The lengthy procedures set in an organization, many a times, are a demotivating factor. Sometimes it takes more than 10 approvals to get a green light for any proposal. The compliance and statutory requirements also take the life out of a business.
Employee loyalty at the customer-facing jobs is the lowest in a company. Headcount in the corporate office is more than twice that of the rest of the company. People with the least contact with the customer facing role managed a larger portion of the decisions.
According to research by Bain & Company, 85% of executives say that the greatest barriers to achieving their growth objectives are internal in nature. In the largest companies, 94 % of executives believe that their most difficult challenges are not external.
Most of these challenges arise due to complexity and bureaucracy which accumulates due to the scaling of the businesses. When a loss of internal metabolism, speed, self-awareness, sense of urgency, and general bloat of staff occurs, one cannot blame any of the outside factors.
The “Growth Paradox:”
Growth creates complexity and yet complexity is the number one killer of profitable growth. You cannot win on the outside, in the marketplace, if you are losing on the inside, with an organization stifled by its own growth.
Is there a way out of this mess? Understand that bureaucracy and complexity spoil company behavior.
A. Distortion of speed:
Young, founder-led companies often set the speed in their competitive arenas. They want fast recognition, change and scale. They have an inherent need to interpret the hows & whats of the situation and are quick to react.
Netflix adds new programming by changing the way television works traditionally. Speed is measurable and is a benchmark. But as companies grow, they become sclerotic.
Solution? Have few, yet impactful meetings. One should never miss them. It sets in the discipline. It has morphed to ‘we can’t live without it.’”
B. Distortion of motive:
Young organizations have no place to hide and the founder knows everything. The procedures and policies are transparent. Older companies fall for redundant and slow corporate processes. They fall for complex “scorecards” of performance which are better off in the text books! When meritocracy is lost, how you look and sound will over power what you actually do.
Solution? There should be little tolerance for excuses! You either perform or you don’t. One gets paid for solutions, not effort. Simple targets, no places to hide, and simple communication are where it starts.
C. Distortion of time:
As per a recent research, one needed a whooping 3,00,000 hours to set up an executive committee meeting at one large company. Funnily, start-ups expend less time in a year to manage their entire firm.
Companies should be self-aware. How do they use their time? It is in line with the money spent? How much time do they spend with top customers? Out of that, how much with high potential employees? Do they spend enough time on solving the firm’s most important challenges?
D. Distortion of decisions:
Nearly 7 out of 20 decisions made in a process did not have a clear decision maker.
Solution? List down your 5-10 most important types of regular decisions. After this, list the names of the people actively participating in these decisions. Along with standard principles, the decisions should have fewer people at the core. This approach can re-empower the front line and renew the owner’s mindset at bigger companies.
Technology like VComply helps the organization to entrust responsibilities to people. This helps to avoid wastage of time in confusion and disharmony.
E. Distortion of information:
In a company’s early years, the founding team knows the customers by name and the products in detail. Intimacy and ground level knowledge is second nature. Yet, as companies grow this becomes increasingly difficult. Customer names give way first to customer group averages and then to summaries of research interpreted and re-interpreted as it flows up through layers to the desks of the senior team, sometimes diminishing the role of insurgent, smaller competitors or of customers who are the “canaries in the coal mine” of market challenges.
One should push as many decisions as possible down to the place where the ground-level information exists. There should be a set of semi-autonomous teams.
One can set up ways to “drop in” on customer calls, or call-center service discussions.
The attacks on traditional systems and bureaucracy should be precise and not vague. It will help renew a company efficiently and on time. One can remove the root causes and measure the impact on these five outcomes in a methodical manner to achieve the best results.Add to favorites