In Italy, but also in the world, we have a problemactually two. Bureaucracy and the bureaucratic way of thinking. The problem is enormous, because it is infiltrating.
Pure reason, practical reason, logical reason have been subsumed into bureaucratic reason. A homogenizing, standardizing, obfuscating, enveloping, self-referring and ultimately castrating system of thought.
The bureaucratic system of thought, on which Kafka built his poetics, not only applies in the administration of common things or in interpersonal relationships themselves, but has become the dominant system of thought at all levels, even in organizations. By now we look at work with the filter of bureaucratic or pseudo-legal thinking. None of those postulated by the great classical philosophy or by the great thinkers of the nineteenth and twentieth centuries (the utilitarian one, the one of the categorical imperative, the classist one, the one of ignorance) is no longer in action. There is a bureaucratic filter.
We could paraphrase the incipit of Social contract of Rousseau ("Man is born free and everywhere he is in chains") with "Man is born and everywhere he is chained by bureaucracy". In the same way, we could paraphrase the well-known motto of Marx and Engels ("The proletarians have nothing to lose except their chains") - which deliberately develops Rousseau's - with "Citizens have nothing to lose but their bureaucratic chains», in a forthcoming revolution… each one puts his own adjective.
The humanocracy
For me it is Humanocracy. Humanocracy is the nemesis of bureaucracy. It is a formidable and disruptive concept because it means zero bureaucracy, zero bureaucratic thinking, zero ossification, 100 per 100 liberation.
This term was coined, and a book dedicated to it, by Gary Hamel, professor at the London Business School. According to the "Wall Street Journal" he is the most influential business thinker in the world.
The book opens with these words:
What prevents our organizations from growing and adapting to an increasingly uncertain and unpredictable world? What makes them incapable of innovating, identifying danger, seizing opportunities? What keeps the people who work there on a daily basis, what undermines their creativity, their desire to fulfil? There is only one answer to all these questions: bureaucracy.
Far from being a pathology exclusive to the public sector, bureaucracy is in fact the most widespread social structure on the planet.
Couldn't have said better.
This is the first paragraph of the second chapter "Bureaucracy in the dock".
Below is an extensive excerpt from Humanocracy. Companies as extraordinary as their people, by Gary Hamel and Michele Zanini with the translation of Diego Tronca, Ayros Edizioni 2021 (in paper and digital). Already available on all online platforms and in city bookstores
The organizational design
Dismantling the bureaucracy is a huge challenge. Before accepting it, it is necessary to convince oneself of the fact that the organizational handicaps described in Chapter 1 of this book are precisely attributable to bureaucracy. In this chapter we will present the articles of this impeachment. How do the archetypal characteristics of bureaucracy — stratification of decision rights, formalization of boundaries between units, specialization of roles and standardization of practices — undermine adaptability, innovation andcommitment corporate? Why must the bureaucracy be deposed? Why is this a cause worth fighting for?
Centralize?, even not
Try asking someone to draw a drawing of their organization and you will almost certainly get the classic pyramid structure diagram made up of lines and boxes. A fixed chain of command is one of humanity's most enduring social structures. It's simple, scalable, and seemingly eternal.
It is easy to believe that without a structure in which power proceeds from the top down, human action on a large scale is impossible. The principle of unity of command ensures clarity in the direction from which orders are coming. The precise definition of ley lines minimizes ambiguity. The stratified organization of decision rights makes it possible to balance power and competence. Without a formal hierarchy, there is anarchy, right? Well, that's not said.
Consider Project Atlas, one of four research initiatives built for the Large Hadron Collider. Project Atlas was launched in 1992, engaging more than 3000 scientists from 180 institutions in an effort to unlock the deepest secrets of the universe. To that end, the Atlas team built one of the most sophisticated machines ever built — a gigantic particle detector, 45 meters high and 25 meters wide, with more than 10 million components assembled deep in the soil of a bucolic Swiss village.
The right organizational design
In the early stages of the project, the Atlas consortium had difficulty finding the right organizational design. Given the novelty of the initiative, it was necessary to break down the detector design and development into several sub-projects that could be tackled by small groups of scientists. On the other hand, all these subsystems, and there were hundreds of them, had to complement each other in a perfectly harmonious way.
And therein lay the dilemma. While small, autonomous teams would excel at creative problem solving, they would struggle with high-level coordination. Conversely, a centralized organization might have worked better at integrating systems, but would have been overwhelmed by the sheer number of entirely new problems it would have had to deal with.
A top-down structure would also have met with resistance from fiercely independent scientists, whose expertise was crucial to the project's success.
Peer coordination
Ultimately, the consortium settled on a bottom-up structure that was founded on peer coordination, rather than being led by a group of senior project managers. Each subsystem had its own committee, which included all the scientists working on a particular aspect of the project.
Discussions within these committees were open and collegial, but could also be very heated. In the event of an impasse, the opposing groups discussed the problem in front of their colleagues who then voted on the option deemed best. When problems transversally involving several subsystems emerged, temporary working groups were organized to develop specific solutions.
For example, when the design of the main detector magnet showed that this component required more space than originally envisioned, resulting in less space available for other equipment, a task force was organized to devise a solution.
Without bosses you can do the same
Throughout the project, individual subsystem committees published real-time information about their progress, which was then commented online by relevant subject matter experts. At the strategic level, a collaborative committee handled major decisions. Each participating institution had a seat on the committee and a two-thirds majority was required to green light a decision.
Building the Atlas detector required large doses of leadership and creativity. What he didn't require is a pyramid structure. No one in the Atlas consortium had the power to issue orders. They were all colleagues and there were no bosses. Still, the Atlas detector was completed on time and on budget.
When an organization is faced with a large number of new problems, a top-down structure is likely to act as a bottleneck. As problems escalate, they pile up and stagnate before the office of senior leaders who often lack the expertise and readiness to make smart, quick decisions. Over time, arrears build up and the pace of decision making Slows. Layering is the enemy of speed.
A leader among pages
Another victim of centralization is proactive change. In a formal hierarchy, the power to initiate change tends to be concentrated at the top. Most breakthroughs require approval from above. The problem is, by the time an issue becomes big enough to get little attention from the boss, the organization is behind schedule.
In many ways—organizationally, culturally, and geographically—leaders are isolated from the fringes where new trends take shape. This isolation is exacerbated by obsequious underlings who have learned that there is no gain in spreading bad news. But most disturbingly, senior leaders are stuck in their outworn beliefs. And despite all this, they are expected to intercept the future. Vain hope.
The Microsoft case
Consider the Microsoft case. In the XNUMXs, Microsoft's "PC-centric" business model was the engine that catapulted the company into the firmament of big brands. However, in the following decades, Microsoft often found it difficult to keep up.
As with most latecomers, the problem wasn't lack of competence. In a myriad of races, Microsoft has been found on time at the starting line. At the deep levels of the organization, young teams pooled resources and built cutting-edge prototypes.
But only a few of these efforts have attracted top-tier sponsors. Most of the initiatives have languished, ignored, in the maze of the company. Others have been shut down by order imposed from above.
The case of the Bing search engine
The battle in the field of search engines is a typical example of this. In 2003 alone, five years after the launch of Google's search engine, Microsoft management set aside $100 million to develop a competing service.
For years Chris Payne, the young vice president appointed to lead the "Underdog" project had kept an eye on Google and had repeatedly tried to arrange a meeting with Bill Gates, president and chief software architect of Microsoft.
Unfortunately, by the time Payne landed the much-needed match, Google had built an insurmountable lead.
Ballmer's myopia
On other occasions, Microsoft's obsession with Windows has put a spanner in the works of aspiring innovators. In 2009, a year before the launch of Apple's iPad, a team at Microsoft pitched a prototype tablet to Steve Ballmer, who had taken over as CEO in 2008 from Gates.
The device, codenamed Courier, was heralded as "an astonishing take on the tablet" by a well-respected blogger who was given an early trial. Ballmer was less impressed. Why, he asked angrily, hadn't the team used Windows as the new device's operating system? Dissatisfied with the response, Ballmer ended the project.
Satya Nadella, by-by orthodoxy
In 2014, Satya Nadella succeeded Ballmer as Microsoft's third CEO. Since then, the company has enjoyed great successes, with a total shareholder return up to 450%. Finally free to admit what many employees and observers have known for some time now, Nadella publicly declared that one of Microsoft's biggest mistakes had been to "think of the PC as the fulcrum of everything for centuries to come".
Acting on this belief, Nadella reduced the influence of the Windows division by redirecting investments to Azure, Microsoft's high-growth cloud computing business. In 2018, the company underwent an internal reorganization with the disappearance of the Windows group, whose staff was absorbed by the Azure and Microsoft Office teams.
While Gates and Ballmer are credited with selecting a leader who would challenge Microsoft's stifling orthodoxy for the PC, their outdated worldview has long crippled the company.
They believed that to make money, you had to sell software licenses instead of offering software as a monthly service. They saw Chief Information Officers (CIOs) as their primary customers, not teams or individuals. To them, the telephone was just a telephone, not a pocket computer.
Ossification has a price: bureaucracy
In 2007, Ballmer stated that "there's no chance the iPhone will achieve significant market share — no chance." Twelve years later, Gates admitted that if it had been less short-sighted, Microsoft might have anticipated Android — a mistake that, in his estimation, had cost Microsoft a $400 billion loss in market value.
It's easy to blame Gates and Ballmer for Microsoft's missteps, but it's a misplaced accusation. The real culprit is bureaucracy. In a hierarchical organization, responsibility for setting strategy and direction rests with a small group of senior leaders. Those at the top are expected to be extraordinarily forward-thinking, curious and creative. In reality, this is often not the case.
The stratification of the bureaucracy
The role of emotional heritage
First, senior leaders frequently invest much of their emotional wealth in the past. The average age of a CEO of an S&P 500 company is currently fifty-eight, three years older than the 2008 figure. The average tenure is eleven years, the longest on record since 2002.
While veteran leaders may have the advantage of experience, they also carry the weight of legacy beliefs on their shoulders. Many of their beliefs about customers, technology and the competitive environment were forged years or decades ago and reflect a world that no longer exists.
Second, rank and humility are often inversely related. Power, as the late Karl Deutsch observed, "is the privilege of not having to learn." It is in this truth that we find the greatest threat to organizational resilience: the unwillingness or inability of senior leaders to regard their now worthless intellectual capital as irrecoverable.
This shortcoming would be less deleterious if subordinates felt entitled to challenge the dogmas of the C-suite, but most mid-level managers aren't prone to biting the hand that feeds them. Thus myopia percolates downwards, in the same direction in which authority is transmitted.
Bureaucracy is the killer of business too
An organization's ability to innovate should never depend on the ability of a handful of senior leaders to learn and unlearn, but in a bureaucracy that is often the case. The United States is the counterexample of this.
America's resilience has never depended too much on who sits in the Oval Office. On the contrary, the country's dynamism is the product of the principles enshrined in the nation's constitutive documents: aversion to autocracy, belief in human action, openness to immigration, respect for ethnic and religious diversity, a commitment to free speech and an enthusiasm for commerce.
America has been able to continually reinvent itself because millions of American citizens have had the freedom to reinvent themselves.
Someone jokingly said that America is a country invented by geniuses to be ruled by idiots — an observation that at times, worryingly, almost seems to hit the nail on the head.
Bureaucracies are designed by idiots
By contrast, bureaucracies appear to have been designed by idiots to be governed by geniuses. It would be great if all leaders had the innovation instinct of Steve Jobs, the political savvy of Lee Kwan and the emotional intelligence of Mother Teresa. Unfortunately, most do not have these qualities.
Despite being mere mortals, the bosses are often paid as if they were omniscient. Currently, the average salary for a CEO in America's 350 largest companies is $17,2 million annually, which is 278 times the annual salary of a typical customer relationship officer6. It is not clear whether with those millions much can be bought in terms of Vision. Various studies have revealed that the correlation between a CEO's compensation and relative stock performance is negligible or slightly negative. No amount of money can turn an executive into Iron Man o Wonder Woman.
There are no superhuman leaders
In an age of radical change, the foresight and ingenuity required to keep a large enterprise going exceeds that possessed by any single individual or small team—and the bar is rising ever higher. In short, bureaucratic structures demand more from leaders than they can give.
As our friend Vineet Nayar, former CEO of Indian IT giant HCL Technologies once said: "The idea of the CEO as captain of the ship is bankrupt." We need to stop looking for superhuman leaders. What we need are not extraordinary leaders, but organizations that know how to mobilize and monetize the everyday genius of "ordinary" workers.
In a complex world, organizations must have the flexibility to match each problem with the right mind. Unlike formal power, wisdom is partial; it is fluctuating and is conditioned by the problem at hand. Therefore, instead of a single fixed hierarchy, we need multiple dynamic hierarchies in which whoever is in charge depends on the problem at hand. We need organizations where it is possible to question everyone's opinion, where influence is the reciprocal of followers and from which incompetent leaders are excluded.
Only small teams are aligned
And what about alignment — the ability to get everyone to look in the same direction? How can unity of purpose be achieved without unity of command? First, alignment is overrated. Sure, it's important, but not absolutely so.
In a world filled with unexpected threats and opportunities, organizations must experiment with dozens, if not hundreds, of strategic options. There is always the risk of wasting effort on marginal initiatives, but the most dangerous risk is the shortsightedness of power.
Secondly, as we saw in the case of Project Atlas, human beings are perfectly capable of pursuing a common goal without a pharaoh to command them.
The Curse of Bureaucracy
Not surprisingly, our organizations are sluggish, incremental, and uninspiring. How could it be otherwise when the bureaucracy:
— places excessive trust in the opinions of leaders tied to obsolete models;
- discourages rebellious thinking;
— creates long delays between perception and reaction;
— stiffens organizational structures;
— imprisons leaders in loneliness and blinds them to opportunities;
— makes trade-offs suboptimal;
— frustrates the rapid redistribution of resources;
— discourages risk-taking;
— politicizes the activity of decision making;
— creates long and tortuous approval paths;
— misalignment of power and leadership ability;
— limits opportunities to make individual contributions;
— undermines the responsibility of personnel in direct contact with customers;
— systematically belittles originality.
Bureaucracy is demoralizing and debilitating, yet it persists. Instead of building human-sized organizations, we are still forging bureaucracy-friendly human beings.
From:Humanocracy. Companies as extraordinary as their people, by Gary Hamel and Michele Zanini with the translation of Diego Tronca, Ayros Edizioni 2021, pp. 25–32
Gary Hamel teaches at the London Business School. He has been listed by the "Wall Street Journal" as the most influential business thinker in the world. His books have been translated into over 25 languages.
Michael Zanini he is co-founder of Management Lab, an organization that develops technology and tools to create more resilient, innovative, and engaging companies. He was a consultant at McKinsey & Company and an analyst at RAND Corporation and holds graduate degrees from the John F. Kennedy School of Government at Harvard University and Pardee RAND Graduate School.
