The Good and The Bad of Bureaucracy

This post is adapted from Mark Schwartz’s The (Delicate) Art of Bureaucracy: Digital Transformation with the Monkey, the Razor, and the Sumo Wrestler.

In a previous post I revealed how IT is the biggest, baddest bureaucrat on the block. But to overcome bureaucracy, we need to separate those of its aspects that are problematic from those that are not, and focus our efforts on the former. We must disengage from the metaphysical pathos and reengage in a particular way. Let’s now identify the actual bad stuff.

Why Bureaucracy is Bad

(1) Surprise!—It’s Inefficient

Despite Max Weber’s unbounded enthusiasm for bureaucracy’s efficiency, those of us who encounter it today are less keen. It is not actually effective at doing what it sets out to do. It’s not a rational way to organize. 

(2) Its Goals Are Displaced

Even if the rules and hierarchy are set up to further the goals of the organization, over time, the aims become less important; all that remains is adherence to rules and process.

(3) It Stifles Innovation

Employees in a bureaucracy have well-defined tasks. Since they’re assessed on performance of those tasks, innovations is just wasted effort with no reward.

(4) It Fosters Blind Spots

Safe within a framework of rules that legitimize their actions, employees become passive and stop trying to do what they know to be best. 

(5) It Dehumanizes

Bureaucracy substitutes mechanisms for ordinary human interaction. In it striving for impersonality—application of rules without regard to human considerations—it loses sight of the individual.

(6) It Oversimplifies

To make its rules general enough to apply in all cases, bureaucracy simplifies by abstracting only those characteristics that are relevant to a rule. In doing so, it disregards the true complexity of life as it is lived.

(7) It’s Not Enough

Bureaucracy, somehow, misses the point. By laying down in law exactly how the company should operate, it leaves out the part of business that has to do with inspiration and strategy. 

(8) It’s Coercive

Bureaucracy is a way to control employees based on the assumption that left to themselves, they’ll do the wrong thing. 

(9) It Petrifies

As value is displaced from goals to the rules themselves, the rules become a tradition and a bond that holds the community together. Once rules become rituals, changing them is tantamount to breaking apart the community. The rigidity with which rules are applied becomes a rigidity in the rules themselves.

(10) It’s Risky by Being Risk-Averse

Bureaucracy is a way to mitigate the risk of trying out newfangled ideas. Its slow, careful, managed pace of change is based on defining repeatable processes and refining them to the point where they’re emptied of risk and institutionalized as commandments.In a fast-changing environment, however, this makes them all the more risky.

Why Bureaucracy is Good

(1) Bureaucracy is Fair

Bureaucrats are required to put their own beliefs and biases aside and proceed purely on the basis of what benefits the organization. The intention is to use standard criteria to reduce the effect of personal biases.

(2) Formality and Role Definitions

Even if the business world is digitizing rapidly, there are still many jobs that require discipline, routinization, and process efficiency. it’s not that these roles don’t require innovation, but their innovation is generally related to efficiency and to continuous improvement of cost, quality and timeliness. Bureaucracy is ideally suited in this context.

(3) Size and Scale

Bureaucracy helps coordinate activities across units of a large enterprise by formalizing the interactions among them. It brings order to processes that can become chaotic and difficult to manage as the enterprise grows.

(4) Compliance and Grimaces

In an era when compliance frameworks are proliferating, bureaucracy provides an effective way to cope with them and keep auditors smiling. Bureaucracy, in this sense, is a factory within the organization whose product is compliance. That product has value: it lets the company operate in a regulated environment. It is a foundation for all of the other value the company produces.

(5) Persistence of Memory

When we optimize processes or solve problems, we memorialize our findings in a documented process, an SOP, or a manifesto. Formalized processes are precisely the specialty of bureaucracies. They’re also–no coincidence here—the specialty of information technologist who objectify know-how in equipment and software.

(6) Rational Results and Capitalism

Commercial entities need to satisfy investors by providing transparency into their operations. It’s the very impersonality of the market that makes entrepreneurship possible. For entrepreneurs and investor to risk their time and capital in a new venture, they must have some measure of security such as that provided by laws and they must now their efforts will have rational results.

(7) Green Eggs and Meaning

Rules are the background to our creative activity; they’re guardrails and frameworks that structure our efforts but don’t fully constrain them. Creativity is  facilitated by rules that provide a structure within which experts can exercise their skills.

Verdict: Bureaucracy is Not All bad

Bureaucracy is a reasonable path to accomplish certain types of goals. It can institutionalize best practices and give comfort to employees with highly routine jobs. The waste that typically attaches to bureaucracy is the main evil.