The Perils of Bureaucracies

In his new book, Why The Mighty Fall, Jim Collins took some time to explore the characteristics of a "good fit" for any given organization. (See Appendix 5: What makes for the "right people" in key seats?)

1. The right people fit with the company's core values
2. The right people don't need to be tightly managed
3. The right people understand that they do not have "jobs," they have responsibilities
4. The right people fulfill their commitments
5. The right people are passionate about the company and its work
6. The right people display "window and mirror" maturity

This concept spotlights an important principle that Collins says makes good companies great: First who, then what. In other words, key positions must be filled by the right people before worrying about what exactly it is that they will do.

The right people, he says, do not need to be told what to do. They're self-motivated because they are competent and they buy into the mission of the organization. If you restrict their creative and intellectual freedom or their ability to freely advance with needless regulations and bureaucracy, you drive the right people off, leaving in their place unmotivated people who do need to be tightly managed.

In Collins' words, "When bureaucratic rules erode an ethic of freedom and responsibility within a framework of core values and demanding standards, you've become infected with the disease of mediocrity." (emphasis mine)

The bureaucratization of American industry
When reading this -- although Collins did not make the point himself -- I could not help but thinking of it in light of the quasi-nationalization of the banks and GM -- industries that have already been historically been tightly regulated and strapped by layers of red tape.

Throw into the mix the fact that officials are using this opportunity to more tightly manage them to the point that the government is dictating to them how much they're allowed to advertise and how much they can pay executives, and you have a sure recipe for not only mediocrity, but taxpayer-subsidized mediocrity.

Permanent mediocrity
Worse, still, it's a mediocrity that cannot be replaced because people are not allowed to use their own resources to find a market-based solution -- the government is removing the resources of the resourceful to prop up the mediocre -- thereby ensuring its continuation through even more layers of bureaucracy that tend to drive out the very ones who could save it!

Bureaucracy, either institutional or inflicted by the government, cannot replace good, resourceful, people. It just replaces one's sense of responsibility with mundane tasks.

Systems and rules can definitely help an organization, but only as much as they reflect, rather than replace, the company's core values and the people's inspiration to fulfill them. - Cam Beck