When organizations are small, process tends to be an afterthought. This might create inefficiencies and some risk, but it also enables speed, experimentation and adaptability - all critical to innovation.

However, as an organization gets larger, there is not only more to lose but a lot more people to lose it, and so process and policy is introduced to help it deliver on an existing, repeatable business model and safeguard the organization against wrongdoing.

This ultimately creates a culture of outsourcing accountability and consensus seeking.

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Type 1 v Type 2 Decisions

Jeff Bezos eluded to this phenomena in his famous 1997 Amazon shareholder letter, where he delineated between Type 1 and Type 2 decisions.

Type 1 decisions are high stakes, costly, irreversible, and require careful consideration. Think decisions about security protocols that protect the privacy of your customer data and mitigate the chances of a seven-figure privacy breach coming your way.

Type 2 decisions are reversible. If you screw up, you can make amends without too much, if any, harm having been caused — think the font used in a landing page you’re building to test appetite for a new product.

The reality is that most decisions are Type 2 decisions, and should be made quickly as a result.

But at most organizations, almost all decisions are treated as Type 1 decisions - even something as reversible as the colour of a button. 

Bezos warns in one of his Amazon shareholder letters:

“As organizations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making process on most decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention.”

The end result is a slow-moving bureaucracy that appears to exist solely for the purpose of hosting meetings.