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Bureaucracy (Formerly Known as Efficiency)

March 31, 2010

Bureaucracy is a hated condition.  It conjures up images of facelessness, mazes, and is synonymous with ineffectiveness and wastefulness.  For some reason, I also associate it with dust.  But, how is bureaucracy born?  In its former life, bureaucracy was probably anything but bureaucratic.  Consider this:  Once there was an entrepreneurial company with three employees.  Infrastructure was really unnecessary since each person knew what the other two were doing, and everyone agreed on most things.   Then the organization grew in size, scale, and complexity–ten, twenty-fold.  In order to leverage economies of scale yet still ensure people are making the right decisions, the organization introduced systems, procedures, and protocols.  At first, people were happy to get out of “fire-fighting” mode by relying on the enabling technology and standardization to do their jobs better.  But, as time goes by, form begins to replace matter.  And the action itself, as opposed to the intention behind the action, becomes the focus: checklists that are once helpful become a “check-the-box” exercise, exception reports are generated then filed away without further discussion, etc.

Why does this happen?  I can think of three reasons:

  1. The business has changed, but the infrastructure that supports the business does not adapt.  So, employees continue to propel a system that no longer fits the evolved business.
  2. The spirit of the activity gets lost through personnel changes and less than thorough training.  Those who own the activity know the “what-where-when-whos,” but do not understand the WHY.
  3. A combination of both.

Reverse your own bureaucracies and get them back to a state where they enabled you to get things done right.  Start by doing nothing, except for some active thinking.  Think objectively about why you do each thing, whether it matters (or doesn’t), and how it is helping (or not helping) you achieve results.  You will discover a few things:

  • Some activities no longer make sense given how the environment has changed.  For example: paying only on original invoices used to be a best practice in AP in order to avoid duplicate payments.  But given technology advancements and the internet, many vendors don’t even print invoices anymore.  Thus, this kind of requirement becomes obsolete and will get in the way of processing efficiency and effectiveness.
  • Some seemingly extraneous activities are not bureaucratic at all, and actually have important downstream effects.  For example: Updating the policies and procedures is a thankless task and yields no immediate benefit lacking any personnel changes.  But attrition is seldom an isolated  event (it’s human nature to move on when your friends move on).  When a significant turnover occurs, an excellent set of policies and procedures will help hold down the fort.

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The Back Office Mechanics Blog by Nancy Wu is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.

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