How Bureaucracy Crushes Innovation

The notion that bureaucracy crushes innovative ideas is nothing new, and the notion that a small company with little administrative process can easily out-maneuver larger organizations with greater resources is generally accepted or presented as an apathetic excuse for lack of progress so often that it's become virtually axiomatic. But how does this happen?

My sense (and sadly, my experience) is that great ideas occur even within the confines of heavily bureaucratized organizations, but are crushed before they can come to fruition, largely because of the internal politics. And to escape from yet another abstraction, by "politics" I mean the conflict among priorities among various parties within an organization.

To run through the process:

An innovative idea generally occurs when an individual stumbles across an idea for an improvement to the product, generally driven by notions of quality. The stimulus for most great ideas, I believe, is focused on the needs of the customer, and geared toward some facet of the product that makes it better for the consumer - whether it's the design of the product itself, the way in which it is distributed or marketed, or the way in which the customer is supported after the purchase.

I want to underscore the notion that it is an individual who comes up with the idea. While teams, groups, and departments may contribute to an idea and "help" to develop it, cognition and discovery take place in the single mind of a single person: there is no collective consciousness that causes multiple people to come up with the same idea simultaneously - one person has an idea.

And this is the first stumbling block: the individual communicates the idea to others close to themselves: their boss, their team, their department. At that point, the idea is developed - some people will help to improve the idea itself, some people will compromise the idea to forward their own agenda, some will contribute just to be part of the action.

This is not necessarily evil: those who seek to jump on the bandwagon may be motivated by the desire to undermine the idea, or to claim credit for it, but to assume this is the primary motive of every such person is overly pessimistic. In a healthy team culture, the motivation is simply to help a colleague, and the people who seek to contribute, whether by suggesting ideas of their own or providing a critical perspective, have the intention to improve the idea.

If the innovation survives this first test, it's the presented to others who have the authority to provide resources to develop and implement the idea. Typically, these are the accountants and financiers, whose sole agenda is to determine whether the notion makes sense from a monetary perspective: will it generate a profit? To be worth investment, there must be a return: either by increased revenue or decreased expenses.

Neither is this necessarily evil: the difference between a business and a charity is that the former seeks to make money for its investors. The greatest idea, one that makes the product an ideal solution to customer needs, isn't worth pursuing if the business is going to lose money (or make less money) on every sale because the costs exceed the benefits.

If the innovation survives the accounting tests, there is then a period of development, which includes both the planning stage and the execution stage. This is a minefield for innovative ideas, where there are a multitude of people, each with their own agenda, who will see any new idea as a bundle of opportunities and threats.

And again, this is not necessarily evil. For example, an operations manager might be concerned about the stability and security of the operation for which he is responsible - the resistance to innovation is not necessarily an ignorant fear of change, but often a more rational and calculated concern over the impact of the new development to the existing operation.

And finally, the idea that has made it this far down the belt-line is launched, them managed by operations staff, where the watchwords are "faster" and "cheaper," to which "better" is very often sacrificed. Unless the innovation is for an efficiency improvement, the additional effort necessary to execute upon a new idea is regarded as an inefficiency to be reduced or eliminated. And while the idea might be implemented as intended, over time, changes made to improve efficiency may undermine its effectiveness.

As such, these conflicting agendas tend to crush innovative ideas, or modify them to the point where they no longer achieve their intended results.