Interesting article in the WSJ today called, GM Chief Labors to Get Rebuilt Carmaker into Gear which outlines some of GMs difficulties.  There is a little bit of everything:

• Functional separation of work leading to in-fighting
• Outsourcing
• Performance rewards that cause internal competition
• The bureaucracy created by those in support functions
• Economies of scale thinking

All of the above perpetuate the problems of GM.  Economy of scale thinking has long been replaced by economies of flow.  Remember the US had all the scale after WWII and lost manufacturing to a country with little or no natural resources or scale – Japan.  The scale thinking has to go, before the country does.

However, I see more of the “frozen middle” than anything.  Support functions and middle management that stagnate whole organizations.  They are people that cannot say “yes” and add costs and bureaucracy to organizations.  Like a boat anchor to ships these folks eat resources and ruin whole financial budgets.  The need to get these folks jobs that create value or enable those that create is a daunting task.  Most people in non-value adding roles see themselves as adding value and often so do the executives that put them there.

So, the frozen middle remains frozen.  Incapable of creating value and there unintentionally to thwart innovation and invent hoops for those that can create value to jump through like policies, entrapping technology, standardization, rules, etc.  The problem with the frozen middle is irony.  It is ironic that it freezes progress, but as the dysfunction grows so does the middle expand its activities.  Organizations intending to reduce costs, increase them as they add more folks to the middle ranks.

GM is not unique in this problem.  All organizations have a frozen middle, they are there to make things run smoothly.  However, counter-intuitively they make things much worse.

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Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the The 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.