Jesse Jacoby
Before launching any change effort, find out what’s functioning and what’s functioning around a problem. The difference is where your real ROI lives.
Every organization has a department that should be half its size.
You can usually spot it during a transformation kickoff. The team in question has more headcount than seems necessary, more processes than anyone can map, and a leader who can describe in granular detail why every single one of those processes exists. They are not wrong. Each step was added for a reason. Each workaround solved a real problem at the time.
The trouble is the original problem is usually gone, or could be fixed at the source, but the workaround has hardened into the operating model. And the people running the workaround have built their careers around it.
This is normalized dysfunction. It is the hidden tax on every transformation, and most leaders are paying it without knowing the line item.
How it forms
Normalized dysfunction almost never starts as dysfunction. It starts as competence.
Something breaks upstream. Maybe a system migration leaves data quality patchy. Maybe a policy change creates exceptions no one anticipated. Maybe a vendor relationship goes sideways. A capable manager steps in, builds a workaround, and keeps the business running. That is what good operators do.
The problem is what happens next. The workaround gets a name. It gets headcount. It gets a quarterly metric. The upstream issue, meanwhile, never quite makes it to the top of anyone’s priority list, because the symptoms are no longer showing up. The workaround is doing its job.
Five years later, you have a function whose entire purpose is to compensate for something that could have been fixed at the source for a fraction of the cost.
Why it sticks
If normalized dysfunction were only an operations problem, it would be easy to solve. It is not. It is a political problem wearing operations clothing.
Three forces keep it in place.
The first is identity. The leaders running the workaround have built their professional reputation on solving the problem. Asking them to dismantle it is asking them to dismantle their own value proposition. Even when they intellectually agree, the emotional pull goes the other way.
The second is the power-by-headcount equation. In most organizations, the size of your team is still a proxy for your influence. A leader with forty people in their function carries more weight in the room than a leader with twelve, even when the twelve-person team is doing higher-leverage work. This creates a quiet incentive to grow complexity rather than reduce it.
The third is institutional memory loss. The people who built the workaround usually understood why it was needed. The people running it five years later often do not. They have inherited the work, normalized it, and now defend it as if it were always supposed to exist.
The audit that finds the money
Before launching any transformation, run a simple diagnostic. Take each major function or workstream in scope and answer one question for each: is this functioning, or is this functioning around a problem?
Functioning means the activity creates direct value. The work exists because the work itself matters.
Functioning around a problem means the activity exists to compensate for a failure somewhere else in the system. The work is real, the people are capable, but the entire reason the function is staffed at its current size is because something upstream is broken.
The difference between those two categories is where your real ROI lives.
Most transformation business cases are built on optimizing the functioning parts. That is the easy work. The harder, and far more valuable, work is naming what is functioning around a problem and asking whether the upstream issue can be fixed instead. Fix the source, and the workaround becomes optional. Optional workarounds shrink. Shrinking workarounds free up headcount, budget, and leadership attention for work that actually moves the business forward.
This is not a cost-cutting exercise. It is a clarity exercise. Done well, it surfaces the difference between what your organization does and what your organization does to cope with itself.
What leaders need to be willing to do
Running the audit is the easy part. The hard part is what comes after.
Leaders have to be willing to ask their most loyal lieutenants whether the function they have built is still solving the right problem. They have to be willing to redeploy capable people into work that creates more value, which often means asking those people to give up scope they fought to build. They have to be willing to absorb the short-term political cost of telling a director that the source of their power is also the source of the company’s drag.
That is the part most transformations skip. It is also the part where the real money is.
If you are about to launch a major change effort, do this before the kickoff. Walk through the org and label every function honestly. Functioning, or functioning around a problem. The first category is where you operate. The second category is where your transformation actually lives.
