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Benjamin Drury - October 9, 2018

Culture Truth #7 – Beware the bureaucracy!

“Relentlessly seek out the best practices to achieve your big a-ha, whether inside or out, adapt them and continually improve them.”
Jack Welch

If you were writing a unofficial handbook for new recruits at your organisation what would it include? How big would it be? How many dos and don’ts would it contain? Would it match the official one that your organisation gives to new starters?

For many years, new recruits at Nordstrom, an American upscale fashion retailer, were given a simple 5-by-8-inch card containing just 75 words:

“Welcome to Nordstrom. We’re glad to have you with our Company. Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them.

Nordstrom Rules: Rule #1: Use best judgment in all situations. There will be no additional rules.

Please feel free to ask your department manager, store manager, or division general manager any question at any time.”

At Nordstrom, employees aren’t just given responsibility, they are given authority too. They are given permission to do their job within the confines of the Nordstrom mission and values to provide outstanding customer service but they are free to decide how best to do their job.

This is the heart of what it means to hire a team that gets the mission. A community of like-minded people with a passion, freed to be brilliant at what they do. But it’s not easy to accomplish in today’s world. Times have changed. Business is now only just catching up.

At the turn of the nineteenth century the world was based around an agricultural economy. Farmers had livestock and grew produce, trading them nationally and globally. Economics were simple and obvious. Then, during the nineteenth century, all that changed and the world moved into the industrial age. Factories sprang up, manufacturing thrived and people moved from the fields to the cities.

During the Industrial Age, the key to success was efficiency and the most valuable assets were the means of production – the expensive machines. People were needed to operate the machines, but not to think or make decisions. All they needed to do was simply follow the prescribed procedures. People were a resource, but they were not assets. A lot of medium to large businesses are still living in this epoch of thinking. Unfortunately, their employees are not.

Commerce has moved into the Information Age, where people ARE the means of production – the expensive machines of the Industrial Age. People are now valuable assets and need to be released to produce. However, many organisations still work to the paradigm of the Industrial Age, where workers are nothing more than resources who follow instructions. Unfortunately, this system will no longer produce the best results. Like Nordstrom, organisations need to recognise their workers as assets and set them free to perform.
As Theodore Malloch points out “critics of capitalism in the last century did not deny that the industrial revolution had drastically increased wealth, but that it had reduced individuals to an impersonal cog in the wealth machine.” Too many policies and procedures in large organisations continue to make this a reality, with people reduced to cogs or simply a usable resource in the HR database.

Jack Welch once shared a significant epiphany when he had an unexpected conversation with one employee who told him “for twenty five years you paid for my hands when you could have had my brain as well – for nothing.”

People are not just unemotional resources. In fact the alternative is actually much simpler to manage if we can get it right. Hire the right people and trust them to do what needs to be done.

If we can get our recruitment processes correct and ensure that we have people who are not only skilled for the role, but also share a passion for the missions, values and vision, and fit the culture of our organisation, then we are unlikely to have to resort to creating reams of regulating policies and procedures, just to keep them drifting outside of our expected behaviours.

Jim Nordstrom, CEO and the grandson of Nordstrom’s founder, was once questioned in a Stanford Business School class about what his staff would do if a customer attempted to return a dress that had clearly been worn. His answer sums up what it means to employ the right people and cut them loose to do the right thing with authority and responsibility:

“I don’t know. That’s the honest answer. But I do have a high level of confidence that…the customer would feel well treated and served…We view our people as sales professionals. They don’t need rules. They need basic guideposts, but not rules. You can do anything you need to at Nordstrom to get the job done, just so long as you live up to our basic values and standards.”
Jim Nordstrom

Richard Branson, chairman of Virgin shares this belief. “All you can do is hire the right people and empower them to sort things out as they happen.”

If you have employed the right people and the right leaders, if you have the right metrics and rewards in place, you shouldn’t need vast amounts of policies. Nevertheless, whatever policies and procedures you do implement, just like the metrics and rewards, should consistently and constantly reinforce the mission, values and vision of your organisation. Put simply: implement the fewest possible policies and procedures necessary to make it easy for your team to exercise their role well and meet their responsibilities. Avoid bureaucracy at all costs.

Culture TRUTH #7
Bureaucracy is merely a sledge hammer used to compensate
for incompetence and lack of discipline.

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