From digital transformation to de-bureaucratization

by bold-lichterman

We put a lot of things behind the digital transformation. Many will focus on the notion of customer experience but, with hindsight and the necessary distance, it is above all a question for a company of giving itself the means to operate at high speed and on a large scale in constantly changing markets. Customer experience and employee experience are the means just like other things, but not ends in themselves.

An application should not be expected to work in a context where the assumptions on which it works are not valid.“. In other words, in our case, acquiring the latest technologies to interact with the customer, improve the go-to-market, exchange, collaborate and decide quickly will be of no use if the structure even your business is designed to centralize everything, multiply bottlenecks and, in fine, to slow down its operation.

This type of structure has a name: bureaucracy. And that was precisely the theme of the opening keynote of HRTechWorld 2016, in Paris, with Gary Hamel.

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The start-up: where talents flourish

Hamel’s observation is simple: today talents have a preference for start-ups. Not because it’s fun, funny or whatever, but because it’s there that they thrive the most and manage to give the best of themselves. It may be a matter of culture but above all of structure (one having an impact on the other).

Start-ups are courageous, open, flat, “lean”, simple and promote freedom. Conversely, most large companies put their employees in diametrically opposed systems.

How many of you can identify with the following propositions?

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Conversely, I think the reality for 95% of us is more or less this.

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Before continuing, it is important to clarify two things:

  • My point is not to say that “traditional” businesses are bad and, conversely, that start-ups have understood everything. The reality is more complex: all the big structures have been small, agile, lean, innovative. Over time they have grown, have had to structure themselves, become “controllable” despite their size, meet the governance requirements imposed by investors and the market. In the end, they built “fat” in a natural way, without even realizing it even if today everyone (and they first) see the damage. I make this clarification because I am convinced that most of the start-ups we are raving about today will eventually, over time, resume the bad habits of their elders.

  • As Gary Hamel points out, the current “unicorns” who are an example for many only represent in the United States, with their $ 400 billion in cumulative capitalization, 2% of the capitalization of large companies. A drop of water in the ocean.

Hence Hamel’s logical conclusion: the question is not to create entrepreneurial enclaves but to disseminate this culture in all large organizations.

Bureaucracy kills commitment and efficiency

The culprit is therefore the bureaucracy which is seen as a kind of disease which defends the company against “transformative genes” and handicaps it in its daily functioning.

With a non-zero impact on employee engagement, we know that.

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However, other models are possible and Hamel gives us some now well-known examples:

  • HCL and its CEO Vineet Nayar.
  • Haier, which operates 4,000 business units with only 3 hierarchical levels, logics of platforms, autonomy and “venture capitalism” to co-finance innovation and share profits with co-investors.

These examples are not new. On this point Hamel continues to surf on his latest book released a few years ago and that it comes to us in a different light every year. Hamel is like a great chef: he has his “signature” dishes, serves them and replenishes them at will, but they are always served and presented as well.

More interestingly, Hamel has launched two concrete initiatives to push bureaucracy out of our companies:

At this stage his research shows that Bureaucracy would cost the US economy 3 billion dollars each year and 9 at the OECD level.

Can we digitize a bureaucratic organization?

Here is what is about the Hamel show. Now beyond the cleverly marketed “buzzwords” we must try to make things “land”. Inspiration without action only generates disappointment and frustration.

If Hamel sells his idea perfectly, the subject is neither new nor difficult to sell: everyone has been aware of it for decades. Peter Drucker shot the first shot over 40 years ago and yet nothing has changed. Or so little.

Can the “digitalization” of organizations help? I hardly believe it any more. De-bureaucratization is a necessary condition for digitization, not its consequence. Of course, we can bet on a ripple effect, a little digital leads to a little less bureaucracy and so on. But from there to thinking about arriving at a transformation within a reasonable timeframe, there is a step that I will not take. Moreover, according to my own definition of digital transformation, it is above all a process of simplification. Which brings us back to the same problems that Hamel poses. The story of the chicken and the egg.

Another approach is to be found at Yves Morieux who finally talks to us about the same subject with a different approach. It is through collaboration that we respond to the complication according to Morieux but, again, anyone who has been attached to the subject of collaboration in business knows that it requires upstream structural reforms, unpopular and painful reforms that impose to cut “in the hard”.

Build outside the traditional company the start-up that will carry the model of tomorrow and end up swallowing up its parent company or emptying it of its business? It is a path that I see more and more large companies taking.

So yes the bureaucracy is consensus against it. However, if it is difficult to avoid it when growing up, it is even more difficult to get rid of it once the company suffers from bureausclerosis (in Hamel’s words).

So yes the subject is easy. There is consensus on the problem and the solution. All that is lacking is the courage and acceptance of the social body, and that nobody can sell it.

However, no company will be able to sustainably afford to suffer the organizational complication described by Morieux (see link above) or not experience what I call “the syndrome of the Polish assistant”. When he took office in 2008 as CEO of Alcatel Lucent, Ben Verwayyen saw a request arrive in his mailbox to validate the recruitment of an assistant in Poland. The bureaucratic system had worked wonders since to reach it the email had been “forwarded” by 16 people, each wishing to cover themselves, Vervayyen being the 17th hierarchical level there was no longer anyone to ask the question above.

And you? How would you qualify the company in which you work? Are things being done to reduce the bureaucratic footprint? Have you tried Hamel’s online course on “Busting Bureaucracy” ?. Your comments are welcome.

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bertrand-duperrinBertrand Duperrin is Digital Transformation Practice Leader in Emakina. He was previously consulting director at Nextmodernity, a firm in the field of business transformation and management through social business and the use of social technologies.

He regularly deals with social media news on his blog.

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