Bureaucracy - what is it and how is it changing?

Bureaucracy is a subject we all love to talk about. We see it in our organisations and we experience it when we deal with government and large business. No subject evokes our ire more, and on none are we more expert or more vocal in our opinion.

But perhaps the whole idea of bureaucracy might be ready for re-examination. Today, the word seems to be commonly associated with characteristics such as these: hierarchical authority controlled from the centre and operating at many levels; lack of initiative; excessive adherence to rules and routine; inefficiency; or, even more seriously, an impersonal force.

But two different ideas associated with bureaucracy are worth exploring. The first is that bureaucracy is a mindset. In a recent interview with the BBC's Robert Peston, Adair Turner, the Chairman of the Financial Services Authority, noted that the failure of the regulatory mechanisms in the recent financial crisis was in part down to the tendency for regulation to breed a fixed mindset rather than a willingness to stand back and take a big picture view. But it's not easy to challenge the system, when doing so may threaten your job or your chances of promotion. Better, perhaps, to keep your head down and follow the rule book.

Bureaucracy thus seems to breed organisational cultures where adherence to rules is seen as key, irrespective of the value added or subtracted. Entrepreneurial concepts such as taking reasonable risks to gain exceptional rewards for the organisation become alien concepts. Eventually, keeping to rules becomes a bureaucracy’s own survival mechanism

The second key aspect of bureaucracy is that it came into being in large part because of the need of nation-states - and later, organisations - to direct and control very large assemblies of people to achieve some goal. Over the last two thousand years, states have created bureaucracies as the necessary means by which they could exercise power, wage war and protect their citizens. In ancient times, work for many or most people was in the employ of the state. The British Empire was a more recent example of how half the world was administered by one of the largest bureaucracies of modern times.

Bureaucracies, therefore, operated as processes, performed by people, that enacted the rule book of the organisation or nation-state. They come into being to deal with complexity. We don't operate a bureaucracy in our personal lives. We schedule Sally's music classes and plan next year's holidays without needing a complex apparatus of servants and systems. But delivering health care to 62 million citizens or collecting taxes is the ultimate complexity nightmare.

We now live on the cusp of massive changes in the way that the apparatus of states and large enterprises operates. This will have a profound impact on our ideas of what a bureaucracy is and whether it is needed. The change is not once in a generation, or once in a lifetime. The change before us is as significant as the agrarian revolution, or the industrial revolution. And like these epochal events before, those living through them could not foresee what kind of world would emerge. We are similarly doomed to struggle with the implication of the forces operating today.

The key reason for this shift is the inexorable rise of technology.  Systemic technology - the marriage of computer technology with the automation of processes that could once only be performed by humans - is the first key component. The second is social media technology. Together, these interleaving developments are changing how organisations and governments operate, how they deliver products and services, and how they are held together.

The first of these trends means that much of what was once delivered by people is now being delivered by computers and the Web. The rules and processes for how the enterprise does this are being embedded in these automated systems. And people within these enterprises spend their time creating, modifying and maintaining these rules. None of this immediately gives hope that bureaucracy will be reduced; if anything it may be reinforced. Yet developments in artificial intelligence may one-day help by enabling these rules and processes to be self-modifying as the system itself learns and evolves.

The second trend is also changing the nature of bureaucracy. As people network in ever more open environments through Twitter, Facebook and similar social media, organisations cannot expect to control every aspect of their employee’s behaviour. As employees interact with customers, suppliers and others through the open Web, organisations are realising that managing conformity and adherence to rules must be selective. Apple famously controls its research and delivery secrets, yet when dealing with customers it must interact and listen like any other dynamic organisation.

These two forces - the one that will encourage rigidity and conformity, and the other which can open up organisations - are thus set to compete for attention in the years ahead. It will be interesting to see how the debate unfolds, and the kinds of organisation that emerge. Let's hope that we won't use the b-word to describe them.

©  BusinessNext Ltd and Christopher Ogden & Associates.