Organizational complexity

In business and in government, there are too many cases of management consisting of mismanagement.

Organizational complexity does not simplify or clarify, but rather creates conditions that make it difficult to work. As more regulations are added they only exacerbate the problem.

Companies often begin with a statement of purpose. That in itself triggers endless debate; rules and sub-clauses lead to discussion and prolonged meetings.

A consulting firm, Bain and Company, analyzed samples of big firms, which revealed that their managers spend 15 per cent of their time in meetings, a percentage that seems to be rising. Too many of these have no clear purpose.

There it became apparent that senior executives devoted at least two full days a week in meetings accompanied, of course, by colleagues. Then also in many conferences three or more e-mails were sent to those, believe it or not, sitting in the same room. This “clutter” imposes on the time of the recipient. According to Bain’s analysis, management communications soared from about 1,000 a year in 1970 to 30,000 today.

Inevitably, all this entails getting people to do individually more “work”, and more meetings to co-ordinate this data. Usually, big companies have become more complicated than smaller ones. The latter can focus on the part of their operation that enables them to compete successfully.

In large organizations managers build “empires” that feed on themselves; more assistants are required, adding an additional layer of confusion.

As a result of all this, even simple things get lost, such as the need to replace a faulty ignition system in General Motors’ cars.

Needless to say governments probably are the worst offenders in holding meetings and over-regulating that inhibits activities. This columnist chaired a meeting of the Privy Council Office, the apex of the federal government. The entire day was consumed by a discussion to define poverty. For instance, did two automobiles disqualify a person as poor?

During the Second World War this columnist filed an intelligence report showing that the Soviet Union abused the lend-lease program for monetary rewards, but no remedial steps were taken.

Some companies such as Boeing have started to hold their executives accountable for “occupational overload” imposed on subordinates. General Electric is beginning to introduce a “culture of simplification.”

Certainly regulations are needed to be enforced, such as preventing the contaminated water scandal in Walkerton.

However, there should be periodic housecleaning to curtail the rising pyramid of clutter.



Bruce Whitestone