Das Boot
Complexity is the enemy.
CEO Andy Jassy’s 2024 Letter to Shareholders
Complexity is the enemy.
You can learn a lot about people when you ask them how they feel about bureaucracy. Builders loathe it.
‘Another way to gain speed is to eliminate bureaucracy. There is a difference between process and bureaucracy. When you're running something at scale, you need mechanisms to deliver the right experience and constant improvement for customers. However, as companies grow and add more managers, unneeded processes get layered on that add little value. Last fall, I asked teammates across the company to send me bureaucracy examples that they were experiencing. I’ve received almost 1,000 of these emails, and read every single one. Builders hate bureaucracy. It slows them down, frustrates them, and keeps them from doing what they came here to do. As leaders, we don’t always see the red tape buried deep in our organizations, but we can sure as heck eliminate it when we do. We’ve already made over 375 changes based on this feedback. We need to move fast, and we are committed to rooting out bureaucracy that ties up time and dispirits our teammates.’
The simplifier-in-chief: How top CEOs are blowing up bureaucracy to move faster
Bureaucracy costs money.
‘As organizations scale, complexity is inevitable. New products, platforms, policies, metrics, and workflows are layered on, each intended to solve a problem or drive growth. But over time, these additions compound and can create organizational drag that stifles innovation, slows decision-making, and erodes financial performance and employee engagement. According to Bain & Company, excessive complexity—defined as an overabundance of layers, processes, titles, and approvals that dilute focus and distance leadership from the customer—costs large firms more than 15% of their annual profits. For Fortune 500 firms, that can translate into billions lost. It also fuels confusion on the front lines: In a 2023 McKinsey survey, 40% of respondents cited lack of clarity as the primary cause of inefficiency in their organizations.’
Rethinking Bureaucracy: Delegation and State Capacity in the Modern Era
Fukuyama argues that US bureaucrats are themselves over-regulated, at the expense of effectiveness.
Ideally, our government would be made up of go-getters in the public service who were part of a culture focused on effectiveness in the implementation of legislative intent.
Is that stylized characterization broadly true today?
Could technology facilitate this vision?
‘However, delegation creates a dilemma: how to give bureaucrats enough freedom to use their expertise, while still keeping them accountable. Formal mechanisms like audits and punishments help, but informal tools such as trust, shared values, and education are just as crucial. Fukuyama pointed to Japan’s "kanban" manufacturing system and military strategies like "mission orders," where frontline actors are trusted to make decisions based on shared goals.
‘A major paradox Fukuyama addressed is that while anti-corruption efforts seek to limit bureaucratic discretion, political science research shows that too much constraint stifles effectiveness. He proposed an "inverse-U curve," where both too little and too much autonomy harm performance. The right balance depends on the state’s overall capacity.
‘Applying this to the U.S., Fukuyama challenged claims that bureaucrats are "out of control." Instead, he argued that America’s federal bureaucracy is over-regulated, bogged down by rigid rules that prioritize compliance over results. His work with Katherine Bersch identifies five existing tools for political control, such as appointment and removal powers, showing that bureaucratic autonomy is already tightly managed.’
Bureaucracy doesn’t deal with dynamic environments well.
‘The new CEO of Intel, Bu Tan once said that "Bureaucracy kills innovation" and he argued for slow response to the market needs (customers' satisfaction) with the bureaucratic system where he bolster a reform of start-up style response to the market needs. One of his remarkable speeches was "culture change" to recruit, retain and return the best talented staff. When we look at his reform strategy, it is obviously the fix on slow movement of the giant company to meet the customers' needs which Intel has lost some major customers namely Apple, Nvidia and faced aggressive rival AMD. Problem diagnosis in organization or the so-called "organizational auditing / diagnosis" is crucial to start as early as possible. I also argue the organizational diagnosis to happen regularly and no waiting until midterm review of the strategic plan or the end cycle of it. What I strongly agree with his statement is the bureaucracy which is not quite effective in the complex and constantly changing environment. Company must conduct the organizational diagnosis in the closer cycle than before and reduce bureaucratic process to accelerate the innovation. The company achieves nothing from staff's innovation in the hierarchical and bureaucratic process and system.’