Bureaucracy as a service

Market forces for the bureaucracy

Bureaucracy relies on rules and procedures, many of which have a life of their own, regardless of the value they have for the end users of the organization’s products and services. When such procedures become overly complex, the only way to break them is to price them – create an internal market system that allows users to decide for themselves whether to use the services they offer want to take.

Enjoyment of work instead of a depersonalized system

Bureaucracy is a depersonalized system – work is done by roles, not people. When this organizational approach is put into practice, the workplace becomes sterile and daunting, and people tend to do what is asked of them and nothing more. In such situations, the way forward is to emphasize community: to highlight the opportunities and the joy of working in a socially vibrant environment.

What are the two biggest problems with bureaucracy (Birkinshaw)

Guard rails, governance and self-determination

‘Guard rails’ of possible action are the systemic, organizational boundary conditions within which autonomy and personal responsibility can be developed: ideally, clear delimitations of which actions are appropriate and which are to be negotiated bilaterally in individual cases.

Just as there is nothing bad about hierarchy and lines, so little about guard rails. Knowing the scope of action helps to recognize in self-organization and turbulence where rather undefined zones emerge and negotiation is indicated.

As a term in English, the ‘guard rails’ are circumscribed as governance : rules that define what is possible and what is not under any circumstances. The gray areas of discretionary decisions in fuzzy situations are the areas in which management can take action and make decisions even when there is uncertainty.

Helpful governance also gives indications of what happens when actions or experiments fail and do not produce the expected effect: what learning, what consequences then happen?


MVB - minimum viable bureaucracy

Culture between Chaos and Bureaucracy

Stefan Knecht based on an idea by Henrik Kniberg: culture, corporate culture, stands between chaos and bureaucracy. On top of that there is a small, agile person.

Organize bureaucracy as a service

The big question: which of the rules should be codified as part of the operating system – and which are part of the internal market mechanisms?

One of the hairy problems is the accumulated power of the bureaucracy. Market-like mechanisms are an antidote to complex and slow internal processes. Community-based mechanisms build a bridge to interesting and motivating work environments.


The prime example of bureaucracy as a service is the Chinese appliances company Haier, which has organized everything around a network of micro-enterprises.

Zappos was a famous proponent of Happiness at work and then Holacracy, but now the company has started implementing internal market-like contracts between its operating units.