Can you imagine a company where all of its employees (and not only a select few) are empowered to make important decisions that affect their work? Where anyone can not only make suggestions about what will work better for the customers, but also create and lead teams to implement solutions to problems raised.
For the hundreds of thousands of employees worldwide working for companies who have adopted self-directed management structures, this is how they work every day.
Recently, Zappos CEO Tony Hsieh made the news for switching that company to a self-management structure called Holocracy, where everyone operates in “circles” and there are no internal titles of “Manager”, however more experienced employees are given a mentorship role to fulfill within the company.
Journalists far and wide have tried to make sense of it – the common thread being “without managers, everything will be chaos!” As usual with these things, though, everything old is new again.
In reality, you probably know someone who works in this type of system. You may have even worked in one yourself. In fact, roughly 10% of organizations worldwide have adopted some form of self-management.
For nearly 25 years, corporate giant 3M has been one of multiple enterprise organizations employing self-directed work teams which they call “Pods”. They have been shown to be 30% to 50% more effective than their traditional counterparts.
The benefits of utilizing a “pod” system, according to 3M’s more senior employees, are numerous. In addition to offering obvious corporate benefits such as greater flexibility, reduced operating costs, improved quality, productivity and service, they offer cultural benefits as well.
For example, with the pod structure, there are simpler job classifications. Employees tend to feel more valued for their individual contribution, which increases their commitment to the overall organization. The company is able to communicate their goals, and the employees are able to act on them without feeling hampered by the bureaucracy of management above them.
Other companies such as Xerox, Federal Express, Johnson & Johnson, Procter and Gamble and AT&T have credited their self-directed teams for increasing customer service quality, cutting service mistakes, achieving multi-million dollar inventory reductions, increasing production gains and reducing staffing needs while increasing efficiency. By simply giving their existing employees the ability to make the changes they saw were most needed, their companies were able to become successful.
One reason for that is in the cross-functional nature of these teams. In each pod, or circle, no one person holds all of the responsibility for a project. If someone is unable to contribute fully, then it will be addressed quickly. And, in the case of a “missing man”, the team is still able to function without any downtime.
If these teams are more successful, does that mean it is right for everyone?
There are some elements of self-management that can work in any organization, however a complete shift like 3M and Zappos have done does lend itself better to certain industries. Personally, I have seen this type of structure work beautifully in the airline and tech industries.
It comes down to being in a company with a strong vision that is clearly communicated so when employees act, they know their company is behind them.
And really, that’s all that matters anyway.