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Detailed monthly budget approvals
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Centrally-driven
strategic planning only
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Powerful staff members with no line
responsibility
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Many-layered approval procedures
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Many-layered, strictly observed
payment bands
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Rigid status symbols
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Hefty corporate manuals and
"bibles"
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Eliminating the Bureaucracy Problem
By Robert Heller5 |
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Move financial reporting from
monthly to quarterly.
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Make
senior managers
responsible for their own strategies.
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Eliminate all staff jobs unless
proved to be essential.
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Push approval levels right down
in line.
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Broaden and reduce the payment
bands.
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Scrap the status symbols and
"burn the bibles".
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identify nonsenses and
eradicate them.
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Who Should Stay at the
Head Office1 |
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Leaders
–
executives
who have a direct involvement with finding, keeping, or growing
customers
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finding – means leading the process of
acquiring
new customers
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keeping
– means leading the process of exceeding the expectations of the
customers
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growing – means creating relevant
new products and
services to increase customer spending and loyalty
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Support staff
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accountants – to make certain the numbers
are right
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legal – to stay out of trouble
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tax – to pay as little as legally possible
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human resources – to find, keep, and grow the right people
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The
GE Leadership Effectiveness Survey (LES)
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Hates / avoids / eliminates "bureaucracy" and
strives for brevity,
simplicity, clarity...
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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
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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):
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...
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