Beating Back Bureaucracy - Killing the weeds that stifle the growth of your organization
Bureaucracies are inherent in large organizations. The number of layers from lowest level employee to the top is the order of that company's bureaucracy. Too high of an order of bureaucracy results in too much delegation and not enough action or results.
Bureaucracy exists in all large corporations...How do you fight it?
Let's take a look at an example and see what you would do:
You are responsible for a large department. Currently there is a situation that is happening that will cost your company a lot of money, but the problem is that it is highly political. If you take a stand on it and deal with it you risk facing retaliation, but if you play along you get your bonus. Your bonus payoff is based upon your actions and the actions of the rest of the organization... What will you do?
Payoff Table for Political Decision
The way to read this table is as follows:
There is a bonus amount of $200K to be split amongst the organization. If you or the rest of the organization take a stand on the issue your bonus payout is dependent on the strategy of the other party. For example if you take a stand and the rest of the organization plays along the bonus payout ($0K, $200K) means that you will get nothing ($0K) and the rest of the organization will get $200K. Now if both parties take a stand the bonus payout is ($50K, $50K) and this is due to the fact that companies in general tend to hate to deal with political issues and due to dealing with the issue everyone's bonus will be less.
So what should people do? And more importantly what will people in general do? Let's look at Game Theory and see what it tells us:
DEFINITION: Nash Equilibrium If there is a set of strategies with the property that no player can benefit by changing their strategy while the other players keep their strategies unchanged, then that set of strategies and the corresponding payoffs constitute the Nash Equilibrium.
The Nash Equilibrium tells us that in general all people will choose to play along, because you can't get a better outcome regardless of the other parties choice. For example, if you thought about taking a stand you would quickly realize that if the rest of the organization played along you would lose your bonus. Conversely if you played along at worst you will have $100K, and at best you will have $200K.
But what happens if everyone does this?
Playing along is a short term strategy. If everyone plays along then organizations begin to deteriorate from within. Those that take a stand will be less inclined to do so in the future, or will leave for other companies.
Bureaucracy is self healing. It is easier to do nothing than to take a stand on an issue.But in order for the culture of an organization to change, a couple of people need to spark the change and take a stand.While it is self healing, it often costs a company more in the long run and is not self-sustaining for the long run.
All of this is highly dependent on corporate culture. If enough people take a stand there is a chance for change. If not nothing will change until it is too late.
Organizations need leaders within their company to tackle these problems. Find out what kind of Leadership profile you have in fighting bureaucracy:
Click here to take the Leadership Profile Quiz
Summary
If not, you deal with the consequences!
Bureaucracy exists in all large corporations...How do you fight it?
Let's take a look at an example and see what you would do:
You are responsible for a large department. Currently there is a situation that is happening that will cost your company a lot of money, but the problem is that it is highly political. If you take a stand on it and deal with it you risk facing retaliation, but if you play along you get your bonus. Your bonus payoff is based upon your actions and the actions of the rest of the organization... What will you do?
Payoff Table for Political Decision
The way to read this table is as follows:
There is a bonus amount of $200K to be split amongst the organization. If you or the rest of the organization take a stand on the issue your bonus payout is dependent on the strategy of the other party. For example if you take a stand and the rest of the organization plays along the bonus payout ($0K, $200K) means that you will get nothing ($0K) and the rest of the organization will get $200K. Now if both parties take a stand the bonus payout is ($50K, $50K) and this is due to the fact that companies in general tend to hate to deal with political issues and due to dealing with the issue everyone's bonus will be less.
So what should people do? And more importantly what will people in general do? Let's look at Game Theory and see what it tells us:
DEFINITION: Nash Equilibrium If there is a set of strategies with the property that no player can benefit by changing their strategy while the other players keep their strategies unchanged, then that set of strategies and the corresponding payoffs constitute the Nash Equilibrium.
The Nash Equilibrium tells us that in general all people will choose to play along, because you can't get a better outcome regardless of the other parties choice. For example, if you thought about taking a stand you would quickly realize that if the rest of the organization played along you would lose your bonus. Conversely if you played along at worst you will have $100K, and at best you will have $200K.
But what happens if everyone does this?
Playing along is a short term strategy. If everyone plays along then organizations begin to deteriorate from within. Those that take a stand will be less inclined to do so in the future, or will leave for other companies.
Bureaucracy is self healing. It is easier to do nothing than to take a stand on an issue.But in order for the culture of an organization to change, a couple of people need to spark the change and take a stand.While it is self healing, it often costs a company more in the long run and is not self-sustaining for the long run.
All of this is highly dependent on corporate culture. If enough people take a stand there is a chance for change. If not nothing will change until it is too late.
Organizations need leaders within their company to tackle these problems. Find out what kind of Leadership profile you have in fighting bureaucracy:
Summary
- Hold people accountable... Really!
- Reduce the order of bureaucracy within an organization.
- Reward those who do the right thing for the company, and punish those that don't.
posted by Soren Burkhart at 9:45 AM
1 Comments:
The Nash Equilibrium, a concept from analysis of auctions, gets stuck in local optima. Other algorithms, such as simulated annealing and it's Boltzmann Equilibrium, can generate a near-global optimum.
The fallacy of Nash is that it is a "greedy algorithm." Bureaucratic followers seek immediate gain--they get stuck with Nash and local optima. But leaders take a risk. For them, life isn't a sprint, it's a marathon. Hopefully those leaders truly find a global optimum, but they could die along their long run. Hence, leaders must be strong.
A leader-with-followers (a general?) then must add the ability to create and explain local optima for their compatriots. They must simplify a complex vision, so followers understand and can work for their own best interests.
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