“Can I play Fortnite?”. This is how my son usually greets me upon his return from school each day. After a day of sitting and listening to his teachers droning on, his main desire is to go online, meet up with his friends and kill a few people (virtually, of course).
He’s so keen on this game that, given the chance, he would play it for hours on end. But my wife and I don’t let him, not usually. We set daily time limits and require him to do his homework and chores before he plays. We help him manage his time.
He finds this frustrating, and demands the freedom to set his own limits. He thinks he is ready to self-manage. We disagree. We know a time will come when we will have to let that happen but we think, aged 12, he is not ready yet. So for now, our rules apply.
Many employees, weighed down by the constraints of top-down management structures, no doubt feel the same frustration as my son. If only their managers would trust them, they grumble, they could do their job so much better.
Up until few years ago, such people had precious few alternatives. Since all organisations of any size, with few exceptions, had such structures, they would either have to accept the constraints or leave and risk the uncertainties of self-employment. Recently, however, a third way has appeared. It is called organisational self-management.
The concept of a self-managing organisation is not so new. Writers including Peter Senge, Peter Block, Margaret Wheatley and others in the 1980s and 1990s were describing more fluid and empowering ways of organising. Yet, although these visionaries ideas were widely read, precious few companies dared to adopt them.
Since then, however, the world has moved on. In particular, new technology has emerged, enabling peer-to-peer communications and reducing the need for managers to act as a channel for information up and down the hierarchy. At the same time, there has been increasing dis-illusionment with traditional ways of working.
In 2014 came the publication of Frederic Laloux’s landmark book “Reinventing Organizations”. It presented a beautiful vision of “Teal” organisations, made up of highly networked, self-organising teams, adapting and responding to the needs of their customers, with minimal bureaucracy and hierarchy. Laloux’s book provided a framework and a language that allowed the idea of more liberating and dynamic organisations to spread. His self-published book has become a phenomenon, selling more than 400,000 copies and being translated into over 20 languages. More and more people are looking to bring this approach to their organisations.
Having studied and played with these ideas for many years, and having co-founded a business designed from the outset to be a “next stage organisation”, I would like to offer some cautionary advice for anyone thinking about embarking on such a journey.
Are you sure?
The first question to ask yourself is “Am I sure I want to adopt self-management?” If your starting point is a traditional rigid hierarchy based on command and control, then you are taking on a huge challenge. The literature on the subject generally doesn’t talk about this. The authors are, mostly, selling a vision and so they paint a glowing picture that the reader can immediately embrace. They make self-management sound new, exciting, sexy!
The reality is that shifting an organisation to self-management is a messy, unpredictable matter that can push you to the edge of your capacity. Letting loose self-management in a traditional organisation is a bit like inviting two teenagers to come and live with you. It can be an amazing and life-enhancing experience but it is not for the faint-hearted. And it certainly not one that you can “manage” in any sort of conventional way.
Take some small steps first
Rather than commit to self-management straight away, you might set your sights a bit lower. There is no shame in that. There are many practices you might adopt that can lead to positive changes in important things like staff engagement and motivation. This will help clarify if self-management is right for your organisation, and will provide valuable learnings in how to implement it effectively.
In recent years, lots of methods and practices have become readily available that can help organisations work in more dynamic and human ways. You could start, say, by introducing new ways of running meetings. The book “Liberating Structures” (Lipmanowicz and McCandless), supported by a website and an app, is full of examples of different ways of running meetings so people feel heard and meetings are more effective.
The recent book “Going Horizontal” by Samantha Slade sets out a number of practices for people within an organisation to adopt, all of which are designed to break down rigid management practices and enable more dynamic and empowering ways of working.
It would make sense to do lots of small experiments, prototyping new ways of working and being, and learning the lessons before looking to spread the new practices throughout the organisation. Imagine you would like to climb Everest. The first aim is to reach base camp. Once there, you can take stock and consider whether you are ready to launch a bid to reach the summit, or whether to stay where you are. For some, getting to base camp is itself a great feat.
When you are ready, commit.
“You can’t cross a chasm in two leaps”. Lloyd George?
Moving to true self-management is a quantum leap from traditional ways of organising. It requires a dramatic shift at all levels as old habits, established over generations, are discarded and replaced by radically different ones. You have to be prepared to implement a number of mutually-supporting measures simultaneously. If you are half-hearted, there is a real danger of a slip back into hierarchy and bureaucracy when the going gets tough (as it inevitably will in the early stages of implementation). You have left base camp now — to reach the summit you have to be willing to risk all.
To help people accept the shift at a subconscious level, rituals can help. Each organisation can come up with an appropriate rite of passage — a company-wide party, say, perhaps a symbolic changing of the physical architecture of the work space or a new company logo). These signify to everybody that there is no turning back. You are either on the bus or not — there’s no more time for expressing doubt or trying to resist the change.
Make a number of changes simultaneously
Big breakthroughs tend to come when two or more innovations meet. For example, up until the mid-19th century, there were no high rise buildings in the world (the only really tall buildings were cathedrals and the pyramids). The invention of the modern lift, together with innovations in steel construction techniques, enabled the subsequent proliferation of skyscrapers around the world. Likewise self-management is an innovation that relies on the adoption of several smaller innovations at the same time. These include radical transparency (it is common, for example, for all salary and financial information to be shared), removal of management powers (managers are shifted to coordination or other roles) and the realignment of the organizational structure so that the drivers of the organisation come from customers, not from top-down management.
There is a company in the Basque region of Spain called K2K, that has helped more than 70 organizations convert to being self-managed. You can read more about their approach in this blog post here. K2K have a list of changes that they implement simultaneously. It is a truly radical approach but they maintain (based on long experience) that this gives them the best chance of long-term success.
I worked recently with a company of over 500 staff, looking to transition to more horizontal ways of working, as part of a shift to employee ownership. They adopted a comprehensive programme of:
– process re-engineering;
– new governance structures, including a staff council;
– cultural re-training across the company, particularly at the top;
– one-to-one coaching for managers; and
– regular communications across the company.
Now, having successfully completed the transition to employee ownership, they are continuing the cultural work, which they admit will take years more.
Make use of tools and methodologies.
Adopting tools and methodologies can definitely help — indeed, it’s hard to see how self-management can thrive without them. There are now many well-tried tools and approaches available — I mentioned some above. There are even “operating systems” like Holacracy and Sociocracy, designed to provide a framework for the whole organisation to operate within. It has to be said, however, that these tools and methods are a lot easier to adopt at small scale. To shift a large organisation to these new ways of working will take a lot more than just adopting a new operating system. Look at the struggle that Zappos has had with adopting Holacracy.
Make space for new conversations
People at all levels need to get their head round these new ways of working. They will want to discuss it in groups — to clarify fears, uncertainties and objections. They may want to visit companies that already practice self-management or similar. There are bound to be lots of questions, and they are far more likely to trust the responses of people they see as their peers, rather than their own managers.
Remember it is about co-creation
Imposing self-management on others is unlikely to go well. By ordering someone to think for themselves, you are sending a very contradictory message! So staff need to be brought in from the very beginning. This massively increases the chances of buy in — and ultimately, if staff do not buy in, self-management will not take-off and will never be sustained.
There are lots of ways of doing this — large open space sessions, setting up a representative group of staff to engage with, holding live Q&A sessions where any questions are allowed…. if enough staff believe that they have had a real say in how self-management is implemented, and management have learned to get out of the way, the company is already on the way to creating an “everyone culture”.
The management of one company I worked with froze when it came to involving staff in the early stages. They kept asking “how?” I think what they really meant was “I’m scared”. I suggested they bring a group of volunteers together, and start talking to them. This was the beginnings of what turned into a very influential group of staff who advised the board on how to implement the new ways of working. The board soon learned to value the thoughtful and considered input from this group, and would invite them into discuss key matters affecting the business.
Ultimately, what we are talking about is a revolution. And as the revolutionary writer Paolo Freire said, true revolution is done by the people, not to them. If you want to lead, you have to ultimately get out of the way and trust the people.
Be compassionate — with yourself and others.
The shift to self-management is not just about methods, tools and practices — important though these are. Equally important is the more subtle, inner work. There is a sort of maturing curve that someone, whether manager or staff, goes through when adjusting to a self-managing regime. Growing up isn’t straightforward, and it really helps to get moral and other support from those who been there before. Making use of things such as peer-support groups, individual coaching, quality circles, cultural training and the like can enormously help the process. And be prepared to lose some people who are not willing or able to shift.
The good news is that there is more and more support for people going on this journey — communities of practice like Reinventing Organisations, new-style consultancies offering support, and an increasing number of examples to draw on. So although it is an uncertain journey, you are not alone.
Money Adopting self-management requires a profound mindset shift. Part of the old mindset is an assumption of a big differentiation between individuals and their value to the organisation. This hidden assumption becomes visible in the way people are rewarded.
Self-management relies on people at all levels valuing themselves and their ability to contribute to the success of the organisation. A large pay differential (i.e. the difference between highest and lowest paid) conflicts with this. Gross inequality and self-management don’t sit well together.
Many organisations that seek to be more liberating and self-managing are transparent with money. They also limit inequality in pay. Ben & Jerry’s for a long time had a maximum pay differential of 5 times between lowest paid and highest paid. John Lewis, the (much larger) employee-owned company, has a maximum pay differential of 75x. You can argue about the figure, but it is harder to object to the principle. K2K implement a pay differential of around 2.3 times. They acknowledge that this is a very difficult matter to manage in practice — but they maintain it is vital to long-term success.
The other way that many such companies seek to reduce the gap between the top and bottom is in profit-sharing. At K2K companies, typically 30% of profits are shared with staff. This is another challenging topic, one that leads into the next theme.
The ownership question Ownership is not something that is talked about much in the literature around self-management. There are many reasons for this. In particular, ownership is largely about power, and power is not usually talked about in polite company. Merely to talk about ownership is a political act — those who have power/land/money are far happier when their power operates invisibly and is unquestioned.
So long as the “owners” retain the ability to intervene in an organisation, it is questionable how solidly self-management can be implemented. Laloux relates stories of how in some organisations, self-management was tolerated by the owners and board for several years until things got difficult, at which point the owners stepped in and scrapped it. To reduce the likelihood of this happening, if adopting self-management within a larger organisation, it would be prudent to create a self-regulating space within the larger structure — for example, setting up a board of directors for that unit, one that includes people who are culturally aligned with self-management. It is normal to have crises — the danger is that someone who is sceptical of self-management uses a crisis as an excuse to revert to command-and-control.
Be patient, and trust in the process
Ultimately this is about a maturing process — individuals and organisations growing up. This takes time and is best not rushed. Timing is everything. Just as my son will in good time be ready to spread his wings and fly, people working within organisations will, in time, individually and collectively, reach a point where they are ready to break out of the structures that hold them and step into new, more liberating structures. If you can keep your nerve and enjoy the journey, you will find it a rich and rewarding one.