'They're going to be left weaker rather than stronger,' says academic on Amazon's broad-strokes approach, citing importance of bureaucracy's efficiency and control
Amazon CEO Andy Jassy caused a stir last week when he announced in a public memo that all employees would be expected back in the office five days per week starting January 2025.
However, those who keep eyes on employment trends are also questioning the logic of another part of that memo which pointed directly at an excess of managers as a cause of excess bureaucracy.
“As we have grown our teams as quickly and substantially… the last many years, we have understandably added a lot of managers. In that process, we have also added more layers than we had before. It’s created artifacts that we’d like to change,” Jassy stated, going on to explain how, in his view, this has resulted in bottlenecks in productivity.
“Pre-meetings for the pre-meetings for the decision meetings, a longer line of managers feeling like they need to review a topic before it moves forward, owners of initiatives feeling less like they should make recommendations because the decision will be made elsewhere,” Jassy wrote.
“Most decisions we make are two-way doors and, as such, we want more of our teammates feeling like they can move fast without unnecessary processes, meetings, mechanisms, and layers that create overhead and waste valuable time.”
Amazon to reduce managers, reduce bureaucracy
Jassy then stated the goal of increasing the ratio of “individual contributors to managers” by 15 per cent at the minimum, by Q1 2025; a move which Karen MacMillan, assistant professor of organizational behaviour at the Ivey Business School at Western University, calls a “bias towards action,” strategies that are usually designed to please boards of directors or other stakeholders.
“What we see with organizations, especially a tech organization like that, when they start, they're very agile, because they need to be to be… but every organization, including tech organizations, get more bureaucratic as they get bigger,” she says, explaining that rules are designed to standardize operations, ensuring fairness and consistency, and HR professionals rely on bureaucratic systems to ensure that policies are followed correctly, compliance is maintained, and employees are treated equitably.
“The problem is, when we have that bureaucracy and all those rules, now that's constraining people. So, this is where we get the memo, where Amazon's looking around and going, ‘Dang, it's so big and it's so unwieldy that we need to get back to our roots and have fewer managers.’”
Is bureaucracy harmful to organizations?
However, such broad-strokes strategies are not usually effective, MacMillan says, and are often short-sighted.
“We know from the research that that rarely works. Cutting people, having big layoffs, whether it's managers or not – it helps the bottom line in the short term, but those people usually end up getting brought back over time because they were there for a reason: they're needed,” she says.
“[Jassy has] has no idea which one of those [managers] are critical, so he's just kind of like… got a broken toe, so he cuts off his foot.”
While known for killing innovation and creative freedom, bureaucracy is a necessary part of an organization’s growth, MacMillan explains. However, the place of bureaucracy is shifting as knowledge work increases, creating adaptive challenges for organizations.
“Nobody likes red tape. But since the start of the industrial revolution, we have used bureaucracy as a system to increase efficiency and control, and it does, it works,” she says.
While bureaucracy ensures order, it can also hinder an organization’s agility. Complex hierarchies, lengthy approval processes, and rigid policies can slow down decision-making and innovation – a problem Amazon’s CEO emphasized.
“I think that's what the problem is, is that Amazon is just so big and it's gotten so unwieldy, they're just trying to figure out something to do to make this better,” MacMillan says.
“If I assume they're good at choosing who to promote or hire, they're getting rid of some of their stronger people when they take this big contingent of managers. I think they're going to be left weaker rather than stronger.”
How to spot bureaucracy, and what HR can do about it
To find out if there is excessive bureaucracy in an organization, MacMillan advises taking a systems-wide approach, including canvassing employees and tracking efficiency, innovation and adaptation.
“It pays to look at the whole system and look for ways that the system isn't working well, according to the company's goals. If the goal is to be innovative, an organization would have to look closely at what is stifling creativity,” she says.
“Each change to the system, however, would impact other parts of the system, so it is often good to make an adjustment and then gather data on what has changed. It can be difficult to know exactly what lever to push, and research shows that leaders often choose to move the exact wrong lever when they are going by gut feel.”
An emerging problem with the advent of knowledge-based work is that more educated employees need less bureaucracy, since they have professional standards to adhere to, MacMillan says.
There should be a higher focus on giving more, not less, decision-making power to employees, through self-managed teams. Although Jassy said fewer “layers” of decision-making will lead to more agile innovation at Amazon, he contradicts himself with the call back to the office for five days per week, she says.
“The fact that he said, ‘We're just changing the ratio [of employee to manager]’ tells me this is just an off-the-top-of-the-head kind of decision, rather than one that comes from actually looking closely at what people are saying and what where the problems actually lie,” she says.
“I can't believe that every manager needs 15 per cent more employees reporting to them. It's just too much blanket of a statement.”
