Bureaucracy vs. Holacracy

As an MBA student and a close observer to general market dynamics, I can categorize the types of business changes under three main groups: 1) Episodic, 2) Continuous and 3) Disruptive (Daft 2013), with the third one being substantially critical due to its direct ties with immediate and sudden changes in market constraints, that would severely impact any business that is not well equipped for radical changes. That said, companies that are yet heavy dependent on strict bureaucracy as an internal governing system, will have a very tough time in merely surviving the growing magnitude of competitive rivalry.

Employing large number of officials in order to strictly and carefully follow the roles is a guaranteed recipe for failure. Now it might work in limited government sectors and non-profit organizations, but definitely it will not function for companies that operate on profit and loss basis. And in line with that, I can bring a very relevant example from the large pharmaceutical company, Pfizer, that exponentially inflated in terms of human resources over the course of successive mergers and acquisitions, leading to excessive increase in managerial hierarchies, and significant drop in delivering new drugs, despite the fact that R&D budgets were tripled.As a result, pharmaceutical companies are now adopting a different concept, that is based on small biotechnology setups (Daft 2013).

While speaking of companies that successfully managed to overcome bureaucracy, then Chrysler (under its flagship are both Jeep and Dodge) stands out like a very good example. Where from a company that filed for its bankruptcy and participated in the bailout program from the US government back in 2009, it miraculously turned into a profitable one in only two years after repaying its financial obligations fully to the US government. And the credit behind that success goes to the genius CEO of FCA (Fiat Chrysler Automobiles) Mr. Sergio Marchionne. So what he did was remarkably brilliant, while in the same time quite simple in principle. Where he believed in the flat organizational structure, and for that he put all of his power to fight centralization of decisions along with bureaucracy, to end up with a new setup where 25 of senior Chrysler executives are reporting to him directly, that enabled him to drastically make quicker and better decisions compared to previous failing structure that used to take weeks or even months. However, that didn’t happen without losses for some and gains for others. Where for those who resisted the change and fought to keep the company as it is, were shown the door. While others who expressed eagerness, got promoted and become official members of the new management team (Daft 2013).

Alternatives:

Since ultimate organic or mechanistic structures are going to be accompanied with several side effects, a number of alternative setups have been proposed which happen to be based on a hybrid concept, in order to get the best out of both. In line with that, I thought to briefly refer to this study published by Washington Post, which explains the possibility of operating in a hybrid operational spectrum, between holacracy and bureaucracy, through which higher levels of freedom is given to certain volume of employees, while greater level of control is being imposed on others (Washington Post 2015), which relatively sounds like a reasonable and practical blend.

References:

Daft, R. L., (2013) ‘Organization Theory and Design’. 11th edition. Mason. OH: Cengage Learning.

Washington Post (2015), ‘How to build a great company by blending bureaucracy and holacracy’. Available online from: https://www.washingtonpost.com/news/innovations/wp/2015/09/03/how-to-build-a-great-company-by-blending-bureaucracy-and-holacracy/ [Accessed on November 21st 2016].

Barriers to Change

Visionary leadership is crucial for change; however, managers should expect to encounter resistance as they guide the organization along the curve of change. It is natural for people to resist change, and many barriers to change exist at the individual and organizational levels.

1. Excessive focus on costs. Management may possess the mindset that costs are all-important and may fail to appreciate the importance of a change that is not focused on costs—for example, a change to increase employee motivation or customer satisfaction.

2. Failure to perceive benefits. Any significant change will produce both positive and negative reactions. Education may be needed to help managers and employees perceive more positive than negative aspects of the change. In addition, if the organization’s reward system discourages risk-taking, a change process might falter because employees think that the risk of making the change is too high.

3. Lack of coordination and cooperation. Organizational fragmentation and conflict often result from the lack of coordination for change implementation. Moreover, in the case of new technology, the old and new systems must be compatible.

4. Uncertainty avoidance. At the individual level, many employees fear the uncertainty associated with change. Constant communication is needed so that employees know what is going on and understand how it affects their jobs.

5. Fear of loss. Managers and employees may fear the loss of power and status—or even their jobs. In these cases, implementation should be careful and incremental, and all employees should be involved as closely as possible in the change process.

Implementation can typically be designed to overcome many of the organizational and individual barriers to change.

Reference:

Daft, Richard L. Organization Theory and Design. Cengage Learning, 03/2012. VitalBook file.

When you’re with someone who frets about the future, a real hand wringer and nail-biter, simply tell this childlike story

Clocks usually are calm, regular creatures, but one litter ticker worked himself into a frenzy thinking about his responsibilities for the coming year.

“I have to tick two times per second,” he said. “That’s 120 ticks per minute, 7,200 per hour, 172,800 per day.”

Continuing his calculations, the clock worried that he’d never be able to complete the necessary 1,209,600 ticks every week. And he despaired of ticking regularly nearly 63 million times in the coming year.

The more he thought about it, the more worried he became. Finally, his anxiety made his ticker go on the blink, and he consulted a psychiatrist.

“I’m afraid I just don’t have what it takes to manage all those ticks,” the clock lamented.

The doctor smiled and asked him, “How many ticks must you tick at a time?”

The clock responded, “Well, just one,”

“Then, focus your energy on just one tick at a time,” suggested the doctor, “and I think you will be just fine.”

So the little clock wound himself up, concerned himself with only one tick at a time and went on ticking happily ever after.

SOURCE: Glenn Van Ekeren. SPEAKER’S SOURCEBOOK II: QUOTES, STORIES, & ANECDOTES FOR EVERY OCCASION

SharePoint is falling behind sharply in the WCM domain

After being leaders back in 2009/2010, It is quite disappointing to see SharePoint falling behind sharply in the WCM domain.

However I don’t believe that was out of coincidence, but on contrary and pragmatically speaking, I would say that was due , but not limited to, the following:

  1. Any dedicated, focused WCM effort is disappearing as Microsoft pushes customers toward the cloud and Office 365. WCM’s greatest urgency and innovation lies in external, customer-facing scenarios, but Microsoft is focusing almost exclusively on business-to-employee scenarios.
  2. Customers wanting to use Microsoft for differentiated customer-facing Web and digital initiatives face the prospect of heavy customization. This has consistently been troublesome when working with SharePoint and will be more so in a cloud-based system.
  3. Feedback from the market suggests usability issues with SharePoint at a time when business is seeking an ever higher level of agility from WCM products. Other vendors in this Magic Quadrant provide far greater agility to marketers than Microsoft provides with SharePoint.
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