Bureaucracy is disabling
– The last essential point is this. Bureaucracy is disabling. Bureaucracy afflicts organizations with a set of systemic disabilities, think of these as the core incompetencies of a corporation. First, bureaucratic organizations are inertial. Bureaucracies vest the power to initiate change in a small number of senior leaders, and that’s a problem. Power, as the late Karl Deutsch famously observed, is the ability to afford not to learn. When those at the top fail to write off their depreciating intellectual capital, as they often do, organizations falter.
That’s why deep change in bureaucracies tends to be belated and convulsive. Think about it. What are the opportunities your organization has missed because it was slow to change? Second, bureaucracies are incremental. In a bureaucracy, there are few incentives to challenge the status quo. It’s the compliant, not the dissidents, who get ahead. This reverence for precedence stymies innovation and opens the door to less orthodox rivals. If you doubt that, ask yourself, over the last 10 years, who have been the game changers in your industry? My bet, it’s been the newcomers, not the old guard.
Finally, bureaucracies are disempowering. Bureaucracies partition thinking, and doing. Those in the top envision, while everybody else simply enacts. And deprived of any real influence, most employees feel emotionally disconnected from their work. Unless your organization is truly exceptional, it contains a lot of people who are phoning it in. This medley of disabilities, let’s call it bureausclerosis, has real costs.
They’re indirect, but definitely debilitating. Think of all the large organizations that’ve been caught out by the future. A decade ago, Intel, Microsoft, Hewlett-Packard, and Dell, were four of the most powerful and admired tech companies in the world. They were led by celebrity CEOs, they worked with the best consultants, had multi-billion dollar R&D budgets, and yet, all of those typhoons missed, or mostly missed, the most important shift in a generation in tech. And that was the shift to mobile devices.
Similarly, it was Amazon, not Walmart, that pioneered e-commerce. And it’s Amazon, not IBM or Oracle or Accenture, that is the leader in cloud computing. If you think about this, it’s kind of nuts. After all, at every case, the incumbents had more resources, more employees, more customers, more money, more patents. But the problem is, in the creative economy, resources count for less than resourcefulness, and bureaucracies, with their emphasis on alignment, conformance, and obedience, are hell on flexibility, creativity, and initiative, the raw ingredients of resourcefulness.
So in our hyperkinetic world, organizations that struggle to adapt will soon find themselves irrelevant. Organizations that are incapable of game-changing innovation will surrender the future. And organizations that are uninspiring will fail to attract world-class talent. That’s another reason bureaucracy has to die. It’s simply becoming competitively untenable.