Bureaucratic Vs. Organic Organizations

The arrival of bureaucracies was a great advancement for organzations, just as the assemby line was a breakthrough for manufacturing. It allowed for work to be done in a uniform and efficient manner.

Today, however, we often decry the bureaucratic form of organization and advocate for the more nimble, organic form of organization. So which is better?

If the work is routine, repetitive and fairly simple, bureaucracis wook pretty well. You can take unskilled workers, put them in specific roles with clearly defined tasks, and produce consistent results.

For example, maybe you receive thousands of written requests for information on "A", "B" or "C". You set up twenty employees who read the requests and return "Form A" if the request is for "A", "Form B" if the request is for "B", and the same with "C". The process flows smoothly as long as the requests are for A, B or C.

The problem comes when the request is for "X", or maybe a variation on "B". The organization simply is not capable of handling the request. A response likly will go back to the requester in the form of a pre-printed cover sheet with check boxes and a check beside "Could not fulfill request", or at best the request will be passed up to someone higher in the bureauracy.

The employee receiving the request does not have the knowledge or authority to think outside of the "box". They are taught to follow strict rules and regulation, not to think--that is the nature of bureauracies. While this tended to work in days when getting a response in a week or two was the norm, it is totally unacceptable in todays complex world characterized by instant communication.

So how does the process work in an organic organization? First, the standard requests are automated. Employees design and set up the systems, but the responses are automated. When there is a request that does not fit the system, it will be kicked out to a person. If it is a nimble, organic organization, that person will have both the training and authority to analyze the request and respond appropriately.

Nimble, organic, empowered organizations are essential in today's high-speed, information intense environment. Unfortunately, some of our organizations have not kept pace. Many government organizations and some large corporations are prime examples.

If the environment is fast paced and complex, the organization must be nimble, empowered and capable of dealing with complexity

The Entrepreneur's Emotional Roller Coaster

My wife is getting a Master's in Professional Counseling, so I hear a lot about psychological conditions and diagnoses. But I have not heard her talk about Entrepreneurs Emotional Roller Coaster. I don't think it is an official diagnosis, but I know it is real.

The emotional trauma of being an entrepreneur is really tough. There is the high of the new idea. The idea hits you while you are driving or in an important meeting. It is not that it came to you out of the blue, because you have been thinking about the idea for some time. But in an instance it clicks. And it is so clear and so obvious. You've got it. It is a winner.

For the next few days you have a hard time thinking about anything else. You refine the idea a little more. You start calculating the revenue for the first couple of years. And then you do a multiple of EBITDA and start thinking about the world travel you will be able to do--and all the other new business you will be able to start. It is a real high.

Then you go online and find almost exactly the same idea that someone else is doing. It hits you like a two by four. Wow. How could they have come up with something so similar. Then you think about it some more and realize that you do have a unique angle.

Then you start working on the business plan and raising capital. At first it is exciting and exhilarating. When you are on draft seven, however, is starts to get tedious. You wonder how each potential investor can come up with a unique question that requires you to do in depth research--do they get together and plan the harassment.

When you realize that the seventeenth investor you meet with really gets it, it is such a relief and another high. This is an influential investor and if he invests, you are confident that at least three others will invest also. You start calculating the multiple of EBITDA again.

Then, just before this investor plans to execute the documents and write the check, the CEO of one of his other investments becomes gravely ill. And of course the investor decides that he has to put his focus on that company. He does not have time to do any new investments. Just how close can you get, and how low can you feel?

You start thinking about having to get a real job, and you really start feeling bad. Then out of the blue a friend of a friend calls and wants to meet . . .

Let's just call it EERC--Entrepreneurs Emotional Roller Coaster.