Bureaucracy is everywhere. I think we all secretly know that and have worked in those types of organizations. We’ve also complained about it on line at the DMV or when dealing with a massive cable company. Bureaucracy, in some ways, defines the United States from an organizational perspective. (The other things that define it? Clueless managers and clueless managers bellowing about how “what’s measured is what matters.”)
From a research perspective, it appears bureaucracy is actually a lot worse — and more common — than we actually thought.
Wait, wasn’t bureaucracy supposed to head in the other direction?
Here’s the amazing place to begin this discussion. Consider these two statements:
- In 1930, Keynes said we’d all be working 15-hour work weeks by 2030. It’s not 2030 yet, but that’s unlikely to happen.
- In 1998, Peter Drucker wrote an article for Harvard Business Review. He claimed that by 2008, an average organization would slash management layers by 50 percent and managerial ranks by 70 percent.
What’s actually happened instead?
Time at work has risen, and we’ve come to deify the workaholic.
Despite everyone screeching about Amazon, Uber, innovation, and entrepreneurship — we’re actually in an America (and a world) with more bureaucracy.
The rise in bureaucracy: Research
This is from another Harvard Business Review article about bureaucratic organizations. Here’s the key visual:
Between 1983 and 2014, the number of managers, supervisors, and support staff in U.S. workplaces grew 90%. All other occupations grew 40% or so. That’s Tier 1.
Tier 2 on the growth of bureaucracy: in 1993, 47% of U.S. private sector employees worked in organizations with more than 500 employees on the payroll. In 2013, it was 51.6%. The 1995 Fortune 500 companies employed a total of 20 million people. The 2015 Fortune 500 employ a total of 27 million people. In 20 years, then, we’ve added 7 million people to the rosters of our biggest companies.
Bureaucracy is exploding.
But why is bureaucracy exploding?
I’d say there are a few key reasons:
Pass-the-buck decision-making: Bureaucracy actually benefits most managers. If they’re terrible at their job (many are), they can use bureaucracy to never really make their own decisions. They just go from meeting to meeting and call to call and keep nodding and smiling. Maybe once in a while they toss out a buzzword-laden catch phrase to get a thumbs-up from an executive. Stacking managerial levels makes a lot of people feel calm, because it means the existent levels have to do even less. (While claiming to do more than ever, naturally.)
Poor priority management: Many companies are priority vacuums — see here and here. In a priority vacuum, many decisions make no sense. This applies to headcount (“We need to hire more managers!”) and how work gets done (“We need more layers of process!”). All this adds to bureaucracy.
Process is sacrosanct: Many organizations love their processes like first-born children, which creates a lot of “process for the sake of process.” In turn, this means process hurts actual results, whereas the whole idea with having process is to make the results better. Many orgs miss that, and extrapolate bureaucracy in the process.
Unclear role of middle management: Middle management at most companies makes no sense anymore. If you go spend $100K on a CRM, your executives can now log on from their mobile at home and see the core business numbers. Right? So what the heck is the point of Mikey Middle Manager anymore? There really isn’t one. But because of all the reasons above, Mikey will probably have a nice salary bump and a sweeter office by October.
Those would be my big four. There are others, though.
The incredible irony of increasing bureaucracy
Companies are typically very cost-averse. They want to minimize costs while in turn making buckets of money. Well, check out this graphic:
So in the past 10-12 years, companies are reducing their supply chain costs. That’s good! But they’re increasing their general and admin costs. Some CEO just scowled!
The incredible irony, of course, is that while this shift happens, most decision-makers could still give 0.12 craps about ‘talent strategy.’ In short, people are an increasing cost — but we really could care less about ways to maximize that. Let’s slash another two percent on cost of goods sold, baby! That’s on a spreadsheet somewhere, right?!?!
Bureaucracy and the C-Suite
Again, at a basic psychological level, the C-Suite loves bureaucracy. It protects them from well-documented fears of incompetence. Think I’m lying? Consider this. It used be the CEO, CFO, CMO, and maybe one or two others at the top rungs of a company. Now we have:
- Chief Analytics Officer
- Chief Collaboration Officer
- Chief Customer Officer
- Chief Digital Officer
- Chief Sustainability Officer
- Chief Learning Officer
- Chief Strategy Officer
Go on LinkedIn. You’ll find all these job titles and more.
It’s really just a complex exercise in bureaucracy — and by definition, those people have to make more money. Know that 1.2 percent bonus you got? The one below inflation? That’s because of bureaucracy jammed up at the higher levels too.
Can we squash the explosion of bureaucracy?
Probably not, honestly. It’s set up in a way to protect the most-powerful yet often least-respected among us. Anything like that in a work context tends to stick around. If you want to try and eliminate bureaucracy, though, here’s what to do:
Priority Management: What’s the strategy/purpose of the organization? How does the day-to-day work impact that?
Job Roles: Knowing that, what job roles and definitions do you need in your organization?
How are decisions made? If your decision-making is getting jammed up all over the place, chances are you have too much bureaucracy.
Where are you spending money and what’s the return? If your personnel and admin costs are rising, what returns are you seeing there? Can you document that? Can you show me?
Bureaucracy is kind of like micro-managing: we all decry it, but it ain’t going anywhere.