Beware of Parochial Managers

This article is the first in a three-part series on the internal barriers that fear creates in organizations: parochialism, territorialism, and empire building.

Fear creates barriers in organizations. But barriers don't spring up overnight. They evolve.

As businesses grow, their operating model becomes more complex. In a small company, people often share responsibilities or wear multiple hats, but expansion inevitably requires division of responsibilities or a more narrow focus for specific departments. This means specialized job roles. Organizations need to create a human resources department, maybe along with a separate recruiting and training group. They might form a legal department to manage the exposure that comes from increasing the complexity of the business or to create contracts they now need with a wider range of suppliers and customers. They'll divide up functional responsibilities such as sales versus marketing strategies and tactics.

As organizations establish different functions, they have to hire people to lead each one. So managers are put in charge of different areas and given responsibility for their specific area's success. In effect, people are endowed with departments. That's all well and good -- and necessary. It would be wasteful for a company to reengineer itself every time a functional area's purview changed or expanded. But when growth is not handled properly, the seeds of bureaucracy are planted. And it all comes back to fear of loss.

The person in charge of a particular function will, of course, be judged primarily on how well that function performs. As business grows, other departments will inevitably have increasing demands for customization, exceptions, and quicker turnarounds on the more specialized groups. At the same time, all of these departments will begin to compete for resources, budget, IT initiatives, and headcount.

So how do the leaders of these functions survive in the face of all of those demands and not lose control? They create rules, standards, and policies to bring order to the growing chaos. Rules are, in a sense, walls that provide boundaries within which people must operate. Sometimes, though, the walls get so high that those behind them lose sight of the world outside.

When they do, they lose sight of the most important thing: the overall mission or strategy. To them, everything revolves around what's important to the department -- their ability to complete their part of the process and check off that one box, regardless of whether or not it supports the larger strategic goals. The ultimate outcome, customer-related or financial, may start to become more and more disconnected from everyday work and decision making.

Process over outcomes

As this phenomenon becomes increasingly severe, those behind the walls will be tempted to view the world not through the eyes of the customer, but strictly through the filter of their part of the process. The focus on process over outcomes becomes the norm. Those within the group start to define success as completing their part of the job, regardless of the impact on others. They start thinking in terms of "my department" not "our company." Their world becomes defined by the piece, rather than the puzzle.

Inevitably, situations will arise for which there's no set policy. What should happen is whatever is in the best interest of the company. What often does happen is whatever is in the best interest of one particular function. As one employee put it, "We've had a very metrics-driven culture to the point of dysfunction. We've blurred the lines between means to an end and the end. We have many managers who can't connect the dots, and as a result, the colleagues suffer." This is especially noticeable in companies that are under pressure.

For example, when the financial services industry was first hit by the recession, many companies in the industry went to extreme measures to control costs. The supply department of one company faced great pressure to stay within its targets. As a result, the head of the supply department declared a three-month moratorium on new orders. The employees still needed basic materials -- things like pens and printer ink -- but they weren't allowed to order more. That left branch managers with two options: If they were short on paper, for example, they could go to an office supply store and buy some for about five dollars, but they would not get reimbursed. Or they could make a request from corporate supply and get reprimanded. Neither of these options was very attractive.

Instead, a smart branch manager would call another manager somewhere else in the country and barter: three reams of paper, say, for a case of paper clips. And for several hundred dollars in shipping between branches, the company saved the five dollars that the paper cost at the store. An entire black market over supplies sprung up overnight. Nevertheless, the head of supply was recognized for keeping that department's budget under control.

When this kind of thing happens -- functional silos creating protective policies and rules, defining success by focusing on only what happens in their own little world, and losing sight of the ultimate outcome -- a company has reached the first level of bureaucracy: Parochialism. Parochialism is the base of the pyramid of bureaucracy. Each level of the pyramid builds on the one before it, creating more and more barriers with each step. This foundational level begins with redefining success based on what is best for one part of an organization -- the underlying cause of the harm that parochialism generates for others.

Wrong definition of success

With parochialism, the world is strictly contained within the walls of a particular function. Maintaining the standards of that function takes precedence over creating engaged customers and business success. Information is evaluated through a narrow filter, and decisions are made for the benefit of the silo. Those decisions may not match the company's needs; those needs may not even be considered. Business success becomes defined as simply completing the process that the function has created. Reality, customers, and the marketplace become peripheral -- if those within the parochial function notice them at all.