Key Pointe publishes articles and writes a blog to inform and share best and sometimes worst practices. Today we are asking for your feedback on what business axioms or principles you have discovered which help you work better, faster or to understand business in a way that is unique, funny or provides that rare but special “ah ha” moment.
An example would be the ironies of the “Peter Principle” that states: “People rise to their level of incompetence.” There are many corollaries to this intriguing concept. My favorite is that major business decisions also rise to their level of incompetence. That is, the more critical a business decision, the more probable is that it will be taken away from the manager with expertise and be decided upon either in a steering committee (to avoid any accountability) or in the C-Suite where really awful decisions are sometimes rendered out of ignorance. While this principle is meant to foster discussion about the follies of some bureaucracies, all of us can relate to the IT conversion or major business blunder caused by executives who thought they knew…remember the new coke or the Edsel?
I can remember talking to a high level bureaucrat who announced that the Board had decided to immediately close a major call center. I paused, and said that adjusting work distribution would be critical as it had nearly 400 staff at work. He responded that I was incorrect and that no one was working there. I replied that I had just returned from a visit there last week, and that we had over 400 staff conducting business there today. A bureaucrat located remotely and especially at headquarters can be very dangerous to good decision-making!
My personal favorite business axiom is Parkinson’s Law, written by C. Northcote Parkinson in 1954: “Work expands to the time available.” Parkinson’s Law is the only management principle I can remember with clarity from my four collegiate years of study in administration, and it is one of the most irreverent but also insightful approaches to the discussion of how workload is not proportional to staffing within bureaucratic organizations. It reminds us that in the corporate world, one must understand human behavior, embrace humor and recognize a tendency by people to make foolish decisions especially when the standard decision-making policy is thwarted by executive management.
As a student or project manager, it is critical to determine how much time a task will take or it will naturally expand to 2 or 3 times the actual amount of time needed. As students we quickly learned this fact after laboring several days on a paper while as seniors, we would start the project two hours before the deadline and do surprisingly well. While this principle is well known, fewer and fewer people apply it today. Most business schools and certainly nearly all governments have forgotten its importance. One only has to look at the state of governments across the globe to recognize that the tendency to grow bureaucracies is fundamental and that such organizations have absolutely no knowledge of how to manage time and work. I know the first example to come to mind is the DMV.
Another more serious example of Parkinson’s Law’s insidious nature is the bureaucrat’s tendency to seek complexity rather than simplicity. Take the process of how America’s laws are codified and regulated. Whether it is the new health care law or Dodd-Frank, the means to develop a law has become as large a bureaucracy as those helping us unravel the mystery of our tax code in America. It does explain why there are so many lawyers and how society continues to creates work for them.
To reduce any government agency will supposedly cause a calamity of epic proportions. The austerity plans in Europe and at our own local governments is yet to be embraced by our national government who always finds a reason to ignore its committee recommendations and defer decisions by kicking the most difficult issues down the road. This is not how the most admired corporations work and perhaps why there sometimes seems to be a real friction between business and government. Civil servants are not supposed to be productive but to spend all the money in their budgets or face a draconian cut in next year’s funding and resources. The incredible growth in the federal government and its spending demonstrates Parkinson’s thesis that bureaucracies and agencies will proliferate even if they no longer have a reason to exist.
Let me know if you have identified other management “principles” or have examples of Peter and Parkinson Law to share. We would like to add your examples to our collection!