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These organisational topics are important and there are dynamics here that the article doesn't emphasis on what and why this "Bureaucrat Mode" happens. When co
by roenxi 2y ago
These organisational topics are important and there are dynamics here that the article doesn't emphasis on what and why this "Bureaucrat Mode" happens.
When companies are founded, there must be people involved who can execute a large chunk of the value chain single handily (if not the entire thing). Like a restauranteer who can buy ingredients, cook them, put together an interesting menu, engage in entertaining chit-chat, knows how to advertise and is good with finances.
In a large company though accountability matters a lot more and comparative advantage becomes a factor. It is also hard to hire great generalists (50% chance someone has a specific skill, that combination above is already approaching 1:100, let alone being good at something). So you specialise - there is a procurement specialist, a chef, a menu designer, a hostess, etc, etc.
Shortly after that transition there are still old hands around in leadership positions who know the entire value chain, but they slowly leave the business. Eventually there is a group of subject matter experts who execute the known chain really efficiently but no longer have personal or even institutional knowledge of how to set up a valuable new process because they specialise (theory of comparative advantage style logic kicks in). At this point, the dictatorial centralised nature of the company becomes a problem. If change is required, it depends on a tiny pool of leaders who are personally unclear on how the thing they control works at the micro level because they don't have the skillset required to set up new businesses. The only safe option is to iterate on the existing process, the company simply isn't capable of radical change any more. Or if it is, success will be more of a fluke than a predictable thing.