Is Your Business Falling Into 'The Big Rut'?

There are three keys to ensuring that a reasonable dependence on systems and processes doesn't swell into arthritic bureaucracy.
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Over-dependence on systems and processes is natural to a particular stage in any organization's development -- one which I call 'Treadmill.' While we've all experienced the frustrating tendrils of this kind of bureaucracy, it actually becomes highly dangerous if complexity and redundancy begin to distort reality.

Treadmill usually occurs after a fast-growing company has begun to introduce systems and processes to tame the creative chaos it has unleashed. Too often, leaders see the benefits those systems and processes bring, and then overdo it. Google is a good example (in its core search activity), as is Disney, whose very existence depends on staying innovative and not succumbing to creativity-sapping bureaucracy (currently, it's losing the battle).

Left unchecked, an organization in Treadmill will slide inexorably into the next stage in decline, an almost-always fatal stage I've labeled 'The Big Rut'. When it's in The Big Rut, the organization is so far in the grip of systems, processes and procedures that creativity, risk-taking and real entrepreneurial zeal and passion are almost completely extinguished. The creative burst that spurred the company to success is gone: the mavericks, boundary-oversteppers and entrepreneurial types are slowly expunged (or expunge themselves) and there is no-one left in senior positions who will wave a red flag and stop the company's inevitable decline into irrelevancy.

So, how does senior management of an organization in Treadmill prevent a decline into The Big Rut? There are three keys to ensuring that a reasonable dependence on systems and processes doesn't swell into arthritic bureaucracy:

1. Re-tool your hiring process

The number one amplifier of bureaucracy for any organization in Treadmill is the hiring process. Once the organization discovers the real benefits of adhering to good systems, the tendency is to emphasize compliance and detail-orientation when hiring new people, at the expense of initiative and risk-taking. These new hires then in turn hire in their own image, and the organization is populated with systems-focused types who value form over function, efficiency over effectiveness, compliance over results.

The key to staying out of The Big Rut lies in introducing the word 'and' into your hiring profiles: by redefining the must-haves for new hires to identify people who value compliance AND initiative, a systems mindset AND creativity, compliance AND effectiveness.

Netflix is a great example of a rapidly growing organization that gets this -- as can be clearly seen in the 'must-haves' they look for in new hires (and note -- they have this slideshow embedded right into the job page on their own web site so all potential new employees are well aware of what the company is looking for).

2. Refresh your performance assessment process

When an organization reaches Treadmill, the performance assessment process typically begins to focus on non-compliance and infractions -- what this person didn't do in the period under review -- rather than on the successes they achieved, and how the organization can 'bottle' and repeat that success.

To avoid sliding into The Big Rut, the performance assessment process must be re-focused to emphasize and encourage those entrepreneurial activities that keep the organization flexible and vibrant: what did this person do that was exceptional, showed initiative and was creative (even if they failed)? How can the organization learn from both their successes and their failures? How can we repeat this person's successes in a wider context (and not just punish failure)?

One impressive example of this is in Cisco's leadership competency model: CLEAD (Collaborate, Learn, Execute, Accelerate, Disrupt). Out of all the leadership competencies Cisco could have included, during all the kill-me-now, do-we-have-to-discuss-this-again meetings that I'm sure they had, somebody worked hard to get 'disrupt' in there -- and assessing key people against their ability to disrupt is exactly what's needed to stay out of The Big Rut.

3. Provide a safe mentoring environment

The third major amplifier of bureaucracy in Treadmill is the pressure to adhere to systems and processes in real time: it sucks the entrepreneurial air out of the organization, negating the opportunity for people to experiment, take risks and show initiative.

A great way to counter this is to provide a mentoring program which doesn't mirror the reporting lines in the organization, thus providing people with a safe environment in which they can try out ideas and experiment, without worrying that they might invoke a career-limiting reaction from their manager and supervisor -- GE has been renowned for this for years, providing even entry-level leaders with structured cross-functional mentoring to encourage creative thinking.

An additional secondary 'win' can be achieved by asking those mavericks, boundary-oversteppers and entrepreneurial types -- who otherwise may well be looking for greener, less hidebound pastures to work in -- to act as the mentors.

Take a close look at your systems and processes -- are they providing a safe haven for entrepreneurial risk-taking, creativity and initiative or are they choking the life out of your business?

Want to know how close you are to Treadmill, or (gulp) The Big Rut? Take the Predictable Success Lifecycle Quiz.

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