►THE “BUREAUCRACY vs. FINANCIAL RESULTS” CASE◄
THE NEED FOR SPEED-
Since 1996 we have shared with clients and with audiences that, “speed is the only competitive advantage in business that costs nothing”. While everything else in business has become more expensive and in many cases more risky, speed is still free and risk-free when approached mindfully.
Just as bureaucracy has never improved customer capture and retention it has also never improved enterprise speed. In fact, as bureaucracy grows enterprise speed slows, with variable expenses nearly always growing at an exponential rate.
Work flow unfortunately becomes increasingly stagnant within increasingly bureaucratic organizations.
IN THE WORDS OF SEVERAL OF OUR CLIENTS-
Bureaucracy ranging from that which is noticeable to that which is excessive adds overhead, slows decision making, distracts from customers and financial objectives, creates internal friction, prevents risk taking, causes departures of the most highly capable employees, and very often removes customer interests from business decisions. It contributes as much to positive financial results as the time of today’s sunset contributes except that the sunset never does damage to numbers.
On a large number of occasions, we have been retained out of client survival necessity to mitigate or eliminate this negative force. During 14 of those engagements we have mapped the beginning of bureaucracy, the growth of bureaucracy, the commitment to and defense of bureaucracy, and the impact of expanding bureaucracy within client enterprises upon their brand, revenue, margin, profit and shareholder return prior to commencing the neutralization of their bureaucracy peacefully and in partnership with them.
As in the case of colon polyps progressing to colon (large intestine) cancer, the bureaucracy cancer frequently takes as many as 6 to 15 years before it becomes impossible to reverse and heal. It is a one-way street within both colons and enterprises, and without external screening and intervention both cancers are eventually fatal 100% of the time. But, for one to as many as 8 years there tends to be no discernable illness symptoms noticed by most ill people and ill enterprises.
Colon Cancer Stage IV is present whenever that cancer has metastasized from the colon to any other body organs. Enterprise bureaucracy cancer Stage IV is present whenever bureaucracy has spread from its originating department or work team to any other department(s) or work team(s). Our client research indicates clearly that this bureaucracy cancer spreads noticeably more rapidly within business than colon cancer spreads within the human body, particularly when any new key executive is a misguided fan of such business cancer.
Endemic bureaucracy is more damaging to earnings than the most intense market competition is, and our executive and Board clients refer to it in the past tense as an Enterprise Stage IV Cancer (ES4C) with pointed words such as affliction, blight, disease, scourge, terror and villain.
CUTTING TO THE CHASE-
Within business, bureaucracy is any action, habit, methodology, leader preference or undertaking that does not translate into improved financial outcomes and/or internal efficiencies beginning in short order. It includes any and all activities that are not focused upon enterprise mission as it relates to customers and financial results.
As one example within enterprises prone to meetings, a 4-hour meeting should…and should be required to…deliver twice the financial and/or efficiency improvements of a 2-hour meeting. Likewise, a 12-person meeting should…and should be required to…deliver 4 times the financial and/or efficiency improvements of a 3-person meeting. Conversely, a 1-hour meeting that delivers no improved financial and/or efficiency improvement results should have lasted zero minutes. And as you might assume, any meetings where decisions are not made have no chance of creating improved financial and/or efficiency results except on a randomized basis not derived from such meetings.
You see, when the most capable people are hired, led and rewarded correctly there is very little and usually no need for meetings and other bureaucratic manifestations to coordinate employee and executive actions through what we call group grope meetings.
THE DNA OF BUREAUCRACY-
Bureaucracy is not born; it grows. Similar to colon cancer it is not possible to cure ES4C without direct and targeted interventions, some of which are out of necessity as invasive as a flexible sigmoidoscopy is for the purpose of ending colon cancer. Sometimes polyps must be removed and other times the colon and other organs need to be removed.
The reason forest fires are so effective at what they do is because they create their own winds with those winds generally being 10 times what ambient winds are before such fires ignite. Enterprise bureaucracy is also fueled largely by its own wind. In sum, bureaucracy and fire create the same damage.
While we cannot possibly know the level of bureaucracy symbiosis within your enterprise from a great distance if it might exist, it is our hope that it and the fuel that feeds it are non-existent for you, the people around you and the trail of destruction that is commonly left by it.
THE SYMPTOMS OF ES4C BUREAUCRACY-
These are 20 of the 40 easily discernible symptoms of detrimental bureaucracy negatively impacting enterprise financial results while in certain enterprises spreading like the flu or the plague until cured:
- Inflated position titles when compared with individual position holder accountabilities, capabilities and responsibilities.
- Reward system structures that are not founded upon market data and compensation best practices.
- Meetings that occur on a highly repetitive calendar basis such as “The Weekly Tuesday Sales Meeting”.
- Meeting titles with the word “Staff” included in the meeting title.
- Meetings that do not end on time and do not become shorter with each meeting.
- Meetings that include people who do not talk…or perhaps do not listen.
- Senior executives who are seldom or never present in customer facing locations.
- Circumstances where any executives or employees do not respond to communications on the date received at least 80% of the time.
- Individuals without subject expertise challenging individuals with subject expertise.
- Excess energy spent attempting to solve internal issues.
- Cultural focus upon opinions and views instead of upon evidenced facts alone.
- Reserved and named parking spaces.
- Private secretaries.
- Fear of being fired for any reason other than incompetence resulting in lack of production.
- Rewards not differentiated according to individual contributions and production.
- Burgeoning senior executive and/or middle management headcount beyond actual enterprise revenue growth rate.
- Headcount that is growing within departments and functions insulated from customers and market forces such as Administration, Human Resources, Finance, Legal, Information Technology and Marketing.
- Position titles such as “Chief of Staff” or any similarly rhythmic titles.
- Lack of autonomy on the part of highly capable employees and executives.
- Audits beyond those mandated for regulatory reasons.
- “Dry runs” in advance of presentations.
- Existence of institutionalized roadblocks to risk taking.
Please note that the existence of only a very small number (1 to 3) of these bureaucracy symptoms within any given enterprise will not create ruinous enterprise bureaucracy until bureaucratic metastasis occurs on what is frequently a naturally expanding basis. However, when none of the above bureaucracy symptoms exist you may be assured that the enterprise has been vaccinated against this malady at least until a senior executive is hired who happens to be a proponent of injurious bureaucracy.
How to avoid that outcome will be presented here in a future Proven Solutions article from us.
Because bureaucracy measurably inhibits human and business performance please reach back to us with questions on this key topic or if you desire assistance that would rapidly benefit all stakeholders associated with your business.
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