Entrepreneurs can certainly be admired, quite apart from any injection of personal cash, for the courage, zeal and creativity they invest in a start-up company. Hours of tenacity-characterised effort and many late nights working on administration often mark the long day of the entrepreneur. As the company grows and gains more clients, however, there is real danger of it being undone through its own success – too many new clients, new products, new staff, new orders and even new premises. What was an exciting journey for the entrepreneur now becomes a confusing complexity of relationships, processes and systems, most likely introduced by hired managers and executives to sort out the disorganisation. A new bureaucracy is born and an executive level appears, now stamping authority on the operation through reporting lines and policies. The entrepreneurial spirit in the organisation is slowly strangled and the entrepreneurs in the business leave as they don’t want to fill in all the requisition forms, reports and the like.
Jim Collins stated it beautifully in his book, Good to Great, when he suggested that bureaucracy is created to compensate for incompetence and a lack of discipline – a problem which largely goes away if you have the right people in the first place: “Most companies build their bureaucratic rules to manage the small percentage of wrong people on the bus, which in turn drives away the right people on the bus, which then increases the percentage of wrong people on the bus, which increases the need for more bureaucracy to compensate for incompetence and lack of discipline, which then further drives the right people away, and so forth”. He goes on further to suggest that the alternative is to create a culture of discipline with the ethic of entrepreneurship.
It’s so sad that bureaucracy kills good people, good energy and good ideas. Perhaps some of the problems that we create lie in the following root causes:
- A lethargic or not rigorous enough approach to recruitment (hiring the wrong people)
- Employing leaders based on technological competence, but with little leadership ability (not having the right leaders in place)
- Not modelling or applying a disciplined, but creative, company culture (a restrictive culture with many rules)
- An affinity for the executive class, with all its perks, where power drives the culture (this in turn drives internal politics)
A bureaucracy easily can be distinguished from a transparent operating framework (with clear constraints), the same giving leaders and staff freedom, responsibility and accountability within the framework to be their creative best. Hiring self-disciplined people who don’t need to be “managed” frees executives and other managers to manage the system and lead their people, not manage them.