The Damaging Effects of Bureaucracy:
I will disguise this story enough to avoid embarrassing the organization that experienced the damaging effects of sub-optimizing. Somebody had an idea for more "efficiency."
Let’s say it was a large telephone company, and one day someone counted up the number of copiers in the 25-story building, and found that there were 118 copiers spread throughout the entire central office building. Eager to be "efficient" and desiring to be a hero, this person presented a proposal to management to replace the 118 different kinds and sizes of machines with 2 "power copiers" in a copying department. The proposal showed how the new copying department could be run by two operators and a supervisor. It would use less space, and would save each secretary in the organization an estimated 14 minutes per day, which was the equivalent of 16 people saved, etc., etc.
So, without knowing it, the organization was off and running with a perfect example of optimizing a sub-function.
The company installed the copying department on the seventh floor, picked up all 118 copiers and began saving money.
The first day in operation, the copying department was besieged by secretaries (and other people) who wanted copies made, and there was a long line. Secretaries were waiting up to an hour to place their orders for copies. Within a day or two, everyone was aware that there were problems. So, they decided that all secretaries would "mail" their requests to copying, via inter-company mail, and the mail room would bring the finished copies back when they were done.
The first problem with that was that the mail room was only making two trips a day around the building, so turn-around on copies went to a minimum of two or even three days. So, they decided to add four people to the mail room, and double the number of trips around the building. This brought turnaround to two days "guaranteed."
Well, it turns out that two days was too long for certain "emergency" items, and for certain "high level" people, so a red tag was established to give certain items 24-hour turnaround. By now, however, there were two more people in the copying department. One was organizing inputs so the operators could keep on copying, and the other person took the outputs and addressed them to the people who needed them.
The next problem was that things started getting lost. People would send things to copying and never get anything back. And, other people were getting copies they hadn’t ordered.
So, the copying department decided to add a series of controls to ensure nothing got lost, and a time stamp, because people were complaining that they weren’t getting a two-day response.
This all required two more clerical people in the copying department to handle the complicated forms that were introduced so that nothing ever got lost.
By now, secretaries and their bosses were up in arms. They didn’t trust the copying department with anything important, so for important items, they would stop by quick copy shops on the way home. And, a couple of departments pooled their petty cash to buy home-style, inexpensive copiers that they would use for urgent items.
Pretty soon, the accounting department became aware of the new "outside" copying costs, and individual departments were attempting to assign the outside copying costs to the copying department.
The copying department then went to war (with their own customers!). They got a senior VP to issue a mandate that all personal copiers would be taken out immediately, citing some vague danger of liability or safety violations. In addition, the mandate stated that all "outside" copying would cease, and that the company would not pay for it.
In an attempt to mollify the angry customers, the senior VP authorized a full second shift of operators and clerical people in the copying department, with a new guarantee of 24-hour turnaround time for everybody.
Well, I could go on with this story, because things actually got worse than this. By the end, every manager of any stature had a personal copier at home. There was a 24-hour quick copy shop down the street that would make copies, but issue invoices for "office supplies," that quickly became one of the top ten copy shops in the country for the franchisee.
And, worse than all of that, meetings couldn’t be called on anything less than a one-week schedule to ensure that everyone got notified, and copies of the agenda were prepared, etc.
Now, you might think that all of this chaos would generate somebody who would say, "this isn’t working, let’s go back to the old way." But no. Sadly enough, this was a very bureaucratic organization (as if you hadn’t guessed), and the powers that be were reluctant to admit they had made a mistake, so they just persisted.
What finally solved the problem was another bright young "efficiency" person who examined the situation and prepared another proposal to management. By now there were 17 people full time in two shifts in the copy department. The new proposal suggested that the 17 people department be disbanded, and replaced by 94 optimally situated copiers (of the same brand, size, and capability, because standardization was highly prized). The justification was the net savings of over $100,000 per year. So, in this case, the centralized copying department was disbanded, the 94 optimally-situated copiers were installed (all of the same size, brand and capability), and once again the organization was able to resume its normal work in a normal way.
• It is de-bureaucratizing to take sub-optimized functional departments and disband them, re-deploying the people into the line units where they will be mission driven, not function driven. Here are some units to consider: purchasing, personnel, fleet, copying, MIS, training, strategic planning, budgeting, and research and development.
In a bureaucracy, departments or sub-units are formed and are allowed to, or even directed to, focus on a sub-optimal mission. "Your mission, in the copying department, is to handle all of the organization’s copying needs at the lowest possible cost."
"The copying department’s mission is to ensure that the organization’s quality and customer satisfaction mission is achieved by ensuring that everyone who needs a copy gets one, as quickly and responsively as possible, with responsible regard for costs."
This mission statement must be clearly understood to mean that if the copying department doesn’t give its internal customers better service than they would get if they ran their own copying, then the unit will cease to function and copying will be decentralized. In addition, the performance of the copying department, and future budget allocations, will depend not on satisfying the manager the sub-unit reports to, but instead on feedback from the customers of the copying department.
Read "Busting Bureaucracy."
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