In March of 2003 tensions between Iraq and the United States came to a boiling point. Which resulted in the United States invading Iraq through the Kuwaiti border. The war that was originally projected to last five-years came to a mission accomplished in conquering the country within two-months. Surprising the American military as they were unprepared for such a quick fall of Baghdad. The invading force was not ready to transform to an occupying force. During this government shakeup, thousands of Iraqi Army members and numerous civil servants were now unemployed leading to ensuing chaos that rapidly turned the Iraqi citizens against its occupiers. There was no reduced bureaucracy with layer upon layers of government management that stunted the United State’s transition of power.
During the first four-years, over 3,000 American casualties occurred, in three occasions the chemical weapon of chlorine gas was used, and during a one-month period, Iraq averaged a car bombing per day. The war was being managed through its many bureaucratic layers via Washington D.C. until in 2007 General David Petraeus was placed in command. Petraeus, who led 101st Airborne Division during the invasion of Iraq and was later the military governor of Mosul, also completed his doctoral dissertation on the lessons learned from the Vietnam Conflict.
He approached this conflict through the model of helping the Iraqis. This led him to put troops back into the city, to train and empower the Iraqi Defense Force, and establish civilian councils. This was labeled as the “Surge” as a reference to the temporary increase in troops returning to Iraq, but what it resembled more was a large scale experiment in civilian empowerment to have the people shape their future and not the bureaucrats halfway around the world away do it for them.
Hence, each layer of management slows and stops the flow of information. Individuals performing the value-added work, the process operators, and the client owners all have special and direct feedback on issues, insights, and innovations. However, bureaucratic layers remove their decision-making ability and ownership to enable their action. Certainly, with this inability to act is how their message and insights must travel through multiple layers of a management chain increasing the odds that the message will not effectively reach the ultimate decision-maker.
The flat organizations lead ideas into actions. For that reason, the organizational structure with little hierarchy where a manager can have upwards of twenty to thirty direct reports and puts more power in the hands of the problem owners. It enables quick reactions to ideas and it also provides an easier path for ideas to penetrate the entire organization.
Individual contributors have a unique advantage over any layer of management, they have the best microlevel insight. They often have direct access to customers and eyes on organizational problems as they occur. This being able to see the problem provides the perspective on how to design a solution and then implement it. When dealing with customers they have direct contact on what the problems are, what the customer experience is, and they can offer quick resolutions long before they develop into executive escalations. When an organization deemphasizes its bureaucratic levels, it puts the decision making and knowledge work at the lowest levels. Members fully immersed in the work with the ability to design the most creative solutions.
Originally, the design of bureaucracies was to capitalize on economies of scale to maximize efficiencies. They are highly effective at standardizing work and controlling risk. The counter is that each layer of management further separates customer feedback from the reach of those that control strategy and resources to effectively resolve issues. This can be highly disempowering of knowledge workers creating a feeling of an inability to effect positive change and it quickly converts engaged contributors to apathetic observers.
Many companies engage in consulting firms paying extremely high service fees for the same information that is in the organization already. Executives need to understand the state of the business and their clients, but they are relegated to bring in a consultant because a true self-assessment is disguised throughout the layers of bureaucracy. The consultants use focus groups and interviews to speak with the employees working on the line or directly working with clients to gain a true understanding of what is occurring. The consultants compile their findings for the executive team which is repurchasing a product that they already own.
In 1999 Nick Swinmurn initiated a small startup selling shoes under the name Shoesite.com. It soon took the name Zappos and the Bay Area company only needed four years to turn a profit. By 2009 it had achieved over one-billion in annual sales and was purchased by Amazon. Zappos attributed most of its success due to its unique culture. In fact, it led Amazon to leave the Zappos culture and organization intact and alone after their merger. In 2013 the company moved its core business to Las Vegas where most of its employees relocated with the company as they are routinely recognized by Fortune Magazine as one of the “100 Best Companies to Work For.”
Zappos is the premier customer service king in the online industry. Instead of focusing on customer service they focused on their culture. They hold the belief that it would lead to great customer experience. For example, everyone starts in a three-week orientation and training program before working a month in the call center. This not only bolsters the organizations call capacity during busy times but everyone in the organization stays in touch with the customer bringing the entire workforce in tune with their mission.
Zappos has also implemented a highly unique organizational structure. Called holocracy and defined by having no levels of organizational structure but encourages self-guided teams. Employing high levels of trust and empowerment make this approach work. For example, call center employees serve customers as fully empowered agents of Zappos. Employees do not use call scripts and management doesn’t provide approvals. Because their expectation is to “wow” their customer. Likewise, they have direct authority to solve their customer’s issues which have led to 75% of their sales coming from repeat customers. Therefore, their focus on culture to create a great customer experience led to the empowerment of being able to enable creative solutions for the customer without having to jump through bureaucratic hoops.
Andreski, S. (2006). Max Weber on Capitalism, Bureaucracy, and Religion. Abingdon, UK: Routledge.
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