Killing Bureacracy

1. Delivering Customer Aligned
Service Excellence
Killing Bureaucracy in the
Corporate – Top Tips
Thought Leadership Presentation
Prepared by
Charles Bennett
July 2014
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2. Inter-relationship between Bureaucracy, Cost Base, Customer
Experience and Profitability
Traditional Situation Leaning Process End
Profitability is directly related
To customer experience
but there is a change lag
Bureaucracy ( complexity and the impact of over control) directly impacts; cost base, service levels and
customer experience
Revenue is directly proportional to customer experience but there is a time lag in impact
Corporate Profitability is impacted by customer experience and complexity of process but most
companies do not sufficiently consider this
BUREAUCRACY
COST
PROFIT
CUSTOMER
EXPERIENCE
(Aligning organisation to Successful Customer Outcomes, and removing
waste from customer’s perspective simultaneously)
Traditional reductionist approaches
reduces cost but they may not reduce
Bureaucracy (approvals, check points,
Decisions) and often customer experience

3. Bureaucracy in context
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Bureaucracy is all about process. Bureaucracy directly impacts cost base and directly impacts customer
experience. Customer experience is proportional to revenue but revenue impact always lags customer experience
in the context of the large corporate this would be 2 to 4 months.
Reduction of bureaucracy needs both a tactical and strategic focus but the “quick wins” can be achieve relatively
quickly. The tactical approach is best achieved via remediation of some of the more complex processes otherwise
it becomes an opinion based exercise where it takes a long time to gain agreement.
Everybody is going to have strong opinions as to what the best approach is going to be. By turning the
identification of bureaucracy identification opportunities into a process with some method behind it, you can
build momentum quite quickly and remove the opinion based ideas that most people lead with.
This is a function of process remediation and can be started quite quickly.

4. Understanding Bureaucracy (1)
Facts
• Bureaucratic organizational structures have numerous layers of management, cascading down
from senior executives to regional managers to departmental managers, all the way down to shift
supervisors who work alongside frontline employees. Due to the many layers of management,
decision-making authority has to pass through a larger number of layers than with flatter
organizations. Refund decisions, for example, may have to pass from frontline employees, through
shift supervisors, to store managers for a retail outlet in a bureaucratic company.
Significance
• In a bureaucratic organizational structure, authority is generally centred at the top, and
information generally flows from the top down. This usually encourages a company culture
focused on rules and standards, where operational processes are rigidly controlled with best-
practices methodologies and close supervision.
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5. Understanding Bureaucracy (2)
Advantages
• Top-level managers in bureaucratic organizational structures exercise a great deal of control over organizational strategy
decisions, which is ideal for business owners with a command and control style. Strategic decision-making time can be
shorter in a tall organizational structure, since less individuals are involved in the process. Standardization and best-
practices are often highlights in companies with tall organizational structures, ensuring that work is consistently
completed efficiently and effectively. Larger organisations benefit less from this than the newer smaller outfit
Disadvantages
• Bureaucratic structures can discourage creativity and innovation throughout the organization. No matter how ingenious
a business owner is, it is virtually impossible for a single individual to generate the range of strategic ideas possible in a
large, interdisciplinary group. Front-line employees may receive less satisfaction from their jobs in a rigidly bureaucratic
organization, increasing employee turnover rates. Organizations bound by rigid controls can also find themselves less
able to adapt to changing conditions in the marketplace, industry or legal environment.
• Financially bureaucratic organisations usually carry extra cost base created by the extra processes based around the
decision points, checks and controls
• Agility to change is impacted as companies cannot often quickly react to challenge or opportunity due to the reliance
on “heavy” checks and controls procedures
• As mentioned earlier Customer Experience is often negatively impacted. The focus on the checks and controls takes
away focus on customer and this has a delayed revenue impact which is often overlookedPage  5

6. Verdict
Considerations
• At first glance, bureaucratic organizational structures may seem less
desirable than flatter structures, but this is not always the case. Some
industries, such as IT organisations, may benefit from a more
autonomous structure, but others such as fast food benefit from
tighter controls and taller hierarchies.
• Every organisation needs a level of bureaucracy otherwise it is
exposed to all sorts of risks. Companies who are looking at reducing
bureaucracy are usually already feeling the impact of complexity of
process and onerous controls.
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7. Tactical vs Strategic Approaches
Removing bureaucracy in a bureaucratic organisation is often challenging as there
will always be stakeholders defending the need for those aspects that belong to
them. Tactical and Strategic focus often helps here.
1. Use a tactical deployment to reduce the most immediate issues. It is important
to include stakeholders so change is inclusive rather than imposed (fosters
resistance)
2. An inclusive approach needs to:
• Be non-opinion based i.e. there needs to be a methodology
• The methodology needs to be simple enough for the stakeholders to be able to understand and at least
contribute to it. Traditional “Best Practice” such as generic Lean Six Sigma is too complex. A tailored
“Lean Six Sigma for Service” which includes new and more agile tools works better.
3. Strategic implications include functional, organisation and performance
measure consideration. In the longer term e.g. 3 years if these are not
considered then the controls, complexity and cost will creep back
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8. 1. Make the tactical approach a process initiative
The approach needs to be non-opinion based as far as possible as well as
simple to apply, understandable and agile. Using a process initiative means
the “decision points” both explicit and implicit are identified. Decision
points impacts:
• The shape of a process (or activity stream)
• The complexity of process
• The experience of stakeholders and customers in the process
2 Top tips to remove bureaucracy…….

9. 2. Focus on the outcome not the problem
Outcome based methods ensure the risk areas identified are considered within the
remediated process. The outcome framework at high level consists of:
• Ensuring the operational risk outcomes are understood and delivered against
• Points of Failure and non-contributory Causes of Work are identified and removed
• Successful Customer Outcome for the process or work stream is enhanced
• Targets for change agility are quantified and delivered against
The removal of tactical bureaucracy issues are addressed but outcomes around risk,
customer and performance are simultaneously addressed
2 Top tips to remove bureaucracy…….

10. Training:
• Lean Six Sigma for service
• Advanced BPM methods
• Customer Expectation Management
Thought Leadership
 Research Centre into next practice
approaches
 Developing new advanced BPM,
customer centricity & innovation
methods
 White papers, articles and blogs
 Conferences, seminars and webinars
Training and Thought Leadership
 Driving operational excellence and
continuos improvement initiatives
 Developing customer strategies and
driving through to operational and
process change
 Customer experience management
 BPM and Lean Six Sigma deployments
 Project and programme management
Business and Operational Services
Managed Services
 Integrated functions
 Integrated managed functions
 Outsourcing
Kaizen Services
 Kaizen evaluation & grading system
 Kaizen office
Efficiency Services
 Efficiency base scorecard
 IT efficiency office
 Rapid efficiency assessment
IT Services
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11. Creating Service Excellence
Netforte helping you create a Service Excellence Partnership,
delivering customer outcomes that consistently satisfy or
exceed expectations.
A Service Delivery Framework that is transparent, repeatable,
easy to follow and resource independent.
This focus will help you solve the
3 biggest challenges facing organisations today:
• Customer Satisfaction
• Stakeholder/Employee Engagement & Commitment
• The consistent delivery of exceptional results
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