Businesses must fight a relentless battle against bureaucracy
Aug 2nd 2014
PETER DRUCKER once observed that, Much of what we call management consists of
making it difficult for people to work. Nine years after the management guru s
death, his remark is truer than ever: employees often have to negotiate a mass
of clutter from bulging inboxes to endless meetings and long lists of
objectives to box-tick before they can focus on their real work. For the past
50 years manufacturers have battled successfully to streamline their factory
floors and make them lean . Today, businesses of all types need to do the same
in their offices.
The most debilitating form of clutter is organisational complexity. The Boston
Consulting Group (BCG) has been tracking this for a representative sample of
companies in the United States and Europe since 1955 (when the Fortune 500 list
was created). BCG defines complexity broadly to include everything from tiers
of management to the numbers of co-ordinating bodies and corporate objectives.
It reckons that, overall, the complexity of organisations has increased sixfold
since then. There has been an explosion of performance imperatives : in 1955
firms typically embraced between four and seven of them; today, as they strain
themselves to be kind to the environment, respectful of diversity, decent to
their suppliers and the like, it is 25-40.
A second form of clutter is meetings. Bain & Company, another consulting firm,
studied a sample of big firms, finding that their managers spent 15% of their
time in meetings, a share that has risen every year since 2008. Many of these
meetings have no clear purpose. The higher up you go, the worse it is. Senior
executives spend two full days a week in meetings with three or more
colleagues. In 22% of these meetings the participants sent three or more
e-mails for every half an hour they spent sitting in the room.
These e-mails constitute the third form of clutter. Bain estimates that the
number of external communications that managers receive has increased from
about 1,000 a year in 1970 to around 30,000 today. Every message imposes a
time tax on the people at either end of it; and these taxes can spiral out of
control unless they are managed.
Some clutter is inevitable. The point of companies is to get people to achieve
collectively what they cannot do individually, so some meetings and memos will
be needed to co-ordinate them. Complexity may often be the price of success:
companies that have grown to great size and operate in many markets face far
more complicated problems than smaller ones operating on home turf. But Drucker
was surely right that co-ordination has a tendency to degenerate into clutter.
Meetings multiply. Managers build empires. And clutter feeds on itself. Bain
calculates that adding a new mid-level manager creates enough work for half an
assistant. Adding a new senior vice-president creates enough work for one and a
half assistants.
Clutter is taking a toll on both morale and productivity. Teresa Amabile of
Harvard Business School studied the daily routines of more than 230 people who
work on projects that require creativity. As might have been expected, she
found that their ability to think creatively fell markedly if their working
days were punctuated with meetings. They did far better if left to focus on
their projects without interruption for a large chunk of the day, and had to
collaborate with no more than one colleague.
One solution to clutter is a periodic spring-cleaning to sweep it out. Big
companies need to have campaigns against internal complexity: Jeffrey Immelt,
General Electric s boss, is seeking to introduce a culture of simplification ,
as part of a plan to cut the giant conglomerate s overheads from a peak of
18.5% of revenues in 2011 to 12% in 2016. Joe Kaeser, his counterpart at GE s
archrival, Siemens, is abolishing a whole management tier and reducing the
number of divisions below it. When Ford s previous boss, Alan Mulally, took
over in 2006, he called for an audit of all its meetings. He replaced meetings
week five days each month in which executives held non-stop gatherings with
one tightly scheduled weekly meeting at which managers are under orders to cut
the crap. Mr Mulally s successor, Mark Fields, had to prove himself first by
chairing those meetings efficiently.
Spring-cleaning needs to be reinforced by policies to stop clutter accumulating
in the first place. Though it may seem obvious, Intel, a chipmaker, felt the
need to impose a rule saying: no meetings without a clear purpose. Lenovo, a
Chinese computer-maker, lets its staff halt meetings that are going off-track,
in the same way as Toyota, a Japanese carmaker, gives production workers the
power to stop assembly lines when they spot problems. Bain says a manufacturer
it studied made savings equivalent to cutting 200 jobs by halving the default
length of meetings to 30 minutes and limiting to seven the number of people who
could attend.
Some employers are seeking ways to let staff at least manage the clutter, if
not reduce it. Intuit and Atlassian, two software firms, offer workers a
regular quota of clutter-free time. Volkswagen has spared its German staff from
having to read work e-mails after hours and even BCG has introduced rules on
when its consultants are entitled to go offline in the evenings.
Wasting time, wasting money
The best way to institutionalise decluttering is to force managers to justify
any bureaucracy they introduce. Seagate Technology, a data-storage company, and
Boeing, an aircraft-maker, both hold their executives accountable for the
organisational load that they impose on their subordinates in terms of
meetings, memos and initiatives, and measure them against their peers. As Bain
points out, the most valuable resource that many companies have is the time of
their employees. And yet they are typically far less professional about
managing that time than they are at managing their financial assets.
From the print edition: Business