A Third Obstacle: The Problem of Bureaucracy
No matter how successful any organization may be at the present, there is no guarantee of future success. The challenge is to break-through the natural assumption that future success is somehow guaranteed. In companies and organizations transitioning from small to large, for example, one must explicitly face the difficulty of emerging bureaucracy. Bureaucratization is a state in which employees work increasingly by fixed routine rather than through the exercise of intelligent judgment. With bureaucracy, narrowness in thinking emerges. There is a proliferation of hard-and-fast rules and fixed procedures—wrongly thought to contribute to efficiency and quality control. With bureaucracy in place, the original goal of an organization fades into the background. Individuals within the organization begin building small bastions of power and devising ways of warding off any potential threats to their power. Change is usually interpreted as a threat.
The problem of bureaucracy exists in virtually all large organizations—for example, in legal systems that sacrifice justice to power and expediency; in public health systems that poorly serve the health of the citizens; in schools that fail to educate; in governmental structures that serve the vested interests of those in power rather than the public. Large bureaucracies generate a vast network of regulations and tacit "strategies" that define "appropriate" rules of conduct. They stifle creativity and innovation. Important questions are coldly received. Thinking that challenges the status quo is stifled. Innovative thinking is dismissed as irresponsible, absurd, unreasonable, or impractical. Rules and regulations become ends in themselves rather than vehicles for reasonable decisions.
All organizations, even small ones, have a natural tendency toward stagnation. This includes a tendency to lose sight of their original goals, a tendency to begin to serve those who operate it rather than those it purports to serve. But largeness presents special problems. And large organizations that do not have to face any real competition are doubly at risk of becoming bureaucratic. Governmental bureaucracies, for example, are notorious for serving the vested interest of those who operate them, rather than the interests of those they were originally designed to serve. They typically respond only to public scandal or to the few with the external power to put political pressure on them. Rigidity and a lost sense of mission are their normal state.