What is Self-Management
Every day, self-management in companies and organizations is no longer a mysterious subject and begins to be discussed in the corridors and offices. Many yearn for it and others say it is impossible. With this article, we hope to explain basic concepts about self-management and dispel some misinterpretations.
Definition of self-management and horizontal management
When we talk about self-management in companies and organizations, other terms appear that are similar, but we will differentiate here to avoid confusion:
Set of organizational practices that opposes the hierarchical structure of the chain of command, being able to end it, without proposing a substitute structure. It would be the equivalent of eliminating the positions of managers and directors in a company, placing everyone in the organization with the same authority and decision-making power.
Set of organizational practices that seek to distribute authority, giving clarity of responsibilities and maximum autonomy to each member of the organization. In this case, people fail to report to a superior, but follow a set of rules and agreements signed collectively. These agreements form a framework organizational structure that does not require everyone to have the same decision-making power and authority, just makes it clear how this is done and prevents the boss-subordinate relationship.
Advantages and disadvantages of self-management
We compiled the main advantages and disadvantages pointed out by different researchers. We highlight:
On a study by Ernst and Young, a self-managed organization called Buurtzorg that works in the home health area, has been compared with other traditionally managed organizations that work in the same segment and region. The result showed that self-management in this case managed to decrease the time required for the recovery of patients treated on 40% on average, with a total cost below the market.
Buurtzorg is continually voted the best organization to work for (organizations with more than 1000 people) in the Netherlands. According to the Harvard Business Review, the Morning Star, a self-managed tomato processing company, makes its temporary employees feel as owner and engaged as directors and executives of other companies.
For an organization to adapt to the needs of an ever-changing environment, it needs to make decisions more quickly. In a research conducted in the Washington state technology department, the time to solve a problem during a meeting and make a decision, fell 93% after adopting self-management practices.
Transition is not simple
The biggest disadvantage of self-management is the time and energy needed to promote the transition. People and organizations are used to operating using the chain of command and it will not be with a workshop or application that everything will change. The larger the organization, the more difficult the transition is.
Examples of self-managed companies
Self-management is not so new, so we already have many examples that we can study and be inspired by. See the table below that we have organized with some examples that show the variety of sectors and sizes of companies that self-management has already shown to be successful:
|Morning Star||Food industry||400 to 2400 *|
|Menlo Technologies||Software development||144|
|Precision Nutrition||Nutrition advice||55|
|Jobs||Recruitment and selection||250|
|WL Gore||Materials Industry||10.200|
|Mattblack Systems||Aeronautical Technology||40|
|Sun Hydraulics||Hydraulic parts||900|
* depends on the season
Myths about self-management
What comes to your mind when you hear the word self-management, horizontal management or distributed management? Part of Target Teal's work is demystify these terms and fend off ghosts, so that organizations that are thinking of following this path can have more peace of mind in initiating transition processes. We have chosen here some phrases that, although they are still very much said, are far from what we believe to be true about self-management.
There are no leaders in self-management
We no longer associate the leadership to a position or function and we come to see that in each situation different leaders can emerge. This fluid nature of leadership for some may generate insecurity, but it validates what already exists naturally in social groups, leaving aside the artificiality of senior management positions, which are presumably occupied by highly trained leaders. In short, self-management creates the space for everyone to lead and follow, depending on the moment or challenge to be faced.
In self-management decisions are slow
Here there is a considerable difference between what exists in people's imagination and what we practice and teach. Do you know those endless meetings to reach consensus? Do you know those big assemblies where people vote? So, we don't work and we don't want to propose anything like that. The self-management practices we use and suggest in workshops and consultancy work go in the opposite direction. First, we believe in agile management with many small decisions being made autonomously by many people. And when a group (maximum 15) needs to decide something, we don't want everyone to say yes to a proposal, but just agree that it is safe enough to try. These are practices that delegate a lot of authority and let real experience be the main judge of the effectiveness of a solution.
In self-management there are no rules, metrics and structure
When working in a hierarchical organization, we know that a rule is the most important and often the only one. "Do what your boss says!" In self-management we need to operate following much more numerous principles and rules, and the most important: rules that are valid for everyone. Structure and clarity of responsibilities are also two important attributes. Numbers, whether financial or that show a result or efficiency of a process, are also not abolished. What exists is a reframing and readjustment of metrics that are no longer at the service of “command and control” and begin to help everyone understand a complex reality and learn about the impact of the decisions made.
A team needs to be mature before being self-managed
Self-management is the best, if not the only way for a team to mature and become ready for self-management. Keep treating your team like irresponsible children or teenagers that the so-called maturity will never take effect. Read this post that explains in more detail our position on the subject.
In self-management everyone is equal
When we talk about self-management we are not talking about an egalitarian utopia or an equal power for everyone. We are not arguing that all ideas and suggestions have the same value or that one person cannot have the authority to decide something that affects the other. We recognize that people have different skills, experiences, passions and levels of resilience in specific contexts. We advocate equivalence in the definition and application of rules and principles, as well as a balanced and transparent distribution of authority.
People do not want responsibility and autonomy
Perhaps there is a drop of truth in that sentence. After all, we are conditioned by our society and culture to transfer a good part of our responsibilities to other people. “We transfer the responsibility for taking care of safety and health to the government. We transfer to teachers and parents the responsibility to teach and educate us. We transfer the responsibility of dealing with conflicts and managing our own work to the boss. ”
However, people still want autonomy and yearn for more freedom to create and work. They also want to reap the rewards of a job well done. So we arrived at this triad: Responsibility, autonomy and reward for work. We cannot offer only the first two of this trio and think it is a fair offer. Think about this when inviting people to self-management, when they feel wronged for the way they are being rewarded. Even if for you, this is unfounded.
All of this is still very experimental
In recent years, a lot has happened in this field. Books, frameworks, cases and practices. A lot is yet to come, but we cannot deny that pioneer organizations started their work in the 60s, 70s and 80s. Organizations like WL Gore and Morning Star had to innovate a lot when they were pioneers. Today you can take advantage of what has already been done and without blindly copying, take advantage of established standards and practices that can work for your organization. It will always be necessary to experiment and adapt, but the path taken by others makes the process much easier.
How to self-manage in a company
Introducing or adopting self-management in an organization is not just “empowering everyone”, saying “now you have autonomy!” or create a “horizontal environment” where everyone is considered equal.
This can work when you have a team of up to 5 people. But what if there are 50? Or 9000 nurses, like at Buurtzorg? In that case you will need a little more structure to handle it. This structure helps to distribute authority and streamline decision-making processes.
The smaller the company or organization, the easier it will be to adopt self-management practices, so don't wait for your company to arrive at a very large size.
Overall, we believe that the way for an organization that already exists to adopt self-management is to:
- Someone with institutional power decides to experiment or adopt self-management practices. If you are not a director, CEO or president, one way is to seek an ally with this power, after all the starting point is hierarchy.
- Other people in the organization are involved, and a period where workshops, study groups and even the hiring of specialized consultants takes place so that the organization gains capacity and things start to change.
- Structures, habits, culture and practices start to change slowly, requiring continuous effort from those involved.
- After a period that can vary from a few months to a few years, self-management is consolidated and incorporated into the organization's culture.
If you are starting an organization or intend to start the journey towards self-management, it is important that you study and understand what has already been done to avoid falling into the trap of trying to invent the wheel. We offer a free online course that talks about self-management, horizontal management and self-organization.
Structures of self-managed organizations
During his detailed research in the book Reinventing Organizations, Frederic Laloux discovered 3 different types of structures that allow self-management to happen even in larger organizations. These structures were developed in practice by companies and organizations and were only described later by Laloux. Alert: We do not recommend that you copy a template.
- Parallel Autonomous Teams
- Individual Agreements Network
- Nested Circles
Let's understand them better and how each type of structure fits different contexts.
Parallel autonomous teams
This type of structure emerged when the number of people needed for the organization to deliver value from end to end was small. Let's look at an example already mentioned.
THE Buurtzorg, a Dutch home care and nursing organization, operates using autonomous teams of up to 12 nurses and nurses who care for about 50 patients who are located in the same neighborhood. The team performs all the work of generating value, including planning, scheduling visits, coordinating, purchasing, contracting, providing the service and service (on the phone). There is no call center that centralizes calls! Oh, and teams don't have a "leader" or "manager".
During the training period of these teams, specialized coaches teach people to work in a self-organized way. Nurses are trained in facilitation, mediation and conflict resolution techniques. In addition to more than 700 teams, there are 35 people who carry out administrative and legal work (backoffice). Other than that, little coordination is needed between the teams.
This self-management framework is often used in the service sector or in organizations with a very short value chain. That way it is possible to keep teams small and independent. Note that one team does not depend on the other to generate value, so this type of structure works.
Summary - Parallel autonomous teams
- Applicability: Small or large organizations with a short, replicable value chain. It works well in the service sector.
- Common practices: Structured meetings with facilitation; Integration process for new employees; Book with principles and rules; Counseling process; Mentors without responsibility for team performance.
- Advantages and disadvantages: Easily replicable and scalable; Few rules are needed; You may need a support team; Depending on the case, you may depend on a strong culture to support yourself.
- Examples and cases: Buurtzorg, Valve, RHD, FAVI
Individual Agreements Network
The Individual Agreements Network was created by Morning Star, an American tomato processor. Responsible for producing 40% of tomato sauce consumed on the American East Coast, Morning Star has been operating with this structure since 1990.
The process of Morning Star covers from the planting of the tomato to its processing and distribution. The value chain is extremely long, requiring the work of hundreds of people for the tomato to reach the customer. In this scenario, the parallel autonomous teams model would certainly not work.
Rather than defining a departmental and hierarchical structure, Morning Star employees establish "contracts" with each other that determine responsibilities, agreements and production goals. They are called CLOUs. This peer-to-peer process creates an accountability network that is not centered on a person or chain of command. In addition, there are no managers or supervisors at Morning Star, after all we are talking about self-management.
Another social technology normally present in organizations that operate with this network of agreements is the Counseling Process. This process says that anyone in the organization can make any decision (including purchasing a $100,000 machine), as long as they listen to the “advice” of all people impacted or who have the knowledge to contribute.
It is not necessary to “integrate” all opinions, just listen to them.
Among the disadvantages of this type is the fact that it does not provide a mechanism for structural changes. It is generally more suitable for organizations that do not undergo so many changes in the chain and in the production process.
Summary - Network of Individual Agreements
- Applicability: Medium and large organizations with long value chains but that do not need to undergo major changes as the context is stable.
- Common practices: Function structure with clearly defined activities; CLOU - Letter of Understanding between Colleagues; Onboarding process and management training; Book with principles and rules; Self-defined wages with peer calibration; Counseling process; Formal multi-stage process for conflict resolution.
- Advantages and disadvantages: Little adaptable; It does not require teams; Little tested.
- Examples and cases: Morning Star
The most flexible and adaptable structure described by Laloux is that of Nested Circles. Because it is more robust, it can be used in sectors where the value chain is long, complex and dynamic. The structure of Nested Circles is formed by circles that are subdivided into papers and other internal circles. There are bonding papers that connect the layers and create an explicit communication channel between the inner and outer circle.
Does it look like the hierarchical structure? Yes, there is a “hierarchy of circles”. But this hierarchy is a hierarchy of work scope (roles and circles), not of positions and people. In addition, there are rules that prevent external circles from interfering with the functioning of internal circles, ensuring self-management throughout the organization.
There are some social technologies which facilitates the process of implementing a Nested Circle structure in your organization. THE Holacracia, Sociocracia 3.0 and the O2 - Organic Organization are examples. Understand that these technologies act as catalysts for a broad and deep transition to self-management. They are not formulas or recipes.
If you want to know more about O2 and how it can help you transition to self-management, do our free online course: Fundamentals of self-organization.
The great advantage of this type of structure is its versatility, and even if you choose another path, learning the practices that are used here, can be useful in other scenarios and contexts.
American shoe and online retail giant Zappos was one of the largest companies to adopt a nested circle structure so far, but we already have organizations of all sizes and sectors, including two in the public sector.
Summary - Nested Circles
- Applicability: Organizations of all sizes with long value chains that undergo a lot of changes due to a dynamic context.
- Common practices: Fluid paper structure; Governance records continuously updated by meetings using an Integrative Decision-Making Process; Regular and structured meetings to generate transparency; Book with principles and rules; Social frameworks and technologies to facilitate adoption such as Holacracia, S3 and O2.
- Advantages and disadvantages: Very adaptable; Structure with more rules; You need connection papers (double links); Learning this, the others are simplifications of this.
- Examples and cases: Zappos, WaTech, Blinkist, Target Teal.
When we work with our clients or give workshops on the topic, it is common for people to have many questions about how certain practices, processes and habits are in a self-managed environment. Below is a list of the most common and links to other articles that seek to provide an answer or simply expand the conversation.
How are salaries in self-management?
This is usually a taboo subject in many companies. In self-management, people gain more voice and end up bringing up their dissatisfactions on the subject. Then there are opportunities to talk about it and correct injustices. In this article we talk a little bit about why this subject is taboo and how to treat it better.
How do I advance in my career if I don't have a hierarchical structure for me to move up?
The paths multiply in self-management. Want to understand better? I recommend reading this account of someone who is already living this reality.
Who defines the strategy in a self-managed organization?
We do not forget the strategy in self-management, we only change the way we think and act strategically. This article on strategy in VUCA world gives good ideas on how this is done.
How do people deal with conflicts without a boss to mediate?
The organization needs to invest in training and programs to enable people to deal with conflicts (as always). Not that self-management increases the number of conflicts, on the contrary, we can have a work environment with less drama and much lighter. Here you will find some paths and tips.
Who sets goals and who performs performance evaluation in a company without bosses?
Article originally written by Rodrigo Bastos and published ON HERE