Morning Star is one of the world’s leading processors of tomatoes—and one of the most progressive models of a self-managed enterprise we’ve seen. The company was founded in 1970 with a distinct philosophy: people are most productive, creative and happy when they have personal control over their own lives. And the best organizations are those in which people are not managed by directive from above but when coordination happens among peers who manage their own relationships and commitments. In the last 30 years, founder Chris Rufer and his colleagues have built a company to bring that philosophy to life: no bosses, no titles, not job descriptions, and a sweeping scope of authority for every individual. ... At the heart of this peer-regulated collection of colleagues who determine their own roles and responsibilities is the “Colleague Letter of Understanding” or CLOU. Four years ago, the company introduced a custom social network to support a more dynamic, transparent, and scalable approach to self-management. Today, an ever-evolving (and immediately visible) network serves as “org chart” and peer-to-peer responsiveness replaces hierarchical control.If you'd like to learn more, check out the Self-Management Institute.
The boss-less organization: From bosses to mentor/investors
A hack from Tory Gattis
How do you move from a “command-and-control” leadership structure to one focused on motivating and mentoring? That’s the challenge Tory Gattis, founder of OpenTeams, takes on in his hack. Gattis argues that organizations need to abandon the boss-subordinate hierarchy in favor a new relationship that brings internal “mentor investors” together with intrapreneurial teams. Like Silicon Valley’s angel investors, mentors would provide funding, offer advice and make connections—but wouldn’t directly manage.
Key elements of the hack: Employees pitch ideas for investment—for a small project aimed at operational improvement or something grander. There is a large network of mentor investors who are able to provide funding and project teams are free to shop their ideas around. Investors can form syndicates to back bigger, riskier investments. Over time, successful investors and teams would command a larger share of resources.
In an organization built around Gattis’ hack, every idea would have the chance to compete on an equal footing and no single manager would have the power to kill a great idea. That would be a huge spur for innovation and proactive change.
"That’s really the great mystery about bureaucracies. Why is it so often that the best people are stuck in the middle and the people who are running things—the leaders—are the mediocrities? Because excellence isn’t usually what gets you up the greasy pole. What gets you up is a talent for maneuvering. Kissing up to the people above you, kicking down to the people below you. Pleasing your teachers, pleasing your superiors, picking a powerful mentor and riding his coattails until it’s time to stab him in the back. Jumping through hoops. Getting along by going along. Being whatever other people want you to be, so that it finally comes to seem that, like the manager of the Central Station, you have nothing inside you at all. Not taking stupid risks like trying to change how things are done or question why they’re done. Just keeping the routine going.And that's why Management 2.0, Organization 2.0, the Bossless Organization, or whatever you want to call it is so critical to the future of not just our country, but all of human civilization.
...environments where what is rewarded above all is conformity... I realized that this is a national problem. We have a crisis of leadership in this country, in every institution."
I'm so pleased to inform you that you've won an M-Prize for the Hack you contributed to the MIX: The Bossless Organization: From Bosses to Mentor InvestorsJudges for the M-Prize included CEOs and thought leaders such as Harvard professor and former Medtronic CEO Bill George, W.L Gore's CEO Terri Kelly, Whole Foods' Founder and CEO John Mackey, "Future of Work" MIT professor Tom Malone, and venture capitalist Leighton Read. I'd say that's quite a list of endorsements!
We combed through hundreds of contributions from MIXers from around the world and from every kind of organization—looking for boldness, originality, thoroughness, and the ability to inspire and instruct in equal measure. We certainly found those qualities in your contribution!
The official announcement of the winners is tomorrow morning (10am EST). The McKinsey Quarterly will publish an article about the M-Prize and will send an alert to hundreds of thousands of subscribers. We'll celebrate you and your fellow winners on the MIX home page, M-Prize page and in a series of blog posts from me and Gary Hamel. You'll also receive recognition on the MIX and the Quarterly's Facebook and Twitter streams and in a variety of our partner's forums (from the Wall Street Journal to opensource.com). We'll keep you posted as these announcements go live. And, of course, you are now a lucky ticket holder for the 2011 World Innovation Forum.
The BP oil spill disaster has shown us all too vividly the catastrophic consequences of excessive organizational complexity and the potential risks to corporate longevity. This paper sets out a model for both the horizontal and vertical compression of organizations to simplify them for enhanced risk mitigation, with additional benefits for innovation, decision-making, employee engagement and action. Horizontal compression involves complex systems visualization, modeling, and simulation for cross-organizational integrated solutions, leading to better decision-making, action, and risk mitigation. We also propose vertical compression of the bureaucratic, command-and-control hierarchy into a flat, entrepreneurial, market-based, self-organizing Bossless Organization. This model is inspired by the Silicon Valley and open source ecosystems to improve innovation, employee engagement, and adaptation to the rapidly changing business environment. Bosses are replaced by non-controlling Mentor Investors—modeled on the angel investors of Silicon Valley—who then sponsor self-organizing, intrapreneurial project teams. Linus’ Law of the open source movement also enhances risk mitigation (and therefore corporate longevity): “Given enough eyeballs, all bugs are shallow.” The combined horizontal and vertical compression components of the SIDEARM model can provide a powerful and sustainable competitive advantage to any organization.If you have any questions or would like to explore the SIDEARM model for your organization, please don't hesitate to comment here or contact Howard or myself (tgattis (at) openteams.com).
...the trends here are big and undeniable. Change is rapidly accelerating. Transaction costs are rapidly diminishing. And as a result, everything we learned in the last century about managing large corporations is in need of a serious rethink. We have both a need and an opportunity to devise a new form of economic organization, and a new science of management, that can deal with the breakneck realities of 21st century change.
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The new model will have to be more like the marketplace, and less like corporations of the past. It will need to be flexible, agile, able to quickly adjust to market developments, and ruthless in reallocating resources to new opportunities.
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This is the core of the innovator's dilemma. The big companies Mr. Christensen studied failed, not necessarily because they didn't see the coming innovations, but because they failed to adequately invest in those innovations. To avoid this problem, the people who control large pools of capital need to act more like venture capitalists, and less like corporate finance departments. They need to make lots of bets, not just a few big ones, and they need to be willing to cut their losses.
The resource allocation problem is one Google has tried to address with its "20%" policy. All engineers are allowed to spend 20% of their time working on Google-related projects other than those assigned to them.
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In addition to resource allocation, there's the even bigger challenge of creating structures that motivate and inspire workers. There's plenty of evidence that most workers in today's complex organizations are simply not engaged in their work. Many are like Jim Halpert from "The Office," who in season one of the popular TV show declared: "This is just a job.…If this were my career, I'd have to throw myself in front of a train."
The new model will have to instill in workers the kind of drive and creativity and innovative spirit more commonly found among entrepreneurs. It will have to push power and decision-making down the organization as much as possible, rather than leave it concentrated at the top. Traditional bureaucratic structures will have to be replaced with something more like ad-hoc teams of peers, who come together to tackle individual projects, and then disband.
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The new model will have to go further. New mechanisms will have to be created for harnessing the "wisdom of crowds." Feedback loops will need to be built that allow products and services to constantly evolve in response to new information. Change, innovation, adaptability, all have to become orders of the day.
Can the 20th-century corporation evolve into this new, 21st-century organization? It won't be easy. The "innovator's dilemma" applies to management, as well as technology. But the time has come to find out. The old methods won't last much longer.
