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krijn-van-der-raadt's picture

Keep bureaucracy creep out of your startup or lose

I see bureaucracy in my organization in... 

Startups are supposed to grow, and grow fast. Growth means hiring more and more people, and bureaucracy creep is guaranteed to happen along the way, unless you pay close attention to it. You may even welcome it, thinking it will solve your growing pains, until you finally realize that it doesn't, but it did kill your competitive edge. Don't fall into the trap. We narrowly escaped it. There are milestones in a company's lifespan that can trigger new bureaucracy: Your first (ex) employee-initiated lawsuit, your 50th employee (if you're in California), your first serious product issues, or expanding your product portfolio. You will find yourself bringing in legal advisors, HR professionals, QA experts, and program managers. You probably try to pick people with experience working at larger companies, because they're going to help you grow, right? If you don't watch it, they will bring with them bureaucracy, and you might end up losing the things that made you agile and nimble: your competitive edge. The truth is that dealing with liabilities and risk is difficult and it takes courage not to hide behind the best-practices bureaucracy. Planning the work related to a growing number of products and by a growing team of designers and engineers is hard, and it's easy to fall into the gated-planning-process trap. Aside from slowing everything to a grinding halt, this bureaucracy will suck the life out of your most creative people. You will end up with just the people who can follow rules, and lose the people who might create your next break-through product. Don't fall into the trap.

Bureaucracy makes my job harder or easier by... 

A growing company does require you to take action: A team of 50 can't work the same way as a team of 5. You will need some process and organization, but you don't need bureaucracy (for everything). It is entirely possible to have (formal) processes without the downsides of bureaucracy. Take for example hiring. If you are hiring software engineers in California, you have quite a challenge ahead of you. Salaries are high and rising, because demand is high, and supply of good developers is limited. You have to adhere to California labor law, but you also have to take "team fit" of your applicants into account. You probably have a lot of people involved: a recruiter (internal and / or external), a hiring manager, an HR professional, and various team members to interview every applicant, in order to meet everyone's needs. You have to decide and act quickly, because your applicant has 3 other offers. But you can't act in haste, because you are making an important and expensive decision (recruiting fees are high). The solution of course is not bureaucracy, but what I call institutionalized collaboration. Instead of hiding behind procedures and building systems that enforce them, you make sure all stakeholders get to control what's important to them, and that there are warm transfers from team to team (people talking to each other, rather than just a button click). At certain points in the process you use technology to record approvals, but you make sure it is done easily and quickly. We use a pretty simple system that sends an email with a link to a web page with 2 buttons (approve / deny). You can click that from your phone when you're on the road or in a meeting within 5 seconds. Of course the HR professional and internal recruiter do a lot of work to deal with the formalities of a fair and compliant hiring process, but that's mostly behind the scenes from the perspective of the hiring manager. They also help the hiring manager through the process rather than hiding behind it. Most of all, they quickly respond to exceptions if they occur; they don't get stuck deer-in-headlights if something doesn't fit the process. And if we find a problem in the process itself, we can easily change it, because a lot of it is not hard-coded into a system. It's not perfect, but it's the right kind of solution for our growing company: process without bureaucracy.

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chris-grams's picture

Hi Krijn-- You have made a lot of really smart observations here, but I especially like this part: "It is entirely possible to have (formal) processes without the downsides of bureaucracy." and this part "The solution of course is not bureaucracy, but what I call institutionalized collaboration."

I very much agree with you that this idea of "institutionalized collaboration" is key. How do you make sure collaboration (and clear communication!) are part of the *culture* vs. part of the "rules." If we rely on bureaucracy to achieve collaboration and communication, people often participate because they have to, because it is a part of the required process vs. because they *want* to.

The difference between "have to" bureaucracy and "want to" culture is often subtle--and some people might not even notice the difference at first...

Really smart post!

jim-stikeleather's picture

Chris - I agree with all you said. I had another thought - is some ways the issue is the same as the dynamics between a formal business (or worse government meeting) and social media. Dr. Klein at MIT has tried to address the issue of the "wild west" of social media to enable something like a directed institutionalized collaboration. It is called Deliberatorium and is a project at MIT Center for Collective Intelligence. Krijin and Chris - maybe there are insights to be gleaned from it?

krijn-van-der-raadt's picture

thanks! You are absolutely right about the difference of wanting to vs. having to be part of something. That is the key. Bureaucracy enforces that certain people are part of a process, but quite possibly reluctantly. Creating the kind of environment where people actually want to work together to solve problems is really hard, so people often fall back on bureaucracy.

graham-douglas's picture

To work together people need to have a common basis for communication. The lack of this is being exacerbated by growing specialisation. That is why I offer a low-cost course in science-based Integrative Thinking and Integrative Problem Solving which everyone in an organisation can learn quickly and practise in all aspects of their work. It is outlined and available at www.integrative-thinking.com .

jim-stikeleather's picture

The Tooth to Tail Ratio is a military term that refers to the amount of military personnel ("tail") it takes to supply and support each combat soldier ("tooth"). While both "tooth" and "tail" soldiers may find themselves in combat or other life threatening situations "tooth" soldiers are those whose primary function is to neutralize the enemy. The ratio is not a specific measure but rather a general indication of an army's actual military might in relation to the resources it devotes to supply, upkeep, and logistics. In business terms – value creation versus bureaucracy. I have always suspected that this more than anything else explains the success of start ups versus entrenched companies. Key is balance - where and how have special forces or guerrillas consistently defeated fixed formations and what can we learn from that.