At times we can lock ourselves and our businesses onto a fixed path without even understanding that the decisions we are making today were set in concrete many years ago. In a world in which so many things are changing, you cannot permit your business to be locked onto a railroad.
Active Knowledge Question:
Is your business effectively railroaded and you don’t even know how this happened?
Building The Railway
It can, and does, take years to build a successful business that actually earns a decent profit. And in building that business everyone’s focus is on moving forward and at times we can miss the fact that we are locking the business onto a fixed path.
The analogy of building a railroad is not a bad one as you plot the route, buy the land, lay the rails and sleepers, acquire the engines and carriages, recruit and train the staff and finally open your railway. But once the rail tracks are laid its path is fixed and change can be either impossible or very expensive.
As we build our business, we are potentially creating ‘underneath’ it a railroad, but in business we should seek to avoid being locked down in any substantial way where possible. So how does this happen? As we build our business, we create paradigms and bureaucracy without even thinking about them. These form our railroad:
- The paradigms are worldviews created from what has worked for our business, where we have fitted into the market and the way the industry works. It is our business’s knowledge of what it needs to do to be successful but typically based upon what has worked for it in the past.
- Our bureaucracy reflects the processes, regulations, systems and the layers of authority that have been built as the business has grown. In one sense, it is the way we have learnt to do business.
Often this ‘railroad’ operates without much thought. It’s what happens within our business daily as we are looking outward and forward. It can be useful and strengthen our business and support its competitiveness, or it can be disastrous causing us to miss opportunities and become uncompetitive.
But it is of our own making and can be deconstructed; we just need to know what is good and what is not.
I would describe bad paradigms as ‘ways of thinking that block new possibilities and opportunities’.
Paradigms can be described in many ways but are simply mindsets, beliefs, managerial frameworks, conventional wisdom, or assumptions. But there is nothing simple about them, and they can reflect significant barriers, which often go unnoticed and unchallenged.
Unchallenged they instruct what is possible and what is not possible in the business, often at the subconscious level. Possibilities won’t even be considered if they conflict with an existing paradigm. You won’t even know what opportunities you are missing out on.
Paradigms lead to paralysis. Or possibly a better way to view their impact is that they can lock you onto train tracks where your path is fixed and pre-determined.
Paradigms can act as a bias; you won’t recognise them by looking at outcomes as they are self-ratifying.
The failure to search out, unearth, and challenge paradigms can be one of the greatest failings of leadership and is particularly prevalent in successful businesses. Why are they more prevalent in successful businesses? Success tends to blind leadership to the need to evolve and can reinforce a doubling down on the existing successful model.
Paradigms exist at the industry, business, and team levels. They will influence the way the industry competes, where your business fits into that industry and even how an individual team in your business operates. They will permeate the A-Z of your business and its operations.
Not all paradigms are bad, but all paradigms should be subject to review and questioning.
Leaders must be capable of deconstructing their business’s paradigms and foster a willingness to challenge conventional wisdom continually. If you see your leaders taking an incremental approach to the growth of the business that is merely an extension of the past, then you know paradigms are well entrenched.
I would describe unwanted bureaucracy as ‘process, regulations, and layers of authority that do little to support customer focus, customer value, efficiency, the effectiveness of delivery and individual contribution’.
If you were asked to draw what bureaucracy looks like in a business, you would probably start by sketching the organisational chart and listing people’s titles and positions. However, it’s a lot more complex than just the organisational chart and its tentacles can run deep into systems, processes, decision-making, budgeting, recruitment, rewards, culture – almost every area of the business.
Bureaucracy is really a tool of command and control and is generally designed to empower top-down authority rather than uplift customer value and competitiveness – and, therein, lies the problem.
In today’s competitive landscape, where adaptability, intimacy with client need, speed to market, engagement of all who work within and with the business, and where creativity and innovation are the tools of competitiveness, bureaucracy can quickly become the Achilles of many businesses.
Bureaucracy tends to form as a business grows bigger in size, as there is a general belief that size requires more regulation and oversight to control actions and behaviour. There are, of course, more effective ways to achieve direction, alignment and focus, which are really the intents of bureaucracy.
Purpose, simple guiding principles, culture, and trust are effective alternatives to bureaucracy as is adopting a corporate design principle founded in smallness.
When it comes to creating structures that are reflective of bureaucracy, the question to always ask is, how will this support an increase in customer value? If it doesn’t, then it serves no competitive purpose.
Businesses need to be competitively fit and strong, and that requires a succinct competitive posture, and an organisational design and capability to deliver. That fitness and strength requires that you be able to change and adapt as necessary to outcompete all others in your markets.
An entirely new level of performance.
Want to become a part of the Entrepreneurs+ Community and learn how to make your business competitively fit? Join now.
All the best in the success of your business,