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How Bureaucracy Kills Creativity And Innovation At Big Companies

One of the many great things about working in a innovative, high-growth company is the lack of bureaucracy.

I’m not talking about the paperwork and paper pushing kind. I’m talking about what Gary Hamel rightly defines as:

“Strategy gets set at the top. Power trickles down. Big leaders appoint little leaders. Individuals compete for promotion. Compensation correlates with rank. Tasks are assigned. Managers assess performance. Rules tightly circumscribe discretion.

Bureaucracy “constitutes the operating system for virtually every large-scale organisation on the planet. It is the unchallenged tenets of bureaucracy that disable our organisations.”

Xero chief marketing officer Andy Lark. Image: Supplied.

We fight its existence. That doesn’t mean we don’t have processes and some of the checks and balances a good company should have. What it does mean is that deep in the culture is the capacity for making, creating and doing.

SMBs have an opportunity to smash it early and lay the platform for growth. Its about establishing the ethos and culture early enough that you don’t face the insurmountable task of tacking it later. Its a deeper cultural and attitudinal bent that enables a company like Xero, Vend or Simple compete successfully with large incumbents.

It is nearly impossible to replicate and highly perishable. I’ve seen it ferment in large organisations only to be quashed by incoming leaders, not by direct mandate but through subtle cultural cues.

The cultural contrasts between a company where bureaucracy is minimal and one where it is maximised are clear if you have every lived and worked in both. Little things stand out. The first values individualism and the quality of work. The second values conformity and standardisation of work. The first values ideas and impact. The second values marginal and non disruptive improvement.

Companies that are creating immense value and game-changing new platforms are those who have effectively sidelined bureaucracy in favour of a new way of working.

So, how will you smash bureaucracy in 2015 and turn it to a competitive advantage?

Andy Lark is the chief marketing officer of Xero – Australia’s most innovative company and global cloud accounting software leader. He is an investor and board member of start-ups and publicly traded enterprises in Australia and NZ.

This post originally appeared on Medium.

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