I have worked with many different Fortune 500 companies in my career and the one item that they all seem to love is bureaucracy.  They have become small governments and some of them actual exceed the GDP of some countries.  So, why does it come as a surprise that they desire the same bureaucratic ways as government.  The sad part is many small companies lose the advantage they have over these behemoths by trying to become more like them.  The endless copying, project plans, cost/benefit analysis, targets, appraisals, inspection, monitoring, milestones, deliverables, technology, scripts, procedures, etc. become more entrapping than enabling to the small systems.  Yet, time after time I see companies trying to emulate the best practices of the big companies.  All the while in the pursuit of saving money these companies just keep adding expenses that offer little and usually no hope of a profitable return.

When you look at the reasons big companies operate the way they do, you will find flawed thinking around their actions.  They include:

  • Scientific Management Theory – The functional separation of work by department and unit with individual and group financial and performance targets.  All leading to sub-optimization and worse performance and lower morale.
  • Separating the decision making from the work – Big companies make decisions without knowledge about the work they manage, instead relying on reports and anecdotal evidence.
  • Technology – Because they never actually understand or see the work in big companies executives and managers require more and more technology to “control” the work and their pursuit of knowledge only winds up giving them information . . . not knowledge (let’s not confuse the two).
  • Productivity – Big companies are all about activity, they see activity as something to measure and keep track of when in reality it only adds waste.  Workers in big companies running around with procedures to write, project plans, PowerPoints, check lists, etc. to make sure the work is controlled, inspected and monitored.  While the people on the front-line doing the real work are left with “checking their brains at the door.”

This isn’t an exhaustive list, but you get the idea.  So why do companies that are small and mid-sized follow these companies blindly. . . ”We want to be big (and stupid) like the big companies.”  I have talked about economies of scale being trumped by economies of flow which levels the playing field for organizations of all sizes.  But a new leadership strategy for companies of all sizes is required.  Business improvement doesn’t require most (if not all) the non-sense that big companies (aka small government) purport be required as most of it
is just waste.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.