10 Signs That Your Business Is Mired in Bureaucracy

If we sense that our structures are rigid, inflexible, or bureaucratic, we must bust them open – without destroying ourselves in the process.” – Ed Catmull

To be successful in today’s highly competitive marketplace, your business must be flexible, innovative and customer friendly. Businesses that are inflexible and difficult to do business with are destined to fail.

Quite a few years ago, I was called by a client and asked to take over an engineering project that they had awarded to one of our competitors. This competitor was not meeting the requirements of the contract and not delivering on schedule or on budget. Once I got involved with the project and did some investigating, I discovered the biggest reason for their failure was they were stuck using their rigid project execution processes that added cost and complexity without returning any value. This competitor was stuck in their rigid, inflexible and bureaucratic structure and could not find a way to break out of it even though they were self-destructing!

Legitimate systems and structures are put in place to drive consistency, repeatability, quality, efficiency and to control costs. However, if these same systems and structures begin slowing down your business, costing more money or negatively impacting quality because they are too rigid, they must be, as Catmull says, “bust open” and replaced with systems and structures that add value.

How do you know if your structures and systems are too rigid and you are mired in bureaucracy? Look for these 10 warning signs:

  1. You hear your staff saying things like; “We have to do it his way because we were told to” or “We have to do it his way because we have to follow the rules.”
  2. You have auditors enforcing outdated rules and policies that actually cost your business money rather than making you more efficient
  3. Your company has grown a lot recently but you have the same structures and systems
  4. Your company has downsized recently but you are using the same structures and systems
  5. Your market has changed significantly but your structures and systems are the same
  6. Your staff take forever to do something that used to be done much quicker
  7. Your costs per unit are escalating instead of decreasing
  8. Your customers are complaining about how inflexible you are
  9. Your customers are complaining about cost increases
  10. You lose customers because you are not compliant with the customer specifications

How do you avoid being too rigid and bureaucratic and how can you break out of this rut if you are already in it?

  1. Communicate your new company direction to your staff. Model these new behaviors in everything you do. Remember that a leader’s actions speak louder than words.
  2. If you hear an employee state; “We have to do it his way because we were told to” or “We have to do it his way because we have to follow the rules” you must step in immediately and correct the situation and reset their behaviors with your expectations.
  3. Build a culture of innovation within your established processes. Encourage staff use your structures and systems where it makes sense while suggesting better ways to do business when they don’t make sense. Be willing to review these suggestions and change the way you do business.
  4. At least once a year, run the “Kill a Stupid Rule” exercise and get rid of old systems and structures that are no longer relevant.
  5. Continuously improve. This is related to the first four points. Build a culture that relentlessly drives improvement at every level of the organization and across all activities.

Stamp out any signs of bureaucracy and rigidity. They are like a cancer that will slowly choke your organization to death. Start building a culture that encourages innovation and continuous improvement and watch your organization flourish!

What bureaucracy and rigidity are you going to target in your organization?



The most important thing I learned from big companies is that creativity gets stifled when everyone’s got to follow the rules.David Kelley


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2 thoughts on “10 Signs That Your Business Is Mired in Bureaucracy

  1. This is an article dear to my heart. I have found that the bureaucratic burden and non-value add administrative responsibility grows greater, year on year.

    Stifling, suffocating, sclerotic bureaucracies are a feature of ever expanding, increasingly inefficient, ineffective, unaccountable … and ultimately unaffordable and unsustainable … government.

    But government can survive in this state far longer than a private business or company, because they simply reach deeper into the pockets of their ‘shareholders’ (the citizen) to fund their inefficiency.

    We don’t have that luxury in the private sector.

    Dave, this article should be read in conjunction with your earlier piece on automating everyday tasks … which I can’t seem to lay my hands on just now! As individuals, and within private business, we have the opportunity to take heed and fight the debilitating spread of bureaucracy. At the local and even corporate level, decline can be a reversible choice. But are the trends in society, in governing bodies, in regulatory authorities, in institutions heading in the wrong direction, making productive activity and creativity increasingly difficult? Yes, I think so. Is meaningful course correction possible, or does history suggest that decline is irreversible.

    That, no doubt, goes beyond the scope of ThinkingBusiness … but I’d sure like to hear your reflections sometime!

    • Excellent points!

      It can seem like bureaucracy is out of control at times (especially in some large corporations). However, one needs only to look at many of the small and medium sized businesses (which make up the vast majority of businesses in North America) to see that business can and does operate efficiently and without bureaucracy even in today’s world. This lack of bureaucracy also can be found in well led, large companies. Berkshire Hathaway is a great example of this. They have over 350,000 employees but only 25 people in their head office . . . very efficient without loads of bureaucracy.

      The article you were referring to was “How to Reduce Your Workload and Get More Done” and can be found at http://www.thinkingbusinessblog.com/2015/12/10/how-to-reduce-your-workload-and-get-more-done/

      Thanks for the comment and have a great week!