Don’t Fix Bureaucracy. Kill it.

Several years ago, Bill Anderson was the incoming CEO of Genentech, the US pharmaceutical firm. He was making the rounds and talking to people. As the incoming CEO of Genentech. He wanted to to find out what's going on, what's on people's minds. And he talked to people at all levels, whether they were frontline workers or senior executives or anywhere in between. And he heard very similar themes. People loved the medicines being made and the benefits for patients, the cool science, the supportive culture. That was all great. And then, they always said, “But I can't get anything done. Can you fix that?”

And he realized, Oh, that's a problem! Can't get anything done. Wow!”

Now, if he had been new to the company, he might have thought, If they can't get things done, it sounds like there's too much bureaucracy. So get some teams and figure out how to simplify processes and break bureaucracy.

But here's the problem. For the decade before that, Genentech had been doing almost nothing but breaking bureaucracy. And so they were putting all their energy into simplifying processes, to breaking bureaucracy, and the firm was actually going backwards. It wasn’t working.

And if you're consistently losing at a game, then at some point you have to decide. You've got to play a different game.

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Why Fixing Bureaucracy Creates More Bureaucracy

The problem is that when bureaucrats try to fix bureaucracy, they end up creating more bureaucracy.

Let me give you a recent example from a large global telecom firm. We were discussing with a group of senior executives the problems the firm was facing and one of the participants mentioned the firm’s system of Key Performance Indicators (KPIs). The firm has over 100,000 employees and each of the employees is required to complete key performance indicators, which would supposedly show in detail what individual were doing in their jobs.

As a result, the firm generated over 100,000 KPIs every year, each of which had to be reviewed by a manager. The KPIs took a huge amount of time both to complete and review. The participant noted however that very few of KPIs that he had seen had anything to do with delivering value to customers, which was supposedly the firm’s overall goal. And the whole system didn’t seem to contribute anything to improved performance. The whole system was massively bureaucratic and did little for the performance of the firm.

So what was the reaction of the group? It wasn’t to scrap the whole KPI system and develop a very different performance system, much more streamlined. and focused sharply on the firm’s actual goals.

Instead, the group decided to launch a major review of all the 100,000 KPIs, and see how they could be improved with an additional section on customer impact. In other words, the massively cumbersome system would become even more cumbersome.

In a bureaucracy, few have the courage to scrap an unproductive system.

The Level Of Waste Is High

In his book,?Bullshit Jobs: A Theory ?(Simon & Schuster, 2018), the late David?Graeber put his finger on the underlying issue: the holders of these positions, often?know?that their work is pointless.

Graeber offers a precise definition of a new anthropological term, “the bullsh*t job: “A bullsh*t job is a form of paid employment that is so completely pointless, unnecessary, or pernicious that even the employee cannot justify its existence even though, as part of the conditions of employment, the employee feels obliged to pretend that this is not the case.”

We’re all familiar with the issue. At management conferences, there are often jokey discussions late at night in the bar, discussing the percentage of useless work going on in this or that organization. Estimates usually range from 20% to 60% or even higher. Elon Musk recently suggested a figure of 75%. The surveys Graeber cites puts the European average at 40-50%. Whatever the correct figure, it is clearly above zero.

And the problem can’t be fixed by asking bureaucrats to fix it. Instead, the firm must be run by people who are intent on ensuring that no work is done in the firm unless it is adding value to some external customers. It must be run by people who are intent on re-imagining management.

This pathbreaking book shows how capitalism, despite many flaws, is alive and thriving. The system of capitalism has brought vast material benefits to the human race over several centuries, and is now bringing forth the extraordinary and irresistible opportunities of the emerging digital age.

Taking inspiration from great thought leaders of the past, the book cuts through the noise and builds on the simple truth that reinventing capitalism means—finally—taking to heart Peter Drucker’s 1954 prescient dictum: “There is only one valid purpose of a?corporation: to create a customer.” This in turn means reinventing our own lives with a collective commitment to co-create value for others.

The book offers practical advice for shedding the aberrant management practices of the last half century that have created inequality and dispiriting workplaces. With this book as our guide, we can see how to create a flourishing economy with benefits for all and working environments that are creative and fulfilling.

Pre-order?Reinventing Capitalism In the Digital Age?on Amazon

Learn more here:?https://reinventing-capitalism.com/

And read also:

Why Agile Needs To Take Over Management Itself

A Manifesto For Management In The Digital Age

This is about the re-imagining of the very concepts of management and leadership.

Steve Denning ?