You’ve just starting working for a company developing a small robotic weeder for residential gardens. (Think Roomba.) As a member of the prototype design team, you don’t wait for upper management decisions on the next design iteration. Protocol states you and your fellow team members self-manage those design decisions. In fact, you and your mates make all team decisions regarding purchasing, promotions, salaries, new team hires and fires, and the selection of your team leader. Sweet!
Continuing this scenario, you’ve now completed the mandated self-management learning program (on company time), and you’re excited about your sponsor, who mentors you in the company’s culture of collaboration. Today you’re shadowing your team leader who is meeting with a competitor to share knowledge about industry safety regulations. Tomorrow you’ll participate in a cross-functional exercise with the sales team. Oh, and Friday you’re excited about bringing your dog to work. Extra sweet!
BECOMING AGILE AND RESPONSIVE
This scenario isn’t a dream. It’s a next-generation business model evolving now – one which a growing number of pioneering companies are choosing in order to attract and retain good employees. Their organizational structure, known by a variety of names, such as lattice, flat, matrix or teal, has a key theme for management: “get out of the way.”
Instead of command-and-control, the innovative leaders of these innovative companies are committed to a decentralizedapproach. This allows them to empower their employees by promoting collaboration and self-management through individual responsibility and accountability. Removing fixed power hierarchies and layers of middle management, means a company can become more agile and responsive to the pace of innovation in their industry.
So who are some of these agile organizations and what does their pioneering management style look like?
Maker of Gore Tex and Glide dental floss, amongst other products, W.L. Gore has appeared in the Fortune 100 Best Companies to Work For® list 19 years in a row. The company has no org chart and no titles for their 9,000 employees. Listen to what employees say:
Other companies choosing a self-management model…
Buuertzorg – a Dutch nursing care provider with 9,000 nurses and a 60% market share, went from using multiple management layers and a call center model to small teams of self-managed nurses, who do their own recruiting, purchasing and contracting for medical or legal expertise when needed.
Morning Star – a U.S.-based tomato processing company has a 40% market share with 400, up to 2,400 employees (in season) with no titles, all utilizing self-management and conflict resolution skills taught by the company’s Self Management Institute.
FAVI: a brass foundry in France, which produces products for the automotive industry, and has about 600 employees, yet no hierarchy, no personnel department, no time clocks, cards or employee handbooks. To handle rush orders and build camaraderie, all engineers and administrators are trained to operate one assembly line machine under guidance of the machine operator.
Cisco Systems – in 2001 the company wrote off over $2B in losses and decided to restructure the company with less hierarchy, which by 2008 had resulted in 30 new markets and $26B in cash.
INTEGRATION IS REQUIRED FOR SELF-MANAGEMENT
For the traditional CEO looking to flatten the company org chart, the key question is whether they are ready to give up power to get results. Said another way, which is more beneficial to the company, the expansion of an ego or the expansion of an innovative idea?
To be sure, it’s not always a seamless transition for companies choosing a more open organizational framework. Removing upper management control is only half the battle. It takes certain values shared by the employer AND the employee. These values revolve around the integration of people and ideas, such as:
- Sharing knowledge, not stockpiling it
- Placing decision-making closest to those affected
- Encouraging peer-based relationships
- Removing politics throughout the organization
- Building free-flowing communication channels
- Promoting the Win/Win principle
According to Frederic LaLoux, author of Reinventing Organizations, these values within an autonomous work environment result in, “…enormous motivation and energy. We stop working for a boss and start working to meet our inner standards, which tend to be much higher and more demanding.”
THE PROFIT PARADOX
The paradox, as Laloux has described, is that most companies choosing non-hierarchal structures, are profitable, in some cases more than their traditionally-structured competitors. Says LaLoux:
The self-managing organizations in this research have all achieved outstanding levels of performance. These companies seem to fire on all cylinders at the same time. They provide a space in which employees thrive; they pay salaries above market rates; they grow year in and year out, and achieve remarkable profit margins; in downturns, they prove resilient even though they choose not to fire workers; and, perhaps most importantly, they are often vehicles that help a noble purpose manifest itself in the world.
The above organizations aren’t without leadership. They just have a simple philosophy: to be a leader, you have to have followers. And followers want collaborative decision-making and self-responsibility, in a self-management environment. As a result, that environment puts as much emphasis on the fulfillment of employees as the fulfillment of the company mission. That’s integration. That’s Win/Win.