Gary Hamel and Michele Zanini at the MLab have recently estimated that an excess of bureaucracy costs the U.S. economy more than $3 trillion in lost economic output; a figure that rises to nearly $9 trillion when you include all of the 32 countries in the OECD. While the incentives for dismantling bureaucracy are substantial, so are the hurdles. Bureaucracy is ubiquitous, familiar and deeply entrenched. For those immersed in bureaucratic orthodoxy, radically flat organizations like W.L. Gore, Handelsbanken, Netflix, Morning Star, Buurtzorg, Nucor, Mainfreight, Reitan or Miles are more likely to be seen as weird exceptions than as valuable exemplars. For most managers, bureaucracy is not merely the “safe” choice, it’s the only choice.
The first step in dismantling bureaucracy is to expose just how much it is costing your organization. These costs are both direct and indirect, but mostly fall into the following categories:
• Bloat: Too many managers and management layers
• Friction: Too much bureaucratic busywork that impedes timely decision-making
• Insularity: Too much time spent on internal issues
• Disempowerment: Too many hurdles to taking initiative
• Conservatism: Too many disincentives for risk-taking
• Inertia: Too many barriers to proactive change
• Factionalism: Too much energy devoted to gaining and protecting turf
Not all of these costs can be easily measured, but that shouldn’t deter you from working to build a baseline. You need to calculate your organization’s BMI, or Bureaucracy Mass Index. How pervasive is bureaucracy within your organization? How much time and energy does it suck up? To what extent does it undermine resilience and innovation? Which bureaucratic processes are more trouble than they’re worth?
To get an initial read, please complete a brief survey below by Friday, October 21. Michele will present the initial results at the BBRT Meeting in London on October 27 and we’ll share them widely across our network shortly thereafter. To access the survey, please go to: https://www.surveymonkey.com/r/BureaucraticMass
