Chaos Vs. Bureaucracy

You may not realize this but as an entrepreneur one of your main functions is finding the balance between chaos and bureaucracy. If you take a look at successful organizations you will see they have somehow found a happy medium between these two extremes. It is this balance that allows organizations to flourish and will be required if you want to take your company to the next level.

My first exposure to this dynamic came as I was trying to push a product line in an organization didn’t share my same directive.  The problem was that the product line required formal processes in order to continue to scale up but the organization as a whole operated on the “get-er-done” approach. Talk about frustrating, how is one supposed to facilitate the exponential growth of variability through putting out perpetual fires?

This lead me to a book that gave me a new perspective on managing growth. The book was

No Man’s Land: Where Growing Companies Fail.

I enjoyed the book in that it helped me communicate my dilemma but a few assertions it made could be discounted by the now non-existent financial organizations it referenced to.  One exert that I especially appreciate was;

“The resources and approaches that allowed for growth in the first place can be insufficient or an obstacle for growth in the future.”

This is so vital to long-term success. Understanding organizational needs change with growth is huge. This begins right after startup and continues through each stage your company passes through. The book focuses on one significant stage referred to as “No Mans Land”. This is the point at which a company is too big to be small and too small to be big.

So how does the size of an organization tie to the balance between chaos and bureaucracy? Generally speaking smaller organizations have fewer formal processes and operate under a flat management infrastructure. Larger organizations have more formal processes and operate under a hierarchical infrastructure. A deeper discussion on this and the small business advantage is discussed in the article The Advantages of Small Business. The balance however is not an easy one to find.

Small businesses on the “Chaos” side of the spectrum have a great flexibility and agility to fulfill the customer’s changing needs in a moment’s notice but don’t have the ability to handle large volumes. Larger businesses on the “Bureaucratic” side have the ability to facilitate a common need over and over again at a high volume but lack the ability to change to accommodate a custom need. Too much towards Chaos and you will find yourself with a lot of waist, rework, and similar inefficiencies; too much toward Bureaucracy and you will find yourself buried in formalities, paperwork, and pointless meetings.  

So what is the answer? In short it is finding the right people. The intricacies of your business are known only to you and your people and they are the ones that will make the day to day decisions that will allow you to not weigh your organization down with bureaucracy while simultaneously avoiding excess chaos. To be honest with you this can be a hard answer to swallow, it means we need to trust and invest in people. If you are able to do this however you will find your life and business begin to operate at a higher standard.   

So, you have the right people and your company begins to grow so much so you now find yourself approaching “No Man’s Land”. This means you are faced with the challenge of making a leap forward from a small business paradigm to a large business paradigm. You have hundreds of customers, thousands of products and simply can’t keep up given your current infrastructure. What do you do? If you are a restaurant perhaps you head towards franchising, if you are a designer perhaps you create a proprietary line or product, and if you are a manufacturer perhaps you simply gear up to handle a worldwide market place. That is if you are willing to make the leap. As Doug Tatum mentions in his book making the leap may not be the best choice for you and your organization.

What should you take away from all of this? Most of all understand that you won’t have all of the answers. Building a business is iterative and each step changes the game. You begin the learning cycle, build upon your intuition, keep the things that work, and get rid of the things that don’t. I would advise younger organization and entrepreneurs to simply dig in and work hard. A sole proprietor needs simply to push and push out of the gate and refine his or her game plane as the knowledgebase grows. Good business is meeting your customers’ needs it is not having immaculate paper work or flawless products. You will mess up but everyone does. Cater to your customer (within reason) and you and your company will have a bright future.    


About TJ

Engineer and Entrepreneur