It is the year 2014, and while many organizations are still managing work the way they did in 1980, several are breaking the mold with new ways of leading and working. At a time when Gallup is reporting that only 13 percent of workers are engaged, it is time for change. Factors such as the equalizing impact of social media, advanced technology providing access to information anywhere, rising number of digital natives in the workplace, and increasing competition from start-ups and organizations across the globe are causing the perfect storm for reinventing work and leadership.
The Results-Only Work Environment (ROWE) challenges traditional management strategies. Jody Thompson, and Cali Ressler, co-creators of the ROWE, describe it as "a management strategy where employees are evaluated on performance, not presence." In a ROWE, workers can work wherever, whenever, and however they choose to, as long as they achieve their results.
Mabel's Labels, an award-winning organization that creates durable labels for the household, seasonal and children's items, became a ROWE in the spring of 2013. Mabel's Labels was started by four moms who recognized that they could work effectively while also being able to be present for their families. They realized that their staff could work successfully with the same autonomy. Julie Cole, co-founder of Mabel's Labels, says, "With strong leadership and clear goal setting it has been effective. Mabel's has always been an innovative company so it made sense to have an innovative plan like ROWE."
Zappos is also turning traditional management on its head. They announced at their All Hands meeting in November that they are becoming a Holacracy. Holacratic organizations are organized in circles. Workers are members of several circles depending on what they are working on at the time. Decision authority is distributed throughout the organization, with everyone focused on the core purpose and strategy.John Bunch, who is spearheading the Holacracy initiative at Zappos, explains why this move is important for Zappos.
Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15 percent. But when companies get bigger, innovation or productivity per employee generally goes down. So we're trying to figure out how to structure Zappos more like a city, and less like a bureaucratic corporation. In a city, people and businesses are self-organizing. We're trying to do the same thing by switching from a normal hierarchical structure to a system called Holacracy, which enables employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do.
Morning Star, a tomato processing and packing company, is a fully Self-Managed organization, and has been since the early 1990s. They operate with no hierarchy, no managers, and no command authority at all.
Doug Kirkpatrick, one of the pioneers of Self-Management, explains how it came to be. "The command-and-control management model, a relic of the Industrial Revolution, no longer harmonizes well with a world where information moves at the speed of light. Self-Management starts and ends with the premise that in order to achieve greater productivity and engagement, people should not employ force against others and should keep their commitments. Self-Management principles simply respect the way we already live our lives outside of work. In our personal lives, we make all kinds of crucial, life-changing decisions without a boss--where to go to college, who to marry, what to do for a living. If employees know what to do and how to do it, why do they need managers?
In his book, Beyond Empowerment: The Age of the Self-Managed Organization, Kirkpatrick explains how it works. One key element is the "Colleague Letter Of Understanding" (CLOU). This letter replaces traditional employment agreements and job descriptions. CLOUs outline the individual's responsibilities, key performance indicators, decision-making authority and purpose as related to the company's mission. Every individual writes his or her own CLOU, negotiates the contents with peers, and holds themselves accountable.
At Morning Star, Self-Management applies to highly educated scientists working with plant biology to the colleagues harvesting tomatoes in the field. Morning Star proves that it is not only knowledge workers who can be trusted to manage their work. They are the world's leading producer of tomatoes, and continue to thrive, with every colleague leading his or her part of the mission.
It is time to explore new ways of working, and as we do, it is important to consider the foundation of culture and strategy in the organization. For all of these innovative, agile forms of management to be successful, two core elements must be in place. First, you need a clear organizational purpose and strategy. People must understand where the organization is headed and why, as well as how they contribute to that strategy. Second, People must trust and be trusted in order for leaders to relinquish their power and individuals to lead themselves with integrity and authenticity. Zappos, famous for their value-driven culture and strong purpose of delivering happiness, is well positioned for a transition, since strong alignment to purpose will be critical for it to work. It will be interesting to watch them make the change and to see if it helps them continue to innovate.