How do you know if bureaucracy is evolving faster than your process excellence strategy? Growth is often seen as the ultimate sign of success for a company. However, the more it grows, the more layers of approvals, policies and committees it adds.
Ironically, companies can turn into the very thing they swore to disrupt – a bureaucracy. The very companies that valued being lean have become more bloated than the government departments they derided.
What is DOGE?
You’ve likely heard about the Department of Government Efficiency (DOGE) – a creation of President Donald Trump and Elon Musk. Is DOGE perfect? Far from it. However, it does provide a valuable starting point for identifying practices that don’t work.
It was recently discovered that The Office of Personnel Management had been storing and processing tons of retirement paperwork in a Pennsylvania mine – some of which date back to the 1960s. Whoever said that data is like a goldmine must have mistaken it for the 400 million employee pension files stored in this mine. This situation would hardly be considered ‘forward-thinking’ but rather ‘downwards-thinking.’ Workers have to travel 230 feet underground and update those employee forms by hand.
By now, you may be thinking “why didn’t this department anticipate storage to be problem? and likewise “why didn’t they enter these employee records into a database?” This article explains what keeps bureaucracy alive and what you can do about it.
Hoarding behavior and separation anxiety
Most companies talk about change, but the slightest change sends their anxiety through the roof. It can be counterproductive trying to push change onto those who are naturally anxious and risk averse. At first, bureaucracy gives them that added-psychological comfort, but instead of discarding obsolete processes as they should, many companies keep stacking them up, creating process rot.
Understandably, being asked to remove items would trigger separation anxiety. The hoarder will claim that every policy, form, wording and procedure has a purpose, but refuse to discuss alternatives. Replacing a document with a different shading is unacceptable for those feeling separation anxiety. This hoarding starts to replace all sense of leadership, leaving anxiety to make the decisions for them. Their workplace slowly descends into a house full of junk – multiple versions of paper documents, internal tools nobody wants to turn off and sign-offs that involve everyone from legal to finance.
Let’s now discuss the ‘why’ aspect. From a psychological view, hoarding is a type of obsessive-compulsive disorder (OCD). Anxiety increases when we’re kept away from items we’ve grown attached to. Letting go of an old system or rule means accepting uncertainty. People hang on to old approval steps, feeling afraid of being held accountable if something goes wrong. The negative threats are all they think about.
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Bureaucracies and experimentation
Strategy directors who work in highly regulated environments will recognize the challenges of updating a product. Bureaucracy has left us with an image of something very rigid and industrial. If bureaucracy were a game, it would be like Tetris. In this Soviet-era game, objects can only move downwards, never upwards. Bureaucracy works on similar rules. It’s anchored in the belief that things should not change. Procedures should be fixed, and the slightest deviations should be punished.
The reluctance to innovate is often attributed to regulators or external forces. That may be true of certain countries. I’m yet to find a regulating body in the Western world that has banned innovation and outlawed ‘thought experiments.’ Instead, it’s easier if they just add new processes on top of existing ones, leading to Frankenstein-like operations. It results in a mostly old infrastructure with some new features added, but nothing that works.
It can be argued that knowledge of history will benefit any leader driving a digital transformation in the more traditional industries. They would be designing new software solutions from the current decade while working out how to integrate that into a legacy infrastructure designed during the Cold War. Transformation leaders in the financial sector relied on mainframe computers and COBOL – a 60-year-old programming language – still dominates banking today. DOGE’s recent findings about the inefficiencies at the Internal Revenue Service (IRS) should not be a surprise. In 1862, President Lincoln established the Office of Commissioner of Internal Revenue as a means to fund the Civil War through a permanent internal tax system. As such, the IRS was never designed with digital technology in mind.
Bureaucratic identities
Rules and systems are created to solve real problems, but when they go unchecked, those once helpful practices turn into harmful rituals, and eventually, become part of the culture. Bureaucracy can be so strong that it constrains our thoughts. People no longer question why something is done. When they do ask inquiries, it’s only superficial and targeted at the underlying assumptions. When someone asks “why did you store the pension file in corridor A?” it might sound like a normal request, but those outside that immediate bureaucracy will question the assumption, “why are their retirement records stored in an underground mine in the first place?” As Musk jokingly pointed out: the mine’s elevator shaft determined how fast people could retire.
A culture that reinforces bureaucracy is hard to change. Potentially, you’re dealing with a identity that someone has morphed into. Some may have worked in a bureaucracy for such a long time that it’s become the norm for them. They don’t sense a need to question the underlying assumptions if they don’t see fault in their everyday behaviors – that everything works just fine.
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You can’t afford to wait
Executives often think that overcoming bureaucracy is purely about cutting inefficiencies. As companies grow, they add layers of approvals, compliance checklists and a hundred compliance lists. They may even compulsively hoard old processes to satisfy their separation anxieties. Suddenly they have created a bureaucratic maze that they struggle to navigate.
To summarize, here are a few tactics to help overcome bureaucracy.
- Understand that hoarding behavior can cause separation anxiety. In more pathological cases, it can distort perceptions of risk. While hoarding behavior may indeed be problematic, the complete removal of an outdated process can aggregate separation anxieties. Changes have to be shown transparently and logically. If every risk needs 20 or so signatures, then perhaps consider a new tiered system where low-risk decisions can be made first. Not every item will be high-risk.
- Bureaucracy doesn’t stop experimentation. New ideas can roam freely and small improvements can still be celebrated. Another risk from excessive bureaucracy is that it can prevent experimentation. The world has moved on from the 1960s. It’s now easier than ever to experiment with ideas, prototypes and more effective solutions. These practices are relatively cost-free. Even small improvements can make a big difference if the right pain points are addressed and then applied across the remaining departments. Don’t just celebrate what delivers the most commercial outcomes. It’s time to celebrate with your team when a small but painful part of the process has been simplified.
- If bureaucracy is alive, then so should be constant inquiry. Assumptions that are not seldomly questioned should be questioned. Let’s take a moment to see things from their perspective. The cost, effort and psychological strength to re-enter 400 million retirement records from paper into a new database will be a demoralizing task for a group of employees whose pay isn’t linked to this productivity. Constant inquiry can help bring these ‘difficult-to-discuss’ issues to the surface. Productive dialogue occurs when we address the underlying assumptions and make an effort to evaluate them.
As leaders, we can’t afford to wait until bureaucracy stalls progress. One possibility is that, initially, innovation can work far more effectively alongside, and not against, the existing rules of a bureaucracy. In that, we can always be more strategic about engaging both agile innovators and bureaucrats. We depend on both types of players in the race to modernize companies. The innovator brings new technology and the bureaucrat brings a deep history to help navigate the maze.
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