Oversized

Imagine an office (urząd) without petitioners (petenci). Imagine a school without pupils. Imagine a hospital without inpatients, or a health centre without the ill. A mind-boggling absurdity? From the times I was a student, I recall a conversation between two student office (dziekanat) workers both claiming their job would have been much nicer, if only they had not need to deal with students (ta nasza praca byłaby całkiem fajna, gdyby nie ci studenci). So much nicer would be a job of a clerk if only those obtrusive people did not come around. A work in a hospital would be much more rewarding, if personnel did not have to take care of those horrible patients. A work in school would be marvellous, if only teachers did not have to deliver classes to rowdy brats.

Smacks of absurdity? Not really. Each organisation, as it grows, goes through certain stages of development. With each consecutive one its structures are bigger, so they require more control, reporting, paperwork, etc. With time a profit-oriented organisation, i.e. a business no longer allocates all its resources towards attaining its core goal which should be making money. With time each company builds ancillary structures, which at first enhance specialisation and support front-line units, so that everyone can focus on doing their bit. As more time goes by, in order to keep the business together, companies set up more reporting / oversight / control functions. As the process carries on, fewer employees are focused on serving customers (i.e. looking after sources of revenues) and more employees are focused on dealing with internal affairs of an organisation. When the company is bigger, internal oversight structure are vital for keeping it going in line with a certain strategy, yet the question of proportions between so called front-office, middle-office and back-office is justified. The more of a company’s resources are directed towards back-office functions and the less towards front-office, the more mature the company is. But is it more efficient?

The term diseconomies of scale has not been coined without a reason. In an organisation’s development there is a point at which the organisation grows to unmanageable proportions, i.e. is too big to be run efficiently. This happens both in the government sector (which is more prone to such distortions) as well as in private sector, yet there probability of diseconomies of scale is strongly positively correlated with size. Overgrown bureaucratic structures no longer need customers to be have something to deal with. At the highest stage of this “internal focus” middle- and back-office staff can not see the forest through the trees. They no longer realise serving the customer who feeds them should be a top priority. The become so pre-occupied with processes, procedures, reporting and other self-oriented stuff that they forget those are the customers thanks to who they can earn a livelihood.

Oddly enough, such self-oriented organisations survive, albeit rarely thrive on the market. When an organisation reaches the highest stage of development (when it does not need customers to move on) it already has established a leading market position (often might be a monopolist) and superior reputation and switching costs for customers are high. These factors allow such company not to strive for many new clients and put little effort in retaining the existing ones. Moreover, front-office functions are never neglected. Employees who bring the company the bacon are property remunerated for securing revenues essential to cover costs of the bureaucratic structures. The inertia in such huge organisations can last years and such wicked corporations do not fall apart. Senior executives often realise what is wrong and launch initiatives aimed at reinstating customer focus in organisations they run. The frequent upshot is that an organisation focuses on pursuing the programme rather than on customers…

Some time ago I took part in a series of workshops aimed at streamlining and leaning process in my company. As the workshops developed and participants came up with new ideas, the picture which emerged showed clearly the customer is actually necessary to feed us with documents we could hand over from one to another, fill in to several systems, create reports, etc. The role of a customer is boiled down to a creature which sets the bureaucratic machine in motion. Once it gains momentum, it busy with document circulations, internal analyses and reports so that the customer drops to the bottom of its list of priorities. One day when the group of workshop participants was in top form and devised plenty of ideas how to improve workings of our company, I held back for a moment, examined what had been put forward and without second thought asked an inconvenient question “but where’s the room for customers in what we design?”. I poured cold water on my fellows, the silence came into the room. They all stared at me. I realised I could have overstepped boundaries, as dissenters are not flattered in corporate capitalism. To my surprise, no one denounced me, my remark turned out to be quite productive and changed the course of works during the next workshops.

After over three years of working in the same place, I am growing weary of my current job. Or to be precise, I have had enough of my employer and how my company is run. I do take pleasure in what I do and perform my duties zealously, so the symptoms do not signify burn-out, but I am frustrated with prospects my employer and I have, or rather do not have. My employer is a part of a huge corporation with operations in most countries in the world. My diagnosis of the problem they have with their Polish recalcitrant subsidiary is that the operating environment here differs from those in other CEE countries. The corporation refuses to compromise and adjust its doing-business guidelines to specifics of the Polish market. They fail to recognise the simple rule “shape up or ship out”. They neither shape up, as consistently they fail to discern the Polish market is not malleable and will not alter to meet their expectations, nor have the courage to divest of the defiant business which totally does not fit the rest of the corporation. Customers are lost, profits are shrinking and prospects of turnaround are miniscule, because the organisation is so big that the decisions as effect of which the company could get up from its knees would have to be taken by decision makers who could not point Poland at the map, not to mention basic understanding of peculiarities of the Polish market. Thus my job is dead-end, but owing to inertia of overgrown corporations I will hold it down for a while. In the meantime I keep looking for a better one, mindful of the risk of falling out of a frying pan into the fire. As long as I am not redundant, the pressure is limited. And if they decide to fire me, there is golden parachute waiting for me by the end of this year. If it accompanies the lay-off, putting me out of misery looks like an appealing option.