The link between Organisational Structure and Risk Averse Thinking

Why is it that the bigger the organisation, the more bureaucratic and risk averse it tends to become?

It has to do with traditional hierarchical/management principles of splitting accountability away from the person who is responsible for the delivery of the outcome. In traditional organisational structures, managers are accountable for the actions and behaviours of the workforce which works for them. This leads to management, with support from HR, putting in place 'safeguards' to protect their own back, as - in a Blame Culture - holding accountability can lead to being scapegoated for inefficiencies further down the line.

As the organisation grows, the gap between accountability and responsibility becomes wider with more management layers where the person at the top becomes accountable for all the people who work within the organisation. With layers of delegated accountability, more and more safeguards, policies and procedures are produced to set behavioural expectations to protect those who hold accountability. At the front line however, the policy and procedural expectations translate into total paralysis as staff are overwhelmed with behavioural expectations coming from all directions and as such they fear to act, which actually leaves the person accountable even more open to risk. This often leads to a 'cycle of ever-increasing control'.

This splitting of accountability and responsibility when working with adults leads to a (often dysfunctional) parent-child relationship, or the organisational equivalent of 'carrot and stick' approaches and command-and-control management styles. It also makes performance management and disciplinary practices instigated by managers highly subjective and one-sided.

As such the size and structural design of an organisation has a significant impact on the behaviours of the people working within it.

So how can this be changed?

There are a number of solutions, which depend not only on your organisation's size and structure, but also on the culture, leadership and risk attitudes across the organisation. Here are just a few:

- make a conscious choice to commit to building trust across the layers of your organisation
- commit to changing your organisation's culture from a Blame to Learning/Innovation Culture
- delayer/flatten your organisation
- build multi-layer and multi-disciplinary collaborative innovation teams
- 'lean'ify and simplify policies and procedures, turn them into helpful guidance
- help adults to hold themselves to account through coaching and mentoring
- identify the right leadership style for your organisation
- make risk attitudes visible
- devolve control to teams/departments

Please share below your thoughts, case examples or other possible solutions to reducing bureaucracy and risk aversion in organisations.