Why Telcos are Dinosaurs, and Must Be

Bureaucracy has few fans. “Bureaucracy saps initiative, inhibits risk taking, and crushes creativity. It’s a tax on human achievement,” say Gary Hamel and Michele Zanini of the Management Lab. 

But it might also be the “necessary outcome of complex businesses operating in complex international and regulatory environments.” 

There are other ways to spin it. Bureaucracy might be defined as a form of organization defined by complexity, division of labor, permanence, professional management, hierarchical coordination and control, strict chain of command, and legal authority.

It is rules based, with formal leadership based on roles. And yes, it is hierarchical. In practice, it can stifle innovation and initiative. 

But is it a necessary evil? Some would say so. Would you prefer a large organization run only informally, without bureaucracy? Do you believe any truly large organization can be run collegially? 

Sure, impersonal rules are an issue. Any rule can hinder rather than help, at least occasionally. Rules introduce inflexibility. 

But would you rather work in a very-large organization where hiring, promotion and benefits are doled out based on ties of kinship, friendship, or patrimonial or charismatic authority? Would you be happier if decisions were made without regard to professional competence or scope of decision-making authority?

Rules-based governance is designed to eliminate those sorts of processes. The rules inhibit, but they also protect. They tend to enforce equal treatment and some degree of perceived fairness. Bureaucracy tends to reduce capricious and random decisions and actions. 

Beyond all that, scale requires bureaucracy, with all its rules and challenges. That is why telcos always are criticized for being slow-moving, bureaucratic and cumbersome. To provide services and create products sold at massive scale, rules and uniform processes are necessary. 

To operate at high scale, repeatable processes and systems (rules based) are required.  Which is not to say it is easy. Product catalogs, especially for enterprise services, are complex and often customized. Without “bureaucratic” organization, it would be even worse. 

It is all well and good to argue that telcos and connectivity providers, no less than other organizations, need to learn to move faster, to develop the ability to learn and change fairly fast. 

But there always will be limits. To operate at scale, repeatable processes and rules are necessary. Managing complex systems necessarily requires more effort and time to mesh all the various operations on a consistent basis. 

And that means change can be complex as well. Moving fast in one area will always run into problems as other elements of the delivery chain are affected, and must also adapt. 

The point is that, like it or not, complex systems cannot move or change as fast as simple systems. As unpleasant as bureaucracy might be, it might well be unavoidable for organizations that operate at scale with many complicated systems that must all synchronize. 

Call them dinosaurs if you like. So long as they operate at scale, with high complexity, telcos will always move slow. They have to. “Google speed” is not possible, and if tried would likely break operations and cause chaos. 

Bureaucracy and caution can be maddening. They also can be necessary. Like it or not, entied based on physical infrastructure cannot change or move as fast as any organization producing “virtual” products. 

To be sure, any large organization will necessarily be run on bureaucratic principles. Scale requires it. Communications, in addition, is an industrial process. Creating and sustaining the capability requires lots of coordination. 

Does anybody believe a factory can move and change as fast as a big software company? Yes, telcos are “dinosaurs,” big and slow-moving. Bigness and complexity compel such behavior. 

If you do not believe that, try starting a new communications company. You quickly will discover why the need for repeatable processes leads to standardization and rules-based behavior. It will be bureaucratic, and you will not like it. But the alternatives are worse.