Redefining productivity is needed because bureaucracy in companies creates a super structure of supervisors and managers that are not close to customers, blankets people, rules and procedures, and is costing the global economy more than $9 trillion. Redefining productivity and cutting bureaucracy by half will help to build a more dynamic economy. Gary Hamel from The Management Lab explains the benefits of redefining productivity.
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Redefining productivity with Gary Hamel: “Bureaucracy is humankind’s most ubiquitous social technology. This is the way we run large organizations in every country around the world and every sector and every economy. And yet it was essentially invented about 100 years ago for the purposes of controlling human beings at work, and we need control in our organizations.
On the other hand, bureaucracy creates a super structure of supervisors and managers and executives that are not close to customers. It blankets people and rules and procedures that often don’t add value, so our research today says that an excess of bureaucracy is costing the global economy more than $9 trillion in lost economic output. And you see organizations today: New Course Deal is one, Hire the Appliance Maker in Japan, W. L. Gore, a materials company.
You see organizations that are running large, complex businesses with less than half the bureaucratic load you find in most companies. So we think we need to fundamentally change the way we run large companies. We can get rid of at least half of the bureaucracy, and probably more, and doing so is going to allow people to be more innovative, to have more passion at work, more creative. So this is now really a matter of building a stronger, more dynamic economy by driving needless bureaucracy out of our institutions.”