Have
you ever heard of a company that had no managers? I don’t mean a company that
doesn’t have many managers. What I mean is a company with no managers at all. I
have never heard of anything like that before until this week and, strangely,
it is a company with which I am already vaguely familiar because I have used
their products before. There’s a good chance that you have as well. The Morning
Star Company based in California is a fairly common household name as they make
canned tomatoes sold in stores all over the country. And they have no managers.
There are no bosses at all. An article in the Human Resource Management International Digest outlines how the
company operates (Hamel, 2012). This is a pretty radical approach to operating
a business but it seems to be working quite well. First, management in the
traditional sense is very expensive. Traditionally, the more employees you
have, the more managers you need. Additionally, you need managers for the
managers and then, as the company grows, managers for those managers. Hamel
(2012) notes that if each manager earns more than the employees below them,
management alone can prove to be overbearingly costly. Not only is management
costly but another issue is that “as decisions get bigger, the ranks of those
able to challenge the decision maker get smaller. Hubris, myopia, and naïveté
can lead to bad judgment at any level, but the danger is greatest when the
decision maker's power is, for all purposes, uncontestable” (p. 50). By
eliminating management, the power is also eliminated. One might think that
would mean that everybody has the power, then, and would create even more
problems but when all peers have equal power, bad decisions can be crushed as
easily as they are created. Finally, “A related problem is that the most
powerful managers are the ones furthest from frontline realities. All too
often, decisions made on an Olympian peak prove to be unworkable on the ground”
(p. 50).
As
we continue to explore complex adaptive systems (CAS) and how that applies to
organizations (Obolensky, 2014), I would say that this surely fits the bill of
complex system. You see, a few hundred years ago, successful organizations
worked with a functional silo system meaning that every department had their
own manager and there was no cross-talk. Most organizations that operated in
this way have ceased to exist. To survive, they had to evolve to cross
functional matrices. “In these organizations, most people are working in a
cross-functional way, where a product line or region has its own separate
support functions. Reporting and processes are efficient and centralised
functions are slimmed down” (p. 25). (By the way, that is not a misspelling.
Our primary text for this class is from an English author.) What is meant by
this is that as companies have evolved the exchange of information flows freely
from department to department at all levels. As the evolution continues,
though, organizations are moving to CAS organizations where information is
completely openly shared and hierarchy is very informal. In fact, “formal
hierarchy is rather flat, dynamic and more to do with meeting the needs and expectation
of external stakeholders than actually ‘running’ the organization” (p. 27). In
other words, in a CAS organization, the hierarchy is kind of like the royal
family of England – a figurehead for the people but really quite powerless.
(Speaking of which, did you know that the queen is on Canadian dollars?) So an
organization with no managers is spot-on a CAS organization. In a way, it
almost sounds like Communism. Everybody has equality and is working toward a
common goal. So how does it work if Communism fails? My opinion is that it
works because of Capitalism. The common goal is to turn a profit. Since
everybody has equal power, everybody can keep everybody in check. Information
has to flow freely and those that do not perform can be thinned out by their
peers. Here’s another breath of fresh air on that idea, though. This doesn’t
mean that the employees at Morning Star are empowered. Oh, no. Not at all. “That's
because the notion of empowerment assumes that authority trickles down--that
power gets bestowed from above, as and when the powerful see fit. In an
organization built on the principles of self-management, individuals aren't given
power by the higher-ups; they simply have it” (Hamel, 2012, p. 52).
In
his appearance on the TED stage (yes, another TED Talk, but this one is a
required reference and not just one that I added to my blog), Martin Reeves of
The Strategy Institute discusses how strategy as we know it has to be reborn
(Reeves, 2014). In his speech, he notes that we, as organizational leaders,
spend massive amounts of time making a plan that, once executed, is nearly
immediately obsolete. He points out that the gap between highly successful and
massively failing organizations is growing and that it pretty much all stems
down to strategy. Just as organizational structures must evolve or die
(Obolensky, 2014), so, too, must the strategies of those organizations. Morning
Star’s strategy has a high level of mobility and innovation which has led to
success. I honestly have never heard of another organization that has
absolutely no formal management structure (and am still having a hard time
wrapping my head around Morning Star). As a Soldier (specifically a Recruiter
Center Leader), I am left wondering if there is any way that I could apply some
of these lessons to my own organization. Clearly there is a 0% chance that we
will move to a non-hierarchical structure in my office. I HAVE to be the boss.
The structure of the military will always be that way because there has to be a
clear chain of command for the battlefield. (Granted, we aren’t really fighting
too many battles in recruiting but we are still in the Army.) However, that
doesn’t mean that we can’t continue to cross-talk at all levels. But what I
really love is what I was just discussing about Morning Star employees not
actually being empowered because they already have the power. To what extent
can I apply this concept? My team SHOULD have power. I should be little more
than a director. That is my takeaway from this.
Hamel,
G. (2012). First, let's fire all the managers. Human Resource Management International Digest, 20(4)
doi:10.1108/hrmid.2012.04420daa.015
Obolensky,
N. (2014). Complex adaptive leadership:
embracing paradox and uncertainty (2nd
ed.).
Farnham: Gower.
Reeves,
M. (2014, December 22). Martin Reeves:
Your strategy needs a strategy. [Video file]. Retrieved from https://www.ted.com/watch/ted-institute/ted-bcg/martin-reeves-your-strategy-needs-a-strategy
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