Ditch Red Tape for Better Cooperation
Cooperation, the first problem for every CEO. Where the red tape of bureaucracy fails, culture is a powerful way to engage people and align work with your business purpose.
How do you get people to work together? This is the first problem for every CEO. Whatever your ambition – make chocolate biscuits, sell Swiss watches or offer ISAs and bank accounts – a company’s success depends on the effort of more than one person.
People with various skills work in separate departments – R&D, manufacturing, IT, sales and marketing, legal, HR. Individuals each have goals that overlap only partially with those of their colleagues. Businesses therefore need a way to align the activities of functional specialists with the firm’s single purpose.
Enter the bureaucracy. To encourage cooperation, companies set out rules and other forms of red tape. These tell people how to behave and what outputs are required from their work. A manageable set of rules cannot cover all eventualities, so the bureaucracy also needs people – ‘managers’ – with authority to settle exceptions. This whole system is designed to align work with purpose.
How a bureaucracy works
How does a bureaucracy operate? Managers monitor individuals, evaluate their behaviours and results, and assess these against the rules. The boss steps in and makes a judgment whenever the rules do not fully cover a situation. The system only functions when employees accept both the rules and the authority of their superiors.
Surveillance harms engagement
Surveillance is a costly overhead. A bigger problem is motivation. People like independence and enjoy having control over their work. Explicit monitoring undermines this autonomy. Even when individuals comply, they may work without enthusiasm and over time become alienated from the company. Employee engagement suffers. Managers then respond with closer supervision, compounding the problem.
Corporate culture also serves to align individuals’ work with business purpose, enabling cooperation. Rather than formal rules, cultural control hinges on shared values. Values describe what people care about, what they believe to be right or wrong, good or bad.
Norms replace rules
When people hold the same values, they more effortlessly agree on appropriate behaviours, outcomes and standards. These norms parallel the rule book of a bureaucracy. Fewer explicit rules are required because members of the company intuitively police themselves and each other based on what they believe to be right. Management overheads are reduced.
Engagement beats coercion
Under the rules and restrictions of a bureaucracy, people are controlled and feel coerced from the outside. The power of culture is that a person’s values are internal. People are themselves motivated to work in a way that fits with shared goals. Individual purpose is broadly aligned with that of the employer so more autonomy is preserved. People are freed from rigid constraints. Engagement rises.
Culture takes time
It takes time to assemble people who share values and beliefs. Firms must recruit individuals based on their values and / or immerse them in the traditions and rituals of the organisation. Similarly, when market changes demand new ways of working, it is easier to set new rules than socialise new norms. Still, in the long run culture is a more powerful way to obtain cooperation.
Modern industry needs
In practice, both bureaucracy and culture influence behaviour. What, then, is the right balance? There is a place for both mechanisms, but for several reasons cultural systems are more and more relevant.
First, work in modern industries spans geographies, hierarchies, departments, relationships and disciplines. Tasks and outputs are less easy to specify than they were on Henry Ford’s production line. In fast-moving economies where innovation counts, people also need freedom to create, experiment and work on the fly.
The typical day is hard to predict, and that makes helpful bureaucratic rules tough to establish. People who cooperate through shared values act according to principles that can be applied to many situations.
Second, people are constrained by the red tape of bureaucracy. Individuals experience greater autonomy when they cooperate through personal commitment to shared values and an agreed way of working. This inspires high performance and deep engagement, which translates into business results.
Third, strong, positive cultures run a lower risk of stagnation than bureaucracies. Cultural systems encourage everyone to discover better solutions as they go along – guided by shared values and norms. A firm’s capacity to adapt increases.
Bureaucracies rely on the ability of a few managers to predict intelligently what will serve people and the company best. Working methods become outdated quickly, but firms neglect to revisit their bureaucratic controls. In a shifting environment, old rules bind people to ways that have outlived their usefulness.
The main reason for working in organisations is to benefit from cooperation. ‘Culture’ – which brings structure and alignment with fewer fixed rules – is a powerful springboard for employee engagement and business excellence. I encourage CEOs and executive teams to consider afresh the means they use to help people do what the business needs.
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(Image by Frank McKenna on Unsplash)