Self-Management: The twilight of bosses

Fernando Polo

5 May 2015

In 2008, the Towers Watson consultancy surveyed 90,000 employees in 18 countries, discovering that only one-fifth of them felt really committed to their companies. This study also correlated with the global index of “employee engagement” by Gallup. Gary Hamel, the innovation guru in employee management asked, in his book “What matters now,” how it is possible that “bosses” let this sad reality slide. He added: “Do they perhaps think that employee motivation isn’t directly linked to the competitiveness of their organizations?”

In this new era of business competitiveness, shorter product cycles, more global and competitive markets, more fragile barriers to entry, instantly replicable innovative services, business transactions increasingly based on information, will all hinge on the digital disruption. In fact, it is evident that chaos and change are our only assured travel companions, and in order to address this flurry, innovation will be the worn out mantra repeated over and over again. Yet, it is a well-known fact that innovation does not often dwell in the DNA of work teams, and so, if we’re lucky, we will find it in the bureaucracy of a department or in a segment of the R+D+i (i.e. research, development and innovation) budget.

When Ricardo Semler, aged 22 at the time, took over Semco from his father, the Brazilian industrial company was in decline. After an expansive policy of mergers and purchases, causing the company’s directors great distress and headaches, Semler himself had a health scare that led him to question his entire lifestyle. From that moment onwards, he began to radically transform the organization by changing how workers and employees participated in management. By taking privileges away from directors (parking spots, secretaries, disproportionate salaries) and giving responsibility in decisions—initially simple ones—to company committees (scheduling flexibility, painting work stations different colors, production methods, etc.), Semco was able to take on one of the Brazilian economy’s most traumatic episodes, growing and becoming one of the most renowned companies on the complex Brazilian industrial panorama.

Although they are very rare, there are some companies that practice “self-management.” Some of them are as follows: the aforementioned Semco, Gore (creator of GoreTex), Whole Foods (a chain of supermarkets whose focus is on organic and healthy food products), Morning Star (a tomato manufacturer), AES Corporation (a power company with 40,000 employees in 31 countries), Buurtzorg (a Dutch at-home health service company), Favi (a French automobile parts manufacturing company), and many others further analyzed in my book, Lidertarios. All these successful companies have survived in turbulent markets. Gore, for example, has earned a profit in every one of the fifty years that it has existed. HCL Technologies is another impressive example; the company’s former CEO, Vineet Nayar took the reins of the Indian company in 2006, during a period of continued loss of market share, and by turning over the hierarchy and management, he managed to get supporting departments and company managers to serve those employees that actually delivered value to their clients. Their program “Employees first, clients second” has reported some surprising financial results, and in 2008, it was considered by Fortune to be the world’s most innovative company in terms of management.

Despite all this, it must be admitted that the process of self-management contains a long road, and it involves elements that are highly rejected by the directorate elite who are accustomed to hoarding the high-ranking positions that they have obtained. It requires factors such as absolute financial transparency, a decrease in salary differences and privileges between directors and employees, telecommuting, a reduction in standards and procedures, consensus on tactical and even strategic decisions, voting on the physical site, etc. In short, it is a form of democracy seeping through the walls of companies. Self-management treats employees like adults, and in return, they give their commitment, passion and enthusiasm, and as we know, it’s easy for bosses to order someone to perform a task, but it isn’t quite as easy to impose commitment.

When we began the restructuring of Territorio creativo in 2009, we imagined that the only way to survive in such a virulent Internet environment was to combine our 2.0 culture (Article in Spanish) with a company organization system that aspired to self-management. Without this determination, we wouldn’t have managed to grow so quickly, sustainably and robustly in such unstable conditions. However, there’s still a lot of road to cover, and we still feel like a company looking ahead, crammed into a corset from the 20th century.

For example, we still have a centralized system of operations that assigns projects to Tecerians as they become available, from the hands of the managing partner who has been in charge of the sale. This is the traditional method for service companies, and we certainly aren’t going to earn a medal in innovation for this. But now and again, we like to imagine what a decentralised procedure would be like, where the Tecerian who led the sale also has to sell the project internally, in order to draw in other skilled tecerians who want to be a part of it. Such a system would give us a lot of headache, and we’d have to work really hard to establish key guiding principles, but there is no doubt that it would garner even greater involvement in projects as well as a commitment to project results. Now, we don’t have a date yet, but we will indeed get there. Little by little.

Motivation, empowerment, and innovation –  these are the words on the tips of all of our tongues. But we all know that between words and actions, there are a lot of bosses holding you back. The twilight of intermediary controls and upper management’s privileges is fast approaching. The Facebook generation, requesting real meritocracy in this frenetic 21st century, with their tenacity in chaos and constant change, will end up forcing it to come.