Here's The Trouble With Bureaucracies

Friday, June 25, 2010

The primary objective of all bureaucracies is to get bigger. They may not succeed, but at their cores, ahead of profitability, ahead of service, is the paramount desire to accumulate personnel and/or power.

In our world, there are two -principal kinds of bureaucracies: -government and corporations. Governments get bigger by expanding their reach into the functions of society and adding employees, in the greatest possible numbers, to manage those functions.

Corporations get bigger by expanding or controlling markets in order to make more money, which eventually requires hiring more employees. In a nutshell, governments get bigger by spending money, corporations by making it.

In either case, information moving up the chain of command and orders coming down can take a very long time, and be distorted at every level by conflicting opinions, incompetent individuals, missed communications, plain old mistakes, and on and on. Bureaucrats keep their heads down; inaction is the safest course. Bureaucracies sacrifice efficiency for stability. At some point, it seems, they lose both.

How can it possibly come as a surprise, then, that the world's fourth-largest corporation, British Petroleum, and one of its largest governments, ours, can make a collective hash out of dealing with the disaster in the Gulf of Mexico?

How much oil is there? A thousand barrels a day? Fifty thousand? Does the Jones Act prohibit help from other countries? Who would know? Who can fix it? Why can't Kevin Costner get his centrifuges into action when James Cameron was consulted early on? Is it some Hollywood catfight?

Nobody wants the Gulf smothered in oil for decades. None of this is malicious; it is merely incompetent.

It is the same kind of bureaucratic incompetence that took General Motors beyond the brink of bankruptcy, or creates countless overruns in military budgets, or keeps dead people on Social Security rolls. It is of a piece. It is the result of large cultures that reward routine and penalize diligence or originality.

This is nothing new. As Harry Truman left office, he remarked, "Poor Ike. He'll say, 'Do this,' or 'Do that,' and nothing will happen." President Obama hasn't figured this out, but even if he had, he wouldn't know what to do. He has no management experience.

BP seems to think that public relations will make the oil go away, and even then, its CEO goes to yacht races in Britain.

The proper approach is painfully obvious: You need somebody on the ground with immediate, on-the-spot authority. Admiral Thad Allen is, by all accounts, very competent, but his decisions have to float upward through the Energy Department and the EPA and the Pentagon and the executive branch, and who knows where else.

Somebody does a study, or holds a meeting, or writes a memo, and three weeks later, when an approval comes down, the oil has moved and expanded and some other action is needed. This is exactly what happened when Katrina hit New Orleans.

When BP CEO Tony Hayward testified before a congressional witch hunt, he claimed basically to know nothing about how the leak occurred or how it was being repaired. The sad thing is that he was probably telling the truth.

Large organizations are not effective at handling emergencies; it is all they can do to muddle forward with their daily routines. Someday the oil will stop, either because someone eventually is successful at capping the well, or because it simply runs out of pressure. How much better it would be to attack it from the front lines.

Fred Wolferman lives in Southern Pines. Contact him by e-mail at fwolferman@sbcglobal.net.

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Weedhopper 1 year, 7 months ago

It was BP's responsibility to drill safely and to have systems in place to handle emergencies. They utterly failed on all counts. They ignored test results that indicated serious problems and have acted in a way to salvage their profits at the cost of American taxpayers.

The failure of MMS and other agencies to effectively prevent these catastrophes lies with those who use their political clout to render them ineffective.

coffecreme 1 year, 7 months ago

and your solution is what Fred?

nothingspecial 1 year, 7 months ago

My solution would let businesses fail when they stop being able to support themselves (due often to their own inefficiencies and bureaucracy as Fred suggests) and resist government growth.

In the case of the oil leak, the U.S. government has been just as Fred says. They obviously weren't "on it from day one". It's time for them to get on it. We depend on them, not BP. Quit playing Angels and A-holes and get on it.

JER 1 year, 7 months ago

Fred says the President doesn't know what to do because he has no management experience. BP is run by people with management experience, all the Wall Street firms that helped put us in our current state of affairs were run by people with management experience, Bernie Madoff had management experience and so did the guys doing prison time that ran Enron. So your point is what, Fred? I believe that government keeps getting bigger because of a need to protect the public from the unscrupulous businesses that continuously endangers all of us with their reckless quest for profit. When corporations get bigger, they do create jobs but most are not on US soil. The only goal of a corporation is to produce a return on investment to their shareholders and could care less if any jobs created put our citizens to work. The jobs go to those willing to work for the least pay. There is nothing patriotic about big business. They are concerned only about their own wealth and security. If we want better government, we all (including big business) need to be better citizens.

nothingspecial 1 year, 7 months ago

Our free market is an incredible engine that has a history of making more Americans comfortable than any other place on Earth. Folks can say we need regulations to keep it from going crazy but we screwed ourselves this past go-around through some regulations that were stupid. The regulations we put on banks to give more people homes, whether they could afford them or not was stupid. The free market found a way to try to make money from that lunacy. That's what the free market does, but it has to be allowed to do things fairly, where there are winners and losers. The government often doesn't think that way. They have a tyranny of the heart where they can't stand to see anyone cry or be uncomfortable, so they want to throw money at them. New immigrants who come to this country often come because they see amazing freedom and opportunity. Most of them don't want a hand out - they have enough just being here and being able to do their best. The government usually screws things up when they think they want to help.