Balancing Flexibility and Bureaucracy

There was a time in a company I worked for, they implemented massive cost cutting measures in order to improve the bottom line. It’s a typical top direction in a global company, and you can imagine the pressure that trickled down to the regions. There is a long list of initiatives. Mostly are for short term, it is intended for quarter to quarter survival. One of the initiatives is to remove a function of sales admin support. So be it, the department was closed down, and some were laid off or relocated.

The sales team was of course not happy. It was clearly additional work for them. As time went by, not only the grumble did not stop but the management realized, it did not really work as expected. There were many consequences they did not think before; processes were bypassed and there were no more control points. So they had to form another department with more or less the same number of people, whose job more or less, was to keep chasing, whipping and checking on the sales team – in short, to put back the control.

Same overhead cost. More confusions and unhappiness. Less productivity.

The initial idea to cut cost was indeed good. There’s nothing wrong with that. But they were not ready at all to redesign the process, to let go some control, to release some trust and to straighten the red tape. At the end of the day it is just shifting the labor from X to Y but no fundamental change of the process, mindset and culture.

It is a dilemma of flexibility and bureaucracy, a difference between a small and a large corporate.

Nowadays, people envy the dynamics of small start-up companies. For the employees, it looks like the dream job, especially for the millennials who highly value freedom, flexibility and creativity  and despise the bureaucracy. They appreciate the trust to be creative and the freedom to maximize it. Some sideline projects were the cradle of gigantic product like Gmail, Hadoop, etc. Products that would not have been born in a bureaucratic large organization.

Sounds like what Daniel Pink coined of the 3 main motivations: autonomy, personal mastery and a sense of purpose.

These attributes are getting harder to attain in a large organization. Like it or not, a big ship needs stricter control. It cannot move as nimble as a speed boat. You can try to teach an elephant to dance but nature will restrict it to be as lithe as my golden retriever.

Google, Facebook, Amazon, Snapchat, they all started as nimble start up. The question is - and everybody is watching - how are they going to maintain their flexibility as they grow bigger and become an elephant?

There are many ways. I think there are some practical ways, largely based on common sense:

1.   Keep the bureaucracy at certain level and do not try to push it at all levels.

Set aside a boundary that is acceptable and reasonable where decision can be made faster with autonomy. It really does not make sense if your turnover is more than a million a month and you cannot trust your employee to spend a few hundred on his own.

2.   Always make sure the cost of control does not exceed the benefit.

When I first went to Germany, I was going round and round the station to find the entrance gate to tap the ticket I just bought. It turns out that there is no gate to tap; you can just go into the train! There is sometimes random check, but it is not often. I know it won’t work in my country I live in, but there is a lesson: using common sense, define if the cost to control is bigger than the benefit you expect. I am sure there is always someone who cheats as well in Germany, but if the loss is smaller than the cost to build the gate, why bother? At the end, there are some other intangible benefits, such as faster entrance and consumer’s satisfaction. The problem with the large organization is sometimes the mindset that if it works at the headquarter; it should work as well in every corner of the world. Well, it may not always be the case.

3.   Trust and Risk.

For the teenagers in love there is a saying, if you love someone, you risk yourself to be vulnerable and be prepared for love hurt. There is some truth in it, there is a risk when you trust someone, but there is also greater risk in not trusting at all. If you trust your people, their creativity and productivity may blossom to hundred folds, something you will not enjoy if there is no trust and autonomy. Finding a balance between them is not easy, but first of all, the organization must start with an open mind and willingness, only then can you decide what the fine balance is. The greatest product and achievement on earth will not be born without the risk of trusting others.

? 2018 Henry Lie.