The Busting Bureaucracy Hackathon

Phase 3: Ideas for Busting Bureaucracy (Part 1)
gary-hamel's picture

The Dawn of Distributed Leadership

By Gary Hamel on June 24, 2014

If you’ve spent a lifetime accumulating and wielding bureaucratic power; if you’ve calibrated your career progress by the steps you’ve taken up the corporate ladder, or by the number of people who work for you, or the perks you’ve been awarded, or the scope of your authority, then envisioning a world in which leaders report to the led may be a bit daunting.

If you’ve spent a lifetime accumulating and wielding bureaucratic power; if you’ve calibrated your career progress by the steps you’ve taken up the corporate ladder, or by the number of people who work for you, or the perks you’ve been awarded, or the scope of your authority, then envisioning a world in which leaders report to the led may be a bit daunting.

People who have power are often reluctant to give it up.  People who are “in control” are often unwilling to cede control.  Take the debate over the “consumerization” of IT as a case in point.  I get it:  there are vexing security and support issues that arise when employees bring their personal devices and apps to work.  Nevertheless, I find it troubling that many CIOs seem to regard the idea of “Bring Your Own Device” as an annoying technical problem rather than as an amazing opportunity to enhance empowerment.  Yes, “security” and “openness” are often at odds, but this is exactly the sort of take-for-granted trade-off that needs to be rethought.  Rather than seeming themselves as the enforcers, IT execs and managers of all sorts need to see themselves as enablers.

The Web has already engendered a dramatic shift in bargaining power from producers to consumers.  What’s coming next is an equally dramatic and irreversible shift in power from institutions to individuals.  BYOD is just the beginning. If your organization is going to attract and engage the most creative individuals in the world, then as a CIO you have to think about how you might help facilitate SYOG—Set Your Own Goals, DYOJ—Design Your Own Job, PYOC—Pick Your Own Colleagues, AYOE—Approve Your Own Expenses, or CYOB—Chose Your Own Boss. 

More generally, you should ask yourself:  What sort of value could I create for my organization if I were as committed to reinventing our management model as I am to further optimizing the operating model, or the business model?  What would happen if I and my team fully exploited the revolutionary potential of big data, cloud services, mobile technology and the social web to dismantle formal hierarchy and radically empower every associate and team member?  And where would I start in doing so?

Inevitably, and necessarily, more and more of the work of managing and leading—the work of setting priorities, making strategy, reviewing performance, divvying up work and allocating rewards—is going to get distributed to the edges of the organization.  Every organization will discover, as some already have, that it’s quite possible to manage without managers. You can escape the management tax.

If this seems like a far-out fantasy to you, look again, more closely and more deeply, at the social revolution that’s been gathering pace on the Web.  The Internet has proven to be an almost ideal medium for social experimentation.  The list of web-spawned social technologies is already impressive (crowdsourcing, social graphs, microblogging, tagging, opinion markets, mash-ups, peer ratings, peer production, crowdfunding, social curation), and new socially-enabled technologies are emerging almost daily.

Problem is, most CIOs and CEOs still look at these technologies through one of two lenses:  either as a means for connecting more intimately with customers (by, for example, mining sentiment data from social media), or as a way of increasing the efficiency of internal communication (by deploying social platforms like Chatter and Jive.)  In both cases, social technologies are seen as “bolt-ons”—either to existing marketing practices or communication channels.  Rarely are they seen for what they are—the building blocks of a comprehensive and radical alternative to our overly-centralized management structures are overly-rigid management processes.

It’s easy to get lost in the buzzing, whirring confusion of the social web, but when you step back, there are some clear patterns:  Users are calling the shots.  Choice and freedom are expanding.  Communities are proliferating.  Individuals are following their passions.  Boundaries are disappearing.  Knowledge is diffusing.  Hidden talents are getting discovered.  Amazing quantities of human intellect and passion are getting released.

And yet, most CEOs and CIOs are still stuck inside the old paradigm; they’re tweaking when they should be overhauling; tweeting when they should be transforming.  It’s disheartening to go inside one of America’s youngest and fastest growing IT companies and discover it already has 600 vice presidents. Like virtually every other start-up before it, this young company is slowly being encircled by the tentacles of bureaucracy.  The ratio of managers to first-line associates is going up.  Decision cycles are getting longer.  Staff groups are growing and accumulating more power.  Rules are proliferating.  And legal has to sign off on everything.

I know how this movie ends.  It ends with a company that is still amazingly competent, but just not very relevant.  Opportunities have been squandered, margins have shrunk, the best brains have left, those who are left are mostly going through the motions.  Inertia has won.

Big companies have a well-deserved reputation for being blinkered and ponderous.  The problem, though, is not size per se, but the bureaucratic structures and processes that come with size.

The web, on the other hand, has demonstrated conclusively that an organization doesn’t have to be centralized to be robust, that it can be large but not bureaucratic, efficient but not inflexible, disciplined but not disempowering.

The web has unleashed human capacity in ways that few of us could have imagined a decade ago.  It’s an extraordinary multiplier of human capability.  Bureaucracy isn’t.  It allows us to do some pretty extraordinary things, like manufacturing 20 nanometer computer chips, but it squanders prodigious amounts of human talent. 

In a bureaucracy, obedience, diligence and expertise are highly valued; initiative, innovation and passion—not so much.  Nevertheless, it’s precisely these latter capabilities that are most essential to success in today’s creative economy.  No wonder, Richard Florida, in his book, The Rise of the Creative Class, observed that “the biggest issue at stake in this emerging age is the tension between creativity and organization.” 

As human beings, we’re amazingly resilient, inventive and passionate; but our organizations mostly aren’t.  Our bureaucracy-infused management models has left us with organizations that are less capable than the people who work within them.  Therein lies the imperative and the opportunity:  creating organizations that are fit for the future, by creating organizations that are fit for human beings.

If you believe in the transformational power of IT, you have to face the fact that tomorrow’s winning management practices and processes will be as different from their bureaucratic predecessors as Skype is from “plain old telephone service,” as Amazon is from a strip mall, as Twitter is from a postcard.  And once you’ve accepted this truth, you’ll have to bring all of your imagination and all of you your heart to the challenge of building a “post-bureaucratic organization.” 

That’s what we’ve been doing with a community of progressive thinkers, practitioners and technologists in the “Busting Bureaucracy Hackathon.” Join us.

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chary-chigurala's picture

A fabulous discussion topic. Bureaucracy is a system of governance, which is a necessary evil that comes along with 'organisation'. As we know, 'organisation' is one of the greatest societal innovations to bring together the scarce resources and produce more. But when we do too much of organisation, it leads to bureaucracy. Although the rise of 'creative class' is a welcome step, can we eliminate the bureaucracy altogether?. Perhaps not. But we can certainly do a fine balancing act. The balancing act becomes even more difficult when it comes to IT, where new technologies are being developed almost on a daily basis. Can a firm invest in any new technology that comes in its way? How does it decide which idea is worth pursuing? Therefore, to beat bureaucracy, the real question is 'How can the creativity be governed efficiently?". In the BYOD example, we should be able to let staff bring their own devices without adding too many layers of processes to protect company data, Intellectual property. In today's organisation, we are not able to achieve this as we rely on multiple people for multiple skills (ie, technical, finance, business etc) to mitigate risks. Perhaps, multi-skilled staff with simple processes may offer a part solution in beating bureaucracy.

Liked by Edna Pasher
edna-pasher's picture

Yes!
It is about balancing order and chaos.
It has a name too - THE CAORDIC ORGANIZATION
Look here:
http://www.amazon.com/One-Many-VISA-Chaordic-Organization/dp/1576753328

edna-pasher's picture

Look here:
Stanley McChrystal: The military case for sharing knowledge | Talk Video | TED.com
http://www.ted.com/talks/stanley_mcchrystal_the_military_case_for_sharin...

Even the military understand they need a major culture change - beyond bureaucracy!
Enjoy!

erwin-pfuhler's picture

Gary,
the bureaucratic models rewards the status quo. Successors in management positions have to be like their predecessors. They thrive for more of the same kind. What is already good has to be made better. Thinking occurs in a linear way. The journey starts in everyones mind. As long as most companies do not feel pressure, they will think of these new ideas presented her, merely as of some fancy concepts. Nevertheless it is amazing to be a part of this community.

martin-cawthorne-nugent's picture

Gary, I like your positioning of bureaucracy relative to creativity and passion - and the quote from Richard Florida.
Key things for me

(1) There are two separate questions:-
Why do we manage?
(How) do we manage?

The answer to the first question is fixed in the corporate psyche, so that the answer to the second question becomes the context for the first.

I do wonder if the answer to "why" question above is to achieve and sustain a dynamic balance between creativity and risk - on many different levels. The answer to "how" categorizes bureaucracy at one end of a spectrum, here risk-taking behaviour is suppressed and the pace of creativity slows to a sedate stroll. In this context managers who are perceived to avoid risk are favoured over those who are seen to embrace it. At the other end of the spectrum there is creativity with no consideration of the risks associated with the results of that creativity - bring in regulation, bureaucracy and pushing it back along the spectrum.

We need to work out how to bring together individual creativity with accountability for risk (or more correctly the consequences of risks that materialize). The IT that is so fundamental to the changes that you describe does mean that the results (consequences) of creativity scale very VERY quickly and that is what is so threatening to traditional bureaucracy. There'll be ways of doing this but we need more work to be done - it's a fascinating domain - thanks for a thought-provoking blog.

jack-sim_1's picture

Your Hackerthon is really giving me great confidence of the End of Bureaucrazy and I am particularly impressed by Gary Hamel.

May I add one more piece needed to change the context:

First, we need to redefine the meaning of success so that we can have equitable distribution of wealth not as a dogma but as an aspiration that everyone wants to achieve. The New Billionnaire will be the ones who improves the lives of a Billionnaire people. This is more relevant than celebrating people hoarding their money and making us all jealous and feeling small while prpoblems remain unsolved. The 'Uncool' status of the Individualistic Billionnaire vs the Cool Neew Billionnaire will change the game by changing the Holy Grail.

This new definition means anybody including the bureaucrats can be a New Billionnaire. We'd have a 2 stage life: Gaining personal sustenance while helping others do the same. This is a different model as Communism or Socialism which does not consider human nature. In this new definition, it is our aspiration to clock the number of lives saved rather than number of dollars gained.

Hope this contribution can be added into the conversation.

aaronbrook's picture

I especially like such expresses as "how you might help facilitate SYOG—Set Your Own Goals, DYOJ—Design Your Own Job, PYOC—Pick Your Own Colleagues, AYOE—Approve Your Own Expenses, or CYOB—Chose Your Own Boss"

Liked by Frank Calberg