EGM On A Mission: Let’s Build Better Companies*
Our organisations are broken – and it's breaking our people.
Riddled with bureaucracy, unnecessary rules and dumb processes, the need for control, a lack of trust, pointless work deadlines, poor communication, micro-management and job insecurity (1)
Australia has come to a fork in the road.
‘Our economy performed poorly for most of its citizens from 2013 to the pandemic – ‘The Dog Days.’ Unemployment and underemployment remained stubbornly high, wages were stagnant and productivity grew at a slower rate than other developed economies. We are experiencing a significant demographic shift – which makes things harder.
The baby boomer generation is retiring in record numbers with 5 million people passing the age of 65. We have high debt and big problems with our biggest trading partner, China.
There is now a choice between ‘the resumption of the dog days – or a post-pandemic restoration of Australia...’ (2)
It’s not all bad news – clearly we’re in a better place than many other countries - during the greatest economic downturn since the 1920s:
‘Fitch affirms Australia AAA negative outlook. The country has strong institutions and policy frameworks.’ (3)
And unbelievably, we have a huge untapped way of increasing productivity and economic growth – and it’s there in our grasp.
Australia has a problem which is also an opportunity – and its colour is red – red tape that is. We need to free our economy from the stranglehold on Australia’s productivity. (4).
It costs our companies:
A$94 billion each year – to comply with public sector rules
A$155 billion – to administer and comply with self-imposed rules.
At least eight weeks of work per employee each year to cover the cost of administering and complying with rules.
The overall cost to companies of bureaucracy is a staggering quarter of a trillion dollars each year. (5)
Survey after survey shows the extent of the problem:
A 2020 survey on the Australian workforce revealed that the amount of overtime work doubled from 2019 – much of it unpaid. Australians spend more than half their time on ‘work about work’ – attending meetings, dealing with compliance and observing internal rules and processes. Professional people spent 170 hours in unnecessary meetings in 2020. (6).
Add an unquantifiable cost to the A$250 billion: demotivated staff, poor engagement, creativity and innovation.
‘A Gallup report in 2018 found that Australian workers are among the least engaged in the world– only 14% fully engaged at work, 71% not engaged and 15% actively disengaged.
Four in five managers also not engaged. (7)
Surprisingly, it’s not the work that is the problem – 89% like their jobs. It’s the way they’re managed that’s the issue. (8)
Hierarchical, disempowering, dull conformity, putting people in narrow roles, stifling development, suffocating rules, treating human beings as resources and discouraging entrepreneurship.
It’s not hard to conclude that companies waste more human capacity than they use. (9)
We have written about bureaucracy before. (10)
Bureaucracy is thriving.
Since 1983, the number of managers in the US has risen by 100% - while the number of workers has increased by 44%. (11)
Like Agent Smith in ‘Matrix Reloaded,’ bureaucracy in our workplaces is self-replicating
As the organisation grows, the number of layers increases as more managers are added
With every crisis, power moves to the centre and stays there
Power and compensation are products headcount and budget and no-one ever downsizes their empire
Staff groups justify their existence by issuing rules and mandates that rarely have an end-date. As a result the clog of red tape gets ever bigger
internal service providers can’t be fired by their ‘customers.’
Those who resist grow weaker
The fuel for bureaucracy- personal power and survival.
Centralisation works like a ratchet – those who have the power won’t give it up and are in the position to keep it.
There has to be a better way.
Both for the sake of our economy – and the well-being of our work mates.
The Path to Freedom
So, we’re on a mission.
Over the next few weeks, we’re going to publish blogs that define a pathway to build better companies; dealing with leadership, culture, structure and ways of driving down the level of bureaucracy in the companies we work for.
Our goal – to help propel our companies towards a human focused – not rules, processes and bureaucracy focused – approach.
it would be great to get your comments and input.
No matter what your role – we can all make a difference- and start freeing our companies from unnecessary bureaucracy
It’s down to all of us to play our part
Our companies won’t be fully human – until people like us change things.
Sources:
EGM blog: ‘Burn Out – It Can’t Be Ignored Any Longer’
‘Reset: Restoring Australia After the Pandemic Recession,’ Ross Garnaut
Unleashing Productivity,’ Deloitte Australia, November 2014
‘Rules Eat up $250 billion a Year in Profit and Productivity;’ Deloitte Australia 2014
Australian Financial Review: 28th January 2021
See Business Builders.com.au: Gallup ‘Report Finds Australian Workers Stressed and Disengaged;’ 13 November 2018
See: Humanocracy: Gary Hamel and Michael Zamini
See Hack My Org.com: Gary Hamel
EGM Blog: ‘Is Your Company Bureaucratic?’
Humanocracy: Gary Hamel and Michael Zamini
Get Out Of Your Own Way: from a report by Deloitte 2014.