Each month, "Management Matters" addresses management and leadership issues essential to achieving exceptional business results while growing and developing people. Please enjoy "Management Matters", and pass it on!

All Content © LeaderPoint

Asking PIXAR: Does Bureaucracy Kill Creativity?

Many people claim that bureaucracy destroys creativity, and that successful firms eliminate or minimize bureaucracy to enable their “creatives” to perform well. But bureaucracy is actually NOT inherently bad, even though it is commonly perceived that way. The word “bureaucracy” derives from creating separate bureaus, or offices, for different areas of focus — and there can be both positive AND negative effects on getting work done.

Consider these Federal Bureaus, for example — and the havoc that would ensue if their work wasn’t distinctly separated:

  • Federal Bureau of Investigation (FBI)
  • Bureau of Engraving and Printing
  • Bureau of Indian Affairs
  • Bureau of Ocean Energy Management
  • Bureau of Alcohol, Tobacco, Firearms and Explosives
  • Bureau of Budget and Planning
Creating structural separation enables people to focus on isolated areas, and become expert in those specific areas. Unfortunately, establishing this kind of structural separation can sometimes make it difficult for people to work together across those divisions, because they spend so much time seeking disparate ends. This difficulty is what people typically refer to when they talk about bureaucracy.

The good news is that there are some great tools managers can use to understand and alleviate the barriers created by structural separation.

Designing new cars, creating video games, and making motion pictures are all business activities that require high levels of creativity. Yet companies in creative fields are as vulnerable to the negative effects of bureaucracy as any other company. Just ask Ed Catmull at Pixar,1 one of the most successful motion picture companies in the world.

Pixar, like most companies, is constantly seeking to formalize or systemize work processes and methods that lead to greater efficiency. The success of these systems leads to a status quo that becomes comfortable and often protected — sometimes even unmovable: bureaucracy. This can inhibit the necessary innovation that enables people to work creatively and adapt over time.

These “bureaucratic” systems, however, can serve a very important purpose. Creativity unchecked can be costly. For example, Catmull talks about the film Monsters, Inc. where Pixar executives vowed to avoid the stress created by arbitrary deadlines. It ended up taking the studio five years to complete the film — not a cost-effective timeline. The favoritism afforded the creative process ultimately became bureaucratic in itself. At some point, creative tinkering must be halted in order to make the movie profitable.

This inevitable desire to optimize one functional area at the expense of others is the most common problem of bureaucracy: seeking to perfect one particular function or system, even at the expense of actual business goals. Observes Catmull, “Making the process better, easier and cheaper is an important aspiration, something we continually work on—but it is not the goal. Making something great (a great film or a great game) is the goal.”

Though many workers complain about and often despise bureaucracy, it might surprise them to know they are often the source of it. Catmull describes the precise nature of bureaucracy: “Any group that produces a product or drives revenue could be considered to be part of the [bureaucratic force], including marketing and distribution. Each group operates according to its own logic, and many have neither the responsibility for the quality of what is produced nor a good understanding of their own impact on that quality. It simply isn’t their problem; keeping the process going and the money flowing is. Each group has its own goals and expectations, and acts according to its own appetites.” Again, this is a normal result of structure and its intended function to focus people on separate parts of the whole.

Here’s an example: Pixar’s animation business has several departments, or constituencies: story, art, budget, technology, finance, production, marketing, and consumer products. The constituencies often have conflicting goals or priorities. The table below shows these priorities and the impact when some priorities take precedence over the others.

Each function has its own needs, and is under pressure to achieve stated goals. And according to Catmull, “In an unhealthy culture, each group believes that if their objectives trump the goals of the other groups, the company will be better off.”

Pixar, like any successful company, finds ways to mitigate the undermining effects of bureaucracy so it does not compromise its business goals. The functional grid above is not unique to Pixar; similar conflicting interests can be observed in almost all companies. But healthy cultures where cooperation is encouraged can counteract the negative effects of bureaucracy while still maintaining the needed discipline that structure provides.

Managers can actively mitigate the creep of bureaucracy in several ways. First, managers can restructure. This might be to decentralize so that some authority is moved away from functional leads. It could be to reexamine accountabilities to make them aligned with better metrics that help the unit or project meet its intended outcomes. Or it could be moving decisions where they can be made to better contribute to actual business goals rather than serving a specific function.

Second, managers can use organization — the complementary tool to structure. People from different functions must communicate and cooperate, and they are most likely to do this constructively when they share a common purpose. In a company like Pixar, you might imagine the director bringing together people from different functions to focus on larger, non-functional challenges.

Finally, managers can institute processes that will lead to better overall outcomes, regularly enforcing the communication and cooperation needed to achieve them. The “Thursday Meetings” practiced by general managers like Arthur Elliot Carlisle’s MacGregor and Alan Mulally at Ford are examples of this. At Pixar, Catmull established specific processes — such as the “Braintrust” — where ideas could be vetted critically but not coercively. Often these processes encourage cooperation, communication and peer learning — especially when injected with a focus on some greater purpose.

So does bureaucracy kill creativity? Not at Pixar. Solutions in all businesses require creativity, and often these require sustained cooperation across functions — where the focus is on the whole, not just a sub-group function. The best way to gain this ongoing cooperation is to establish a clear common purpose — one activity at a time — where people think beyond their functional perspectives.

Structure does serve an important purpose: it enables people to specialize. Unfortunately, when people’s attempts to optimize functional work supersede the greater goals, bureaucratic barriers emerge. People may lose sight of the larger business purposes.

When this happens, effective managers revisit how the work is structured to ensure it supports the desired business outcomes, and they engage people in process activities that encourage greater cooperation with common purpose. Now that's creative.

1Creativity, Inc., by Ed Catmull and Amy Wallace, 2014, Random House.

For more information about LeaderPoint, and to access our Reading Room of management articles, visit www.leaderpoint.biz, or call 913-384-3212.