BMI: Bureaucracy Mass Index?

By | August 13, 2017

I first read this catchy acronym in the Harvard Business Review here. It’s not a subtle metaphor, but very easy to understand. Apt. Vivid. In the United States, we have a huge obesity problem, and frankly, the same thing exists in corporations. This is not restricted to this country or just to publicly-traded companies. Global. Non-profits. Governments. Does not matter – organizational bloat, bureaucracy, chaos, and temerity are everywhere. As consultants, we see inefficiency every day. Personally, I would say 1/3 of my consulting work has been related to complexity and bureaucracy reduction.

Can we rate / rank / measure this? Cue the music for the metrics.  Gary Hamel and Michelle Zanini surveyed 7,000+ HBR readers about their workplace and used the 26 question survey as inputs for their BMI scoring. Essentially: how bureaucratic is your workplace?

Do we trust the data? As I have told readers of this blog, survey design can be tricky, so always take survey results with a grain of salt. Here are the survey questions here. Yes, HBR readers will definitely skew bourgeois and educated (HBR costs $12 an issue in print), but the sample size is large and the questions are fairly worded. The findings will resonate with most of you.

1) Bigger is more bureaucratic. 

This confirms what most of us have long suspected: large companies suffer from managerial diseconomies of scale. – Gary Hamel

2) The problem is getting worse. Hamel notes that nearly 2/3 of respondents said bureaucracy is getting worse. The most vocal dissatisfaction comes from folks who are closest to the customer and held accountable for results – production, sales, business development, customer satisfaction. When the company delays, disappoints, or confuses, the front line suffers.

3) Wasted time. Respondents said that 28% of their time was spent on bureaucratic chores (e.g., reports, meetings etc), and less than 40% of people found it helpful. More alarmingly, senior executives spend almost 1/2 of their time with internal issues. Peter Drucker would not have been impressed.

4) It’s not adding value. 40% of people said that a 1/3 reduction in headcount would either not affect or improve value delivery to customers. Whoa – that is pretty extreme talk. My counterargument might be: they don’t understand what others do – ergo, it’s easy to write them off as unproductive. This is also why bureaucracy is not getting fixed – problems just get pushed to other parts of the organization without understanding the entire workflow.

5) It’s exhausting. No surprise, bureaucracy makes it an un-fun place to work.  Slow, repetitive, dehumanizing, risk-averse, and political.  More than 2/3 of people said that political skills “often” or “almost always” helped to determine who gets ahead. No surprise, but so sad.

Executives may not see the problem. Take a look at the graphic below. CEOs (shown with the red dot) tend to see less bureaucracy, consider it less sticky, don’t believe it is necessary for the work to get done. Quite a contrast from the individual contributors (blue dot).

Bureaucracy is a simple and common story. Companies start out scrappy, on a mission for their customers. Over time, this success breeds complexity. Complexity kills. It’s an S-curve. Starts out with enormous energy, then slows down, then plateaus. Eventually. Stalled. Out. Inert.

Bain has been talking about this for some time. They call it the Founder’s Mentality.

So, what can we do? How do we combat this?

What is the potential for consultants to reduce a client's BMI?

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6 thoughts on “BMI: Bureaucracy Mass Index?

  1. Brandon Smith

    My experience has been that once a company hits $3B in revenue, it ceases to be a company and morphs into a government. In other words, at $3B you are obese. Call yourself what you like, but you are slow, lethargic and prone to the inter-politickings of the place. The trick is keeping companies below this threshold. No easy task!

    1. consultantsmindadmin Post author

      Brandon – thanks for the insight. This will be increasingly true as M&A increases, the markets continue to reward “growth” over sustainable profitability. Thanks for reading.

  2. Joe P

    Really enjoyed reading this one. As someone who comes from Fortune 100 before transitioning to consulting, what worried me most about bureaucracy at a large organization wasn’t so much that it existed, but that it was consistently encouraged from senior leadership as if it were a requirement for a successful organization. Issues would never get resolved as they were pushed through a never ending “escalation process”, and those at the bottom eventually become so frustrated that they stopped innovating and accepted things as status quo.

    1. consultantsmindadmin Post author

      Joe, thanks for the comment. Completely hear what you are saying. A few thoughts: 1) Think it is a leadership problem. As the http://www.theworkplacetherapist.com says, a leader’s job is to simplify. Completely agree. 2) Believe that management needs another phase (S curve) of development. Seems like each function has gotten so good (read: suboptimized) that all the cross-functional issues bubble up to the top.

      Basically, anything out of the ordinary has to be a “tie-breaker” by the top. Kind of a lack of trust and strategic flexibility. Thanks for reading.

  3. Ahmed Freeman

    Hi! Indeed, an excellent read and extremely relateable to someone who lives in France. The most useful advice anyone has given me during the years I’m spending in college “If you worry more about keeping or progressing from your position than you do about your actual work, then you’re in the wrong place”. I guess this is the one reason I’d rather work in consulting than in a development bank.
    Cheers!

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