Top-Down Solutions like Holacracy Won’t Fix Bureaucracy

At its heart, bureaucracy is just a real-life version of technical debt: a bunch of inefficient processes that ostensibly work but should be replaced with something better. Gary Hamel and Michele Zanini discuss for Harvard Business Review why it is so hard to remove, even when using the latest tactics.

For one thing, bureaucracy is so well ingrained in many organizations that people may not even realize that it is a problem. Second, “Since 1983, the number of managers, supervisors, and support staff employed in the U.S. economy has nearly doubled, while employment in other occupations has grown by less than 40%.” Nobody wants to create an efficiency that accidentally renders his or her job obsolete, let alone reduces the power of the title held.

The few companies like W.L. Gore that do seem to have gotten a hold on bureaucracy have accomplished the task through decades of learning and transformation. And how to get from point A to point B will differ for every organization. Many businesses might agree to just leave well enough alone in the face of such difficulties.

Zappos, often used as a great example of holacracy, has reportedly suffered “an unprecedented 30%” turnover as a result of that move. It arguably presents a “throwing out the baby with the bathwater” situation. Instead, Hamel and Zanini recommend less extreme tactics for reducing bureaucracy, such as taking advantage of the “hackathon” phenomenon:

Imagine an online, company-wide conversation where superfluous and counter-productive management practices are discussed and alternatives proposed. The output of such a conversation wouldn’t be a single, elaborate plan for uprooting bureaucracy, but a portfolio of risk-bounded experiments designed to test the feasibility of post-bureaucratic management practices… Now imagine a large organization running dozens of such experiments concurrently. Some hacks would fail, but the best of the rest would be replicated by units eager to reduce the costs of bureaucratic drag.

They wisely conclude that taking authoritarian efforts to increase employee autonomy sounds inherently wrong. You can view the full article here:

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