How Bureaucracy Shapes Our Thinking

Photo by Wesley Tingey on Unsplash

You probably don’t like the word bureaucracy. If you work in a small private sector company and have ever considered a switch to the public sector, one of the key factors you likely weighed was the level of bureaucracy. I don’t blame you; I’ve spent years working on innovation inside bureaucracies, and there are plenty of moments when I wonder why I still do.

Back in 2017, Harvard Business Review published an eye-opening statistic: excess management was costing the United States $3 trillion per year, and across the OECD countries, that number jumps to nearly $9 trillion. It’s hard not to get mad about these numbers and immediately conclude that bureaucracies are simply inefficient. Most of what I’ve come across on this subject only reinforces this perception:

Bureaucracy = Bad

My ego used to feel pretty validated in its fight against the inefficiencies of bureaucracy. But I started to ask myself: if bureaucracy is so universally disliked, why do we keep relying on it? Is there something deeper—maybe even psychological—that pulls us towards these structures, despite their flaws?

I turned to some classic thinkers to help unpack this question. As innovation practitioners, we often focus on modern research, but revisiting the foundations can be useful.

1. Bureaucratic Behavior is a Thing

To understand bureaucratic behavior, we need to look at a few key figures. First, Max Weber, writing back in 1920. Weber defined bureaucracy as an ideal structure, with clear hierarchies, rule-bound processes, and merit-based decisions. He believed it was the most efficient way to run an organization, though he did acknowledge that all these rules could make the system rigid.

Then, Herbert Simon in 1947 and Anthony Downs in 1967 expanded on Weber’s ideas. Simon explored decision-making in bureaucracies, noting that people don’t always strive for the best possible outcome—they often “satisfice,” meaning they make a decision that’s good enough given the complexity of processes involved. Optimizing every decision is just too hard when you’re navigating such a layered system.

Downs, took this further by pointing out that people in bureaucracies often act in their own self-interest—seeking to maximize power, status, or budget, rather than focusing on broader organizational goals.

So, what happens to Weber’s efficient structure? It often turns into a rigid, self-serving machine. People act based on limited information, and they tend to prioritize their own interests. This is partly because bureaucratic organizations aren’t driven by the same market forces as private companies. They’re meant to address social goals, which are hard to measure and even harder to tie to individual performance.

2. Can We Give Better Incentives to Combat This Behavior?

The good news is, there are ideas for how we can give bureaucrats the right tools and incentives to make better decisions that benefit everyone.

One approach is to increase accountability to stakeholders, but this can backfire by creating even more layers of bureaucracy.

I tend to favor a more experimental approach, using behavioral nudges to encourage better decision-making. People in bureaucracies often know what’s not working, but we’re quick to blame others without recognizing our own role in the problem. Small experiments can help shift behavior without adding more bureaucracy.

For example, something as simple as encouraging employees to write a sticky note once a month with an appreciation message to a colleague can create a subtle cultural shift. You can run this experiment for a few months and see how it impacts collaboration and morale.

Another way to nudge people out of bureaucratic habits is by prioritizing learning and knowledge sharing. In my experience, when we organize knowledge-sharing sessions, a surprising number of colleagues show up. They want to know what others are working on and how they’re solving problems. This not only helps people make better decisions later but also fosters a sense of connection—reminding us that, despite the bureaucratic processes we’ve become accustomed to, we’re all here for the same mission.

We may act in bureaucratic ways out of habit, but deep down, many of us still care about making meaningful contributions. With the right nudges, we can start to break out of the mold.