You probably know lots of people who are dissatisfied at work and disconnected from their colleagues, and this is probably because of how they are collectively organized. The digital revolution has transformed relationships; hierarchical models worked just fine during the industrial revolution, but they are not suited to the current times. Businesses and complex organizations are struggling to keep up with technological and social evolution — as shown by a string of economic crises, brands that do not understand young people, high rates of dissatisfaction at work, etc.
If change is constant, flexibility is an indispensable value for any business. Not only is operating by command and control “out of fashion”, it can also compromise progress and profits.
In this context, organizational models based on self-management and distributed leadership are emerging as effective alternatives for the modern world. Some companies have already changed the way they are structured, but when it comes to self-management, there is still a lot of doubt and apprehension.
What will be the new organizational structure? How will decisions be made — individually, by voting, or by consensus? How is it possible to transform a pyramid hierarchy into a flatter and more self-managed network?
Starlings flying together in unison are examples of self-organization in nature — a spontaneous and unbreakable connection.
Structure and transition
Firstly, self-management is not the same as an absence of structure. For those who only have experience with the outdated educational models and organizations inherited from the industrial revolution, the natural instinct is to think that self-management means an absence of rules, but that would result in organizational failure. The truth is that self-managed systems can (and should) have a structure.
While it is dangerous to maintain the habits of a hierarchical model in a horizontal system, it is also fatal to break the hierarchical pyramid and remove the bosses without restructuring key business processes. Decision making, conflict management, budgets, layoffs, and many other processes still exist in the new configuration. It is therefore vital that all the support previously provided by the top positions is redistributed among the nodes of the network.
Those who were at the top of the pyramid get more free time because their workload decreases and their responsibilities are shared among more people, while those who were at the base of the pyramid gain more autonomy and flexibility, because needless validation measures are eliminated.
In an effort to overcome problems and improve business dynamics, companies operating without traditional leadership have invested in other areas, such as problem-solving and interaction training. Topics such as group facilitation, ways of listening, non-violent communication, and how to hold productive meetings help encourage good interaction between employees.
Of course, the transition is not always simple. Self-management models are not free of their own challenges. It is important to view the process as a continuous journey of individual and collective learning. Freedom and autonomy can paralyze those who have only ever worked under the chain of command and control. But horizontal systems work best when those involved learn to deal with these types of friction — mistakes are a fundamental part of the process.
If this all seems too abstract, the good news is that due to the open-source culture of many modern companies, several of these adapted methodologies are freely available online. This facilitates adaptation: learning from those who have already been through the process and adjusting it according to the needs and nature of the business.
The book Reinventing Organizations, by Frederic Laloux, serves as a manual for professionals who want to experiment with models more in tune with the spirit of our time. During his research, he looked at twelve inspiring self-managed companies, all with over 100 employees and all at least five years into the process. His website offers a variety of open-source self-management methods for those looking for examples.
Another common misconception is the belief that self-management models are aimed solely at small businesses, creative workplaces, or markets with low information complexity. This is not true.
There are traditional industries that have been operating under distributed leadership models for decades. They have survived various economic crises with just as much resilience, if not more, than companies that operate hierarchically.
Morning Star is the largest tomato processing company in the world. It employs more than 400 people, from truck drivers and machine operators to engineers. Despite being a very traditional business, with no sign of glitz or glamour, the company has been run without bosses since 1970, and has an annual revenue of US$ 700 million.
Buurtzorg is a Dutch neighborhood nursing company, offering nursing care to the elderly and patients in their own homes. Its annual turnover is around 200 million euros. The company has no leader; just six people working in financial support and more than 9,000 employees divided into teams of a maximum of 12 people.
Self-management and individual power
Harvard Business Review has criticized the traditional management model in the past, describing it as a series of “high-salary castes,” and has advocated for distributed leadership systems. In fact, management is often a form of bureaucracy that exists only to make sure people are doing their job well — and yet they still fail.
Instead of spending money on expensive salaries for managers, why not invest in a system that values employees and encourages them to work to their full potential? Why not go even further and reinvest the good performance of managers back into operations?
The magic of self-managed environments is that they allow every employee to be the best version of themself through open interaction and collaboration. Self-management and horizontality do not necessarily mean everyone is equal, but that through mutual respect, everyone is free to reach their full potential. Nobody empowers anybody else, because power already exists within each person.
APAC (Brazilian Association of Protection and Assistance to Convicts) is an example of a self-managed organization whose existence is directly linked to the belief that everyone has potential. In Brazil, APACs function as self-managed prisons that aim to reintegrate convicts into society.
If a hierarchical company wants to transition to self-management, a simple first step is to train and value the members of its team — something that, in theory, should always be done anyway. This is also a subjective movement that makes people feel capable and confident when making decisions about themselves and others. The bottom line is all about putting the collective good first.