NOVEMBER 11, 2021
9 min read
No one would argue today that red tape bureaucracy is a double-edged sword. It may serve you well if you apply its principles to the right processes when it comes to both business or government affairs. But if you abuse bureaucracy, the odds are that your organisation may fall victim to the cruel reality, getting stuck in an endless Saṃsāra of paperwork and regulations. What is red tape, you may ask? In case you’ve never been to 17th-century England, it must be clarified that then officials, as well as policymakers, used red tape to bind legal documents. Since then, people refer to the term whenever implying redundant fussiness and bureaucratic approach to conducting government or business activities.
Although corporate bureaucracy is not as widespread as its government-related counterpart, it still impedes business development in many industries. According to a fresh 2021 survey, 11% of small businesses in the US consider government regulations a weighty problem for their growth. Still, the same statistics indicate that federal bureaucracy isn’t their worst enemy, inasmuch as 28% of this survey’s respondents claim that labour quality is what retards the development of small businesses. Notwithstanding that red tape has once been treasured as an innovative workflow management tool, today corporate bureaucracy is usually avoided. And there are persuasive reasons why.
In fact, a considerable number of present-day companies operate under the aegis of Agile methodology. It means that, unlike Waterfall-based workflows, the Agile software development lifecycle presupposes a minimal emphasis on documentation with a clear focus on iteration, communication with stakeholders, and adaptation to new circumstances. In this respect, bureaucratic red tape proves unnecessary and devours precious time. Just don’t get it wrong — maintaining clear documentation is essential even for Agile teams, but all the pipelines must be product- and customer-oriented.
What Is Bureaucracy? — The Business Perspective
So, what is bureaucracy from government and business perspectives? Fundamentally, it’s Max Weber who must be praised as the first scholar to study the phenomenon itself and popularise it in academia. Since the release of his opus magnum Economy and Society in about 1921, things have changed significantly. Yet, the truth remains that bureaucracy fosters rigid labour division, institutions’ formalisation, hierarchical structure, restriction to regulations, as well as document-specified decision making. Most often, red tape is criticised precisely for making companies stiff, immobile, inflexible, and oriented on paperwork instead of aiming at cooperation, communication, customer experience and satisfaction, etc.
But the devil isn’t so black as he’s painted, right? The same goes for Weberian bureaucracy. If you turn a blind eye to its conspicuous range of drawbacks, it’s possible to witness a couple of relative advantages. Why relative? Because they would depend on the type of your organisation and activity.
- Efficient delegation thanks to clearly outlined hierarchies;
- High level of accountability and accuracy;
- Understandable division of labour and decision making;
- Impersonation and lack of favouritism;
- Good predictability and control;
- Clear and transparent goals, tasks, objectives, etc.;
- Sufficient scope for scalability;
- Straightforward acquisitions and mergers.
What about the most common and prevalent disadvantages triggered by a bureaucratic approach to conducting business?
- Deficiency of innovation and need to promote it;
- Less freedom and scope for creativity;
- Reduction of opportunism, encouragement, and motivation;
- Vast wage gaps;
- Orientation towards accountability and answerability;
- Rigid organisational structure and behaviour;
- Impersonality (correct, it can be classified as both a weakness and strength);
- Excessive paperwork and the red tape itself.
Most Widely Abused Types of Bureaucracy in Business
Types of bureaucracy aren’t even types as such. In turn, they can be referred to as models, including the Weberian, Monopolistic, and Acquisitive ones. Primarily, being the ideal bureaucratic model developed by Max Weber, the first ‘type’ presupposes hierarchical, apolitical, and formal operation. The Monopolistic model touches more upon the government bureaucracy, implying that official institutions frequently abuse their power due to the absence of competitors. Finally, the Acquisitive model of bureaucracy describes entities and organisations that operate in competitive environments, are thirsty for power, as well as recognise the need to continually develop in the context of limited resources.
But what business aspects choke on the red tape of bureaucracy?
- Innovation/creativity. Redundant paperwork and strict adherence to unnecessary rules thwart employees’ desire to offer never-before-seen solutions, which is a core concept in the global business industry that rests on post-capitalism.
- Initiative/motivation. If your employees are overwhelmed with official documents to sign, blanks to send, and papers to fill in, sooner or later, the company will suffer from the lack of initiative. Why take risks if the salary is fixed and the administration doesn’t require workers to offer their viewpoint or potential solutions?
- Competition/power. At the highest level, your business loses the game of capitalism if it drowns in paperwork, orients towards a rigid plan, isn’t prone to risk-taking, and misallocates hierarchical power.
Sounds unpromising, right? It’s discouraging when employees fall by the wayside and there’s nothing you can do to keep the ship afloat. A quick tip is to discard a redundant layer of red tape and leave the essential one. But if you need a more specific course of action, it’s highly recommended to read on!
Red Tape Bureaucracy as a Dead Weight in Agile Teams
Can employees remain productive and creative if they spend much of their day responding to emails, sending copies of documents, and signing them? What bureaucracy does right is helping delegate responsibility and divide labour sufficiently equally so that a person who performs creative tasks doesn’t get overwhelmed with paperwork or never-ending meetings. Given a reasonable approach, even bureaucracy can be tamed and turned into an ally.
But is red tape a dead weight for Agile teams? Even Weber himself claimed that too much bureaucracy can turn a company into an iron cage that dehumanises personnel and restricts their potential. According to Harvard Business Review, two-thirds of employees working in Agile teams show higher morale, performance, adaptability, and high-level management skills even without a CEO’s awareness or direct supervision.
So, what are the fundamental principles associated with that mysterious Agile approach?
- Foster continual learning and improvement;
- Ensure employee satisfaction and happiness because they’re more significant than paperwork;
- Simplify tasks and break them down into smaller objectives;
- Concentrate on what’s valuable: customer satisfaction, expectations, and quality;
- Teach others and provide smooth onboarding for new team members;
- Maintain communication;
- Be eager to take risks and adapt documentation to the project or product, not vice versa.
Is there a place for red tape in such teams? Beyond question, departments and companies practising this workflow also must maintain clear documentation but it’s not the focus. Moreover, it’s always better to divide labour. That is, someone’s good at keeping documents clean, while others are better at performing creative tasks, so don’t blend everything into a cocktail labelled as red tape.
Examples of Red Tape in Bureaucracy: How Not to Manage a Team
Creativity and bureaucracy — the dichotomy of mutually exclusive antinomies or a combined concept whereby businesses must abide? That’s the question a philosopher would ask. What about a hardened business tycoon? They’d probably agree that any organisation has to combine the two worlds in order to remain competitive and innovative. But let’s better speak about how not to manage a team and what red tape manifestations must businesses eschew within the IT sector. In particular, corporate bureaucracy examples to minimise include excessive paperwork, impossibility to make a corporate-level decision without multiple approvals or signatures, infinite license obtaining procedures, etc.
Below you will find a few signs of redundant red tape that should be considered a marker that your organisation or team is managed in an old-school fashion:
- Your company/team has recently grown but you stick to previous plans, methods, structures, systems, and technology;
- Your company/team can’t make a move without someone else’s approval, signature, order, etc.;
- Your company/team loses the customer base due to many complaints, increased costs, and the lack of communication;
- Your company/team fails to adapt to new market conditions;
- Your company/team’s costs per unit continually grow.
If you notice at least some markers of bureaucracy, don’t worry. DashDevs will soon reveal the truth about breaking free from these red-painted chains.
Chaotic Creativity Under Control or Flexible Documentation?
As you may have already noticed, mutually exclusive opposites are bad for business. It’s never totally black or white. A modicum of bureaucracy mixed with creative chaos let loose may become a formula for success. For what companies this blend may prove helpful?
- Any big tech player out there. Microsoft, Google, Amazon, and any other large organisation involved in offering digital products as well as services make use of the hybrid approach to keeping their workflows tidy. The utter absence of documentation would quickly make their work a mess. Each department is responsible for a specific spectrum of tasks, so there’s no confusion and collision. Undoubtedly, big tech companies are also subject to red tape but their scale enables them to stay competitive while struggling with bureaucratic manifestations.
- Big video game development studios. Ubisoft, Capcom, and CD Projekt RED quite frequently walk on a thin line towards creativity while being afraid of falling into the lava of red tape. Notably, almost 45% of respondents in the 2019 survey stated that bureaucracy and administrative obstacles made up the bulk of factors negatively influencing game developer companies in Warsaw. Simultaneously, almost every Chinese video game development studio needs to continually operate under strict government regulations and agendas, which severely impedes their progress.
- Fintech and banking organisations. Apart from solely traditional financial institutions that entirely rely on bureaucratic methods, those operating on the verge of innovation require a hybrid model. For instance, PayPal, Acorns, Braintree, and other fintech companies always avail themselves of the Agile approach mixed with bureaucracy because they wouldn’t survive without setting the groundwork for a small portion of red tape.
Cases When Red Tape Is Better Than Sheer Flight of Imagination
When Maintaining Software Documentation
It’s not a secret that clean documentation ensures better onboarding, helps read legacy code, smoothes the workflow, and enhances accountability. Software development companies just can’t operate without maintaining various types of essential documentation, like the one shedding light on the process, product, planning, metrics, scheduling, system, etc. Just properly allocate time and human resources as well as schedule tasks to emphasise creativity instead of documentation.
When You Need Accurate Accounting and Answerability
Bureaucracy comes into play whenever there’s space for accounting and answerability. As a product owner, you need to be aware of the return on investment (ROI), generated revenue, performance rates by each unit, and other important stuff. But keep everything in well-balanced proportions.
When You Work in a Government or Research Institution
You won’t get good results if you’re a scientist or government official who shuns away from bureaucracy. Again, try to stow your work into the golden mean.
When Your Company Deals with Economic and/or Financial Assets
As mentioned above, fintech companies and banking institutions must depend on a certain level of red tape to stay functional, flexible, and competitive. It’s a must to be mindful of the stock market’s value, each rival’s market share, statistical data regarding your company’s operation area, etc.
When Your Organisation Has Grown into a Giant
If you’ve already grown into a tech colossus, you’ve got a sufficient number of departments to allocate tasks and resources correctly so that some units have a way with papers, whereas others deal with unique solutions. Creativity kills bureaucracy and vice versa only in small and middle-scale organisations that only struggle to win their place in the sun.
So Is It Possible to Find the Middle Ground?
Finding the middle ground for your specific corporate identity is probably the toughest challenge. As soon as red tape is detected and eliminated or mitigated, start practising the hybrid model. It’ll by no means serve you well until you find your loyal audience.
Don’t forget to address the DashDevs team if you’ve stumbled on difficulties of any kind within the fintech domain. What you’ll receive is immediate feedback, constructive, research-based assistance, and quality communication.