To: corporate managers, re: bureaucracy; don't send memos!

Washington Monthly, Nov, 1987 by Thomas J. Peters

To: Corporate Managers

Re: Bureaucracy

DON'T SEND MEMOS!

Moaning about bureaucracy is a time-honored management prerogative. Now, however, bureaucracy is beyond moaning about; it is a block to survival. The campaign against bureaucracy must become a priority of the first order. I cannot provide you with the will to do it. I can simply tell you that it can be done, that it must be done if we are no move faster and liberate people--managers and nonmanagers alike--to perform up to their potential.

Fortunately, there are people and firms that have beaten back bureaucracy's seemingly inevitable encroachment:

A division general manager in a large high-technology firm raised from $25 to $200 the amount his engineers could spend without getting approval. The accountants screamed. Following imposition of the new standard, spending plummeted 60 percent. He explained: "That wasn't the point, cutting costs. It was to quit treating them like kids. But you know what happened, of course. With the $25 limit, it was "Let's see how many $24.99s we can tack together without authorization.' It was a time-consuming game--"We can out-Mickey Mouse you, boss.' Now, with the $200, people say, in effect, "Hey, that's a lot of money I'm responsible for.' They look at it as theirs.'

In The Intuitive Manager, journalist Roy Rowan reports: "[Ross] Perot claims he operated a memo-less company. Like Napoleon, who reputedly tossed out all written reports from his generals, figuring he'd already heard the important news, Perot prefers to conduct all of his business by personal contact. "Written reports stifle creativity,' he says.'

The New York Times recently reported that antibureaucrat Ken Iverson of Nucor Corporation, a steel manufacturer, maintains an "executive dining room': "[He] has designated as the executive dining room the Chinese restaurant and delicatessen--usually the deli--in the shopping center across the street from Nucor's headquarters in Charlotte, N.C.'

Nordstrom, a $1.9 billion retailer, gets by with a one-sentence policy manual: "Use your best judgment at all times.'

Everyone talks about cutting red tape. A few do it. Why not the rest of us? How do you reduce the policy manual to a sentence? Or raise engineers' spending limits, in one step, by a factor of almost ten? Or stop sending memos?

Mars bars

Start with the voluminous rules. Betsy Sanders, vice-president of Nordstrom, acknowledges that the one-line "policy manual' drives Nordstrom's lawyers crazy. So be it, she adds. It liberates Nordstrom employees from an astonishing amount of Mickey Mouse. Sad to say, rule books are referred to only to slow action, defend turf, and assign blame. Have you ever heard of anyone going to a rule book to figure out how to speed things up?

The absence of rules manuals at Nordstrom has been anything but an invitation to chaos. Sanders says the supervisors' chief duty is to coach salespersons on "exactly what it means to "use your own best judgment.'' Hardly a design for madness. In fact, the absence of childish rules shifts the employees' focus of innovation from how to evade toilet break rules to precisely where the firm wishes it to be: in pursuit of serving the customer better.

At a Mars, Inc. subsidiary as well, fewer rules have meant less fuss--and more focus on the business task at hand. A labor contract was up for renewal. A rookie management negotiator set an objective about which most of his peers were highly skeptical--to replace the inch-thick document with one of five pages or less. He was successful, and grievances were cut to a trickle. There are simply no nitpicking details--"subparagraph 7.13b.2ii'--for either side to get hot and bothered about. Dayton Power & Light followed a similar path. After a year and a half of negotiations, they reduced the contract from 200 pages to 14, the first page being a statement of shared philosophy. In short order a profound change in attitude ensued, with people working together to confront problems.

Consider Worthington Industries, a steel and plastics manufacturer, which also has no rules manual. No union has been able to organize any of the company's field operations, but Worthington has acquired several unionized companies. Though top management strongly discourages applying pressure to decertify, five of the operations have done so. Worthington senior managers observe that employees have had little problem living without the protection of a union contract. Their supervisors, however, have had a devil of a time adjusting. One executive notes: "You just took away their reason for being. They were there, as they saw it, to administer the contract on management's behalf. They were there to catch guys goofing off. Now, suddenly, no rule book, no time clocks, no scheduled breaks [you take a break when you conveniently can], no locks on the tool-room door, no forms to be signed to check out a tool or a spare part. What's left for them to do? Very little, by the old standards. Some don't make the transition.'