It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.
Golden Oldies are a collection of what I consider some of the best posts during that time.
The interest in some subjects is eternal — like avoiding bureaucracy. This post dates to 2006 (before I added pictures) and the subject is still a hot topic.
Too many bosses and founders confuse organizing business segments with becoming bureaucratic and everyone hates bureaucracy.
In reality, not organizing and developing a process to accomplish each function facilitates a wild west mentality, which usually results in a bullet in the foot or worse.
People sometimes confuse process and bureaucracy. Process is good—it helps to get things done smoothly and efficiently; bureaucracy is bad—it’s process calcified, convoluted, politically corrupted, or just plain unnecessary.
Good process is an easy-to-use and flexible method of accomplishing various business functions. It is informal without being haphazard, and neither ambiguous or confusing.
Occasional surveys (internally asking staff and externally asking vendors and customers how things are working) alert you to when processes start to mutate.
By creating a skeletal process and a corresponding graphic in areas where it is needed (financial controls, hiring, purchasing, etc.), you lay the framework for your growth in the future, no matter how hectic.
Bureaucracy may stem from a manager, whether CEO or first level supervisor, who believes that his staff is so incompetent that it is necessary for him to spell out exactly how every individual action needs to be done. To correct this, the manager responsible must
reduce his own insecurity,
increase his belief in his current staff, or
hire people he thinks are smart!
Bureaucracy is often fed by people’s fear of change, “We’ve always done it like that.” and similar comments are dead giveaways.
Another significant factor that contributes to unnecessary bureaucracy is the failure to align responsibility and authority.
If a person has the responsibility to get something done (design a product, create a Human Resources department, meet a sales quota), she should have enough authority (spend money, hire people, negotiate with outside vendors) to get the job done.
Giving people responsibility without concomitant authority forces them to constantly ask their superiors for permission, thus reducing productivity, and lowering moral.
The final, and most important difference between process and bureaucracy is that people like working for companies with good process in place, and hate working for those mired in bureaucracy, but not for long—they leave—making bureaucracy-eradication a major tool in the retention game.
According to Kentaro Toyama, the W.K. Kellogg Associate Professor of Community Information at the University of Michigan School of Information and self-described “recovering technoholic,” technology isn’t the panacea it’s cracked up to be.
“Technology works best in organizations that are run well to begin with. (…) The technology industry itself has perpetuated the idea that technology will solve the world’s problems. (…) Everyone wants to believe the work they do is good for society. But a lot of people in the industry have drunk a little too much of their own marketing Kool-Aid.”
What is often ignored is that people are a necessary ingredient for the Kool-Aid to actually work.
The tech eco-system forgets a lesson driven home by Bill Gates in the 1995 book The Road Ahead.
“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”
Aetna Insurance found this out when they first equipped their claims processors with their own terminals connected to the mainframe (before the advent of personal computers).
The effort was considered ground-breaking and was touted as a way to streamline the claims process.
It failed miserably, because the process itself wasn’t redesigned.
In short, claims had multiple steps with approval required at each. Because the process stayed the same, i.e., claims stalled in electronic form when someone in the approval process was on jury duty or out sick just as they did in the paper version.
Once people redesigned the process the desired efficiencies were reaped well beyond expectations.
Ultimately the right thing is for us to find the optimal use of technology — not to eliminate it, but also not to assume that it can replace human skills.
A Friday series exploring Startups and the people who make them go. Read allIf the Shoe Fits posts here
Are you one of the many founders who revel in a so-called startup culture that eschews structure and ignorantly confuse process with bureaucracy?
If so, you aren’t doing your company, your people, your investors or yourself any favors.
In a 2012 post I quoted Paul Graham, co-founder of Y Combinator, regarding the need for financial controls and frugality during good times in order to survive the bad ones.
The number of leaders, investors, academics and others who have recognized the impact culture has on success is as diverse as it is numerous — ‘culture eats strategy for lunch’ didn’t become a catchphrase by accident.
“The single largest issue that causes the most emotional heartache in a startup is people challenges. Every organization has them. If you put best HR practices into place in the earliest days and are doing the right things right, you’ll have fewer and fewer issues and blowups.”
If you want to build a successful company you need a solid base that includes a consciously designed culture based on your values, financial controls/accountability that engender frugality and best HR practices that enhance growth, while protecting the company.
A Friday series exploring Startups and the people who make them go. Read allIf the Shoe Fits posts here
One of the hardest things that founders/startups face is the need to grow up and stop shooting from the hip.
I hear the reasons not to all the time
It will ruin our culture.
It stifles creativity.
It’s for larger companies.
It’s bureaucratic.
It’s too time consuming.
“It” refers to the underpinnings of all successful companies. “It” includes the following, or variations thereof, in order of importance:
Financial controls that include, but are not limited to
monthly statements of revenues by product;
discounts;
costs by department;
cost of customer acquisition;
stock issuance;
cash flow;
hiring by department
Hiring process
Annual operating plan covering the above financial measures
Organization charts and definitions of responsibilities
Long-term planning
Centralized information technology implementation and planning
Whether it’s just you, or one, ten, fifty, or more employees, whether full time, part time or virtual, you need viable processes to keep you focused—think of it as coloring inside the lines.
Everything on this list can, and should, be tailored to your business model, but financial controls of one sort or another and a good hiring process are necessary to any business.
Sure, they can’t all be implemented at once, but none of them will happen as long as your MAP rejects or begrudges them—after all, you’re the founder and people will follow your lead.
I was reminded of it by a phone call from “Kev” asking for assistance because they were having trouble hiring.
He said they had no trouble attracting excellent candidates who seemed excited about the product and work, but they couldn’t seem to close them.
I asked two questions,
How would you describe your company’s culture and its core values?
What is your hiring process?
Kev described the culture in terms of working hard, a really fun atmosphere (foosball table, bubble machine, Friday beer bust, etc.) an “awesome product” and “incredible people.”
He said whoever was available sat in on the interview along with him and everyone had a say in whether an offer was made. They didn’t have a formal process, because they were a startup, but planned to put something in place when they started to scale.
Moreover, processes created outside or in ignorance of existing culture won’t work. It’s that simple.
That’s because the culture is anchored by and tied to the founder’s values and MAP.
For example, startups/high growth companies are often hotbeds of raging egos. If the culture is tolerant of that then the level of open communications that form the basis of great culture leading to good process is impossible.
Further, process created without a solid cultural basis will quickly turn to bureaucracy — which will slow growth while accelerating turnover.
Ben Bradshaw, a former BBC correspondent and now a Labour member of Parliament, said the 2004 scandal, touched off by reporting about British intelligence on Iraqi weapons of mass destruction, had created a system based on “fear and anxiety.” The BBC, he added, became “even more bureaucratic and had even more layers, which exacerbated the problem of buck passing and no one being able to take a decision.”
Of my many posts that delve into bureaucracy, I think the most important is Process vs. Bureaucracy—two things that are frequently confused.
As I say in that post, bureaucracy is “process calcified, convoluted, politically corrupted, or just plain unnecessary.”
All of which occurred at the BBC.
Or, as Tim Luckhurst, a journalism professor at the University of Kent who worked at the BBC for 10 years,
“They wanted systems that could take responsibility instead of people.”
But there are no systems, software or bureaucracy at any level that can take the place people skilled in handling wetware.
Nor is there any business, from Fortune 50 to micropreneur, or organization that can function without it.
So whether you manage yourself or a cast of thousands you need to embrace process and jettison bureaucracy.
One of the hardest things that bosses of growing companies face is the need to stop shooting from the hip.
I frequently hear from startups, small biz and entrepreneurs that growing up would ruin their culture.
They tell me it stifles creativity. It’s for larger companies. It’s bureaucratic. It’s too time consuming.
“It” refers to the underpinnings of all successful companies. “It” includes stuff like,
Financial controls
Annual operating plan that includes financial planning (you can’t plan to do something if you can’t pay for it)
Organization charts and definitions of responsibilities
Hiring process
Long-term planning
Centralized information technology implementation and planning
Whether it’s just you, or one, ten, fifty or more employees, whether full time, part time or virtual, you need viable processes to keep you focused—think of it as coloring inside the lines.
Everything on this list can and should be scaled for applicability, but all are necessary in some form for any business endeavor.
You don’t have to implement them all at once, but none will happen as long as you allow your MAP to reject or begrudge them.
And don’t confuse process with bureaucracy. Process is like MAP, it gets you where you want to go, whereas bureaucracy stifles whatever it touches; process, like MAP, is ever-changing and growing, while bureaucracy is carved in stone.
It boils down to the fact that bosses can’t be cowboys, so hang up your boots and spurs and do right by your company and it’s people.
One of the hardest things that growing companies face is the need to stop shooting from the hip.
I hear the reasons not to all the time, from startups, small biz, entrepreneurs, et al:
It will ruin our culture.
It stifles creativity. It’s for larger companies.
It’s bureaucratic. It’s too time consuming.
“It” refers to the underpinnings of all successful companies. “It” includes the following in order of importance:
Financial controls that include
monthly statements of revenues by product;
discounts;
costs by department;
cost of goods sold;
inventory;
receivables aging;
stock issuance;
cash flow;
manufacturing yields;
hiring by department
Annual operating plan covering the above financial measures
Organization charts and definitions of responsibilities
Hiring process
Long-term planning
Centralized information technology implementation and planning
Whether it’s just you, or one, ten, fifty, or more employees, whether full time, part time or virtual, you need viable processes to keep you focused—think of it as coloring inside the lines.
Everything on this list can, and should, be scaled for applicability, but all are important to every business endeavor.
Those that don’t directly apply may be tweaked, e.g., manufacturing yields can change to productivity measures; a very few, such as “stock issuance” may be completely discarded if the action is truly warranted.
Sure, they can’t all be implemented at once, but none of them will happen as long as your MAP rejects or begrudges them—after all, you’re the boss (CEO/president/managing partner/owner) and people will follow your lead.
Finally, don’t confuse process with bureaucracy. Process is like MAP, it gets you where you want to go, whereas bureaucracy stifles whatever it touches; process, like MAP, is ever-growing, while bureaucracy is carved in stone.
People sometimes confuse process and bureaucracy. Process is good—it helps to get things done smoothly and efficiently; bureaucracy is bad—it’s process calcified, convoluted, politically corrupted, or just plain unnecessary.
Good process is an easy-to-use and flexible method of accomplishing various business functions. It is informal without being haphazard, and neither ambiguous or confusing.
Occasional surveys (internally asking staff and externally asking vendors and customers how things are working) alert you to when processes start to mutate.
By creating a skeletal process and a corresponding graphic in areas where it is needed (financial controls, hiring, purchasing, etc.), you lay the framework for your growth in the future, no matter how hectic.
Bureaucracy may stem from a manager, whether CEO or first level supervisor, who believes that his staff is so incompetent that it is necessary for him to spell out exactly how every individual action needs to be done. To correct this, the manager responsible must
reduce his own insecurity,
increase his belief in his current staff, or
hire people he thinks are smart!
Bureaucracy is often fed by people’s fear of change, “We’ve always done it like that.” and similar comments are dead giveaways.
Another significant factor that contributes to unnecessary bureaucracy is the failure to align responsibility and authority.
If a person has the responsibility to get something done (design a product, create a Human Resources department, meet a sales quota), she should have enough authority (spend money, hire people, negotiate with outside vendors) to get the job done.
Giving people responsibility without concomitant authority forces them to constantly ask their superiors for permission, thus reducing productivity, and lowering moral.
The final, and most important difference between process and bureaucracy is that people like working for companies with good process in place, and hate working for those mired in bureaucracy, but not for long—they leave—making bureaucracy-eradication a major tool in the retention game.
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Continuing yesterday’s conversation regarding the need for good process in every size organization — the key word being “good.”
Are you one of the many founders who revel in a so-called startup culture that eschews structure and ignorantly 
Are you following events at the BBC?
One of the hardest things that bosses of growing companies face is the need to stop shooting from the hip.
One of the hardest things that growing companies face is the need to stop shooting from the hip.
