Why Bureaucracies Form and How to Slow Their Decline

Bureaucracy is not an accident; it explodes once an organization passes the roughly 150-person threshold where personal context fades. At that point, people add formal proposals, approval chains, and documentation to compensate for lost visibility, creating self-reinforcing processes that slow decision making. This core dynamic is driven by human limits on relationships, loss aversion, and the need for promotion legibility.

The article enumerates the mechanisms that seed bureaucracy: Dunbar's number forces a switch from direct conversation to paperwork; upside-downside asymmetry makes teams over-react to potential losses; inclusivity impulses inflate meeting size; blame-avoidance pushes decisions into immutable processes; team-oriented ownership adds coordination overhead; promotion legibility spawns checklist cultures; and selection effects attract people who thrive in bureaucratic environments.

To slow the inevitable slide, the author suggests practical tactics: keep headcount below the critical threshold or split large firms into semi-autonomous units; fire aggressively to remove middle-manager layers; assign a single owner to every artifact so responsibility is clear; and replace rigid promotion checklists with executive intuition that rewards genuine business value over arbitrary metrics. These steps directly attack the incentives that generate excess process.

A concrete illustration comes from a Tesla internal memo where employees are urged to bypass the chain of command and email anyone who can solve a problem fastest. The memo highlights how eliminating hierarchical bottlenecks restores speed and prevents the sclerosis seen in larger firms.

Technical leaders can use these insights to diagnose why their orgs are bogged down, choose the right combination of size control, ownership clarity, and promotion philosophy, and deliberately shape a culture that values agility over paperwork.