Once upon a long, long time ago, it was good to be king. Being an unchallenged leader was so good, in fact, that the top-down, command-and-control organizational model that sprung from the banks of the Tigris and Euphrates rivers when the Mesopotamians first used mass labor to irrigate crops remained relatively unchanged for the next 6,000 years.
In early 20th century America, researchers began studying the impact of managerial behavior on employee productivity in organizations. The video titled (I kid you not) The Year They Discovered People documents studies conducted in the 1920s on workers at the Hawthorne plant of the Western Electric Company in partnership with Harvard Business School. The research first focused on environmental factors, like better lighting, that would result in a more responsive, efficient workforce. Much to the surprise of the researchers, however, was the finding that social factors played a larger role in workforce efficiency than environmental factors. The Hawthorne studies found that manufacturing workers who received additional attention from their managers felt that they were cared about as human beings. Social factors were, in fact, equally important to financial motives – at a time when the average pay was 50 cents per hour.
Fast forward 100 years. Information is the new raw material. Survival in the 21st century information economy means turning information into knowledge, and knowledge into insight at lightning speed. We know that organizational structures still slogging in Mesopotamian mud are doomed for extinction. Somewhere between a purely bureaucratic organizational structure and the notion that every human wants to contribute to something greater than themselves, however, is the question of how to balance organizational structure with flexibility, fluidity, and role ambiguity. You’re probably familiar with the holacracy model famously adopted by Zappos in 2014. Here are two more examples of how far the pendulum can swing from bureaucracy that you may not have heard of:
What’s the theory? As human consciousness evolves, so do our organizational systems. The Teal theory shifts from external measures of success to intrinsic needs along a color-based motivational scale. It’s less important if we get what we want (Red), we conform to social norms (Amber), we are effective and successful (Orange) or that we belong and have a say (Green). Now, humans are motivated by Teal — Does it feel good? Am I being my true self? What is right for me to do? Am I being in service to the world? In Teal, obstacles are life’s way of teaching us about ourselves and the world. We embrace the possibility that we were part of creating the problem.
How are they structured? Small teams take responsibility for their own governance and for how they interact with other parts of the organization. Assigned positions and job descriptions are replaced with a multiplicity of roles, often self-selected and fluid.
What’s radically different? No job descriptions, no targets, few budgets. In their place are soulful practices that enable extraordinarily productive and purposeful organizations. People’s actions are guided not by orders from someone up the chain of command but by ‘listening’ to the organization’s purpose.
What company is successfully using this structure? The Morning Star Company
Where can I read more? Reinventing Organizations, by Fredric Laloux
What’s the theory? Employees are encouraged to tap into their entrepreneurial nature, initiate new projects, and choose which of them to work on. Self-selected teams emerge spontaneously where the most exciting opportunities appear to be rather than according to a strategic plan or a product development roadmap.
How is it structured? Instead of projects coming to established teams, teams converge around projects. These are highly collaborative and mostly temporary structures. Their edge comes from the ability to form links both inside and outside an organization. These nimble groups come together around a specific task, recruiting personnel, assigning roles, and establishing objectives. When the work is done they disband their members and take their skills to the next project.
What’s radically different? If a project launch fails, employees move to other, more promising projects. As a result, the organization is market focused—its model resembles that of a venture capitalist: it invests only when it sees a clear pathway toward a commercially viable product.
What company is successfully using this structure? Mundipharma
Where can I read more? All Edge: Inside the New Workplace Networks, by Clay Spinuzzi
Traditional management goes wrong when one powerful individual prescribes what must be done—or how—because of their positional role, not because he or she has more insight into what will produce the desired outcome. Self-managed organization models strip away much of the top-down hierarchical power, and favor process over structure to get the job done.
Compared to 6,000 years of bureaucracy, models like holacracy, teal, and adhocracy are still in their infancy. The next generation of self-managed teams will require leaders with the vision to recognize the limitations of hierarchy, and defend the structure that serves the organization’s strategic goals.
Question: What’s the best mashup of hierarchy and self-managed teams?
Driven by the premise that excellence is the result of aligning people, purpose and performance, Center for Executive Excellence facilitates training in leading self, leading teams and leading organizations. To learn more, subscribe to receive CEE News!