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polly-labarre's picture

When nobody (and everybody) is the boss

As a reverse fairy tale for the CEO set, the reality television program Undercover Boss is fascinating, not so much in the witness-to-a-train- wreck mode of the rest of the genre, but because it is so revealing of our conflicted relationship with "the boss."

The premise of the show—that the only way to get a clue about what's really going on in his (or her) organization, is for the boss to go undercover on the front lines—is all too often the actual reality in organizations of any size. Yet, at the same time, the view of the boss as the ultimate authority with the heroic power to swoop in and save the day—whether that means paying down a mortgage, granting an instant promotion, or banishing a reviled policy—holds sway in real life as well as on "reality" TV.

Few figures are simultaneously as reviled and revered as "the boss." The problem isn't with the people who fill the role (that's another story), but the role itself. The "modern" organization was founded on the principle of control—a central authority sets direction, corrals information, curtails decision-making power, and punishes deviations from the norm.

That might have worked in a world in which standardization, predictability, conformity, and discipline were enough to mass produce profits. But it doesn't work in a world of constant change, competition from everyone and everywhere, and commoditized knowledge. And it certainly doesn't work in a world in which there is so much hunger for greater humanity, freedom, voice, and meaning.

We've reached a real inflection point when it comes to how we organize human effort. The most inspiring organizations today are actively experimenting with what gets people out of bed in the morning—and what fires up their imagination, initiative, and passion. And the best bosses understand that their power comes not from maintaining control, but from devising ways to unleash more freedom, creativity, and contribution.

Of course, the ideology of control is deeply embedded in our organizations. Chiseling around the edges won't lead to meaningful change. Which is why it's so instructive to learn from organizations that have exploded the traditional hierarchy—and learned to rule without bosses and manage without managers. These long-running experiments in organizational democracy and radical autonomy may have been "born this way," but they offer up a set of insights and approaches for rethinking and redistributing the work of leadership for any organization.

Put Peers Before Bosses

Morning Star is the world's largest tomato processor—and probably one of the most remarkable models of managing without managers in the world. The central California company was founded by Chris Rufer in 1970 with a distinct point of view around how to organize and inspire individual talents and efforts for maximum productivity and happiness. According to Paul Green, Jr., who runs Morning Star's training and development, that philosophy assumes: "people are happiest when they have personal control over their lives; that the best human organizations are those in which people aren't managed by others, but in which participants coordinate among themselves, managing their own relationships and commitments to others."

Today, Morning Star is a complex, capital-intensive $700 million business with double-digit growth over twenty years (in an industry with an annual growth rate hovering around 1%)—and a collection of 400 colleagues without bosses, titles or job descriptions, who determine their own roles and responsibilities, negotiate their commitments peer to peer, and make their own decisions about who to hire and how to spend the company's money.

If that sounds like chaos, at the center of the company's design for work is a mechanism that produces a dynamic sort of order. It's called the "Colleague Letter of Understanding" (or CLOU, pronounced "clew"), a contract in which each individual defines his or her personal mission (and how it relates to the organizational mission), work commitments, key activities, and success metrics—all negotiated with ten or twelve core colleagues (called CLOU colleagues). The CLOUs are available online to everyone in the company, they can be updated at will, and are embedded in a social network that includes a real-time feed of real-time performance data, CLOU colleague activities, and peer feedback.

The result is a live map of the enterprise—a dynamic network of peer-defined interdependencies that define the org chart (rather than the other way around). Instead of hewing uncomfortably to a rigid, top-down hierarchy, the CLOU system allows Morning Star's colleagues to operate in a "natural" hierarchy based on expertise, achievements, and accountability. People don't move "up" at Morning Star, they grow in respect and responsibility (and compensation) based on their contribution.

Likewise, ideas aren't taken up the chain of command, they travel out to the relevant colleagues. In this system, where nobody (and everybody) is the boss, strong peer relationships make for a stronger organization. As Green reports, the clear commitments and systems of follow-through among peers increases individual initiative, enables the organization to respond to changes in the environment quickly, and inspires a high level of loyalty, collegiality and engagement.

Humanize and Human-Size the Organization

Strong peer relationships may trump layers of management, job titles, and job descriptions, but can they scale? That's a question W.L. Gore has wrestled with for decades. The 53-year-old maker of Gore-Tex high performance fabrics and some thousand other products—from Elixir guitar strings to Glide dental floss—employs 9,500 people in some fifty locations and is consistently ranked one of the best places to work and among the most innovative companies in the world.

Like Morning Star, it was founded on a very different idea of what a company could be. Gore has no formal hierarchy, no bosses, few job titles, and offers associates (everyone is an owner) autonomy in choosing their work and negotiating roles within teams. And like Morning Star, peer relationships and commitments are the bedrock of the operation. To avoid diluting those crucial relationships, Gore famously caps the population of any given facility at around 200 people—the size where, founder Bill Gore observed, "we decided" becomes "they decided." The emphasis at every turn is on direct, personal communication. The negotiation of roles is often laborious and time-consuming but pays dividends in terms of engagement and aligning the right capabilities against the right challenges.

Another multi-decade experiment in organizational democracy, Whole Foods Market has maintained human scale even as it has grown to 62,000 team members and 310 stores around the world and $10.5 billion in sales by making all work teamwork. Every store is made up of a dozen or so self-managed teams, each store is a team, and the leadership of the company forms a team where all decisions are made by majority vote. Each team has extensive control over budget, policies, and local innovation—and rewards are based on team performance. As Whole Foods founder and chairman John Mackey puts it, "humans flourish best when they are in small groupings of people they know well and who they come to love and trust."

And that's the key. Humanizing the organization isn't just about size—it's about creating a culture of trust, intimacy, and informality. The best way to do that is to keep everyone on the same page—literally. Whole Foods, Morning Star, and W.L. Gore all open up an unprecedented amount of information, financial data, and strategic decisions to people across the organization. Morning Star produces a detailed financial report every two weeks for all to view. Whole Foods even shares salary information (of executives or peers) to any team member who requests it. Mackey calls it "no secrets" management. While so many organizations separate and disenfranchise people by parsing out information on a "need to know basis," these companies align and energize people by sharing it on a default basis.

Give Everybody a Vote

Although "boss" is "the B-word" at W.L. Gore, the company still has a president and CEO—but one who came into her job very differently than most. A Gore lifer, Kelly was chosen by popular vote. Her associates were asked who they thought was the best person to lead the company (no short list of candidates was supplied), and much to Kelly's surprise, she was chosen by her peers. Peer review is an established ritual inside Gore—a forced ranking of each associate's 20-30 closest colleagues' contribution to the company's success determines compensation. At Morning Star, compensation is a product of an individual's self-assessment and the evaluation of a peer-elected compensation committee.

Whole Foods offers the right to vote to local teams when it comes to hiring. New hires serve for a period of one to three months on a team, after which the team approves (or rejects) the candidate as a permanent team member by two-thirds vote. It turns out that peers are much better at predicting who will be a great teammate or leader than any executive committee.

And it turns out that when you distribute the work of leadership to a cohort of engaged and empowered peers, you create a rich social fabric that is infinitely more resilient than a rigid hierarchy with reinforced corner offices.

Dear Readers: Have we reached the limits of leadership? Are the days of the big boss over? Can we manage without managers? Do you have a story to share about the redistribution of leadership? Tell us what you think here in the comments.

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debbie-nicol's picture

Great article Polly! I have to say though I wonder if it really isn't about the people in the role, 'maximizing' the 'control' you identified. If the control was there, how would it in effect 'have control' without a person drawing from it?

This to me opens up a whole new can of worms - about the leader himself. Is he or she disconnected from self, so therefore needs to draw from an external source to give 'power' vs simply being so connected to himself that all other connection simply flows, people with leader, people with org, leader with org etc. Internal validation, self trust, intuition are certainly 21st century skillets of leadership and most certainly eradicate any need for either the leader or the people to be undercover!

Great provocations here!
deb

julian-wilson's picture

This really resonates with the work of Gerard Fairtlough who coined the phrase “responsible autonomy”.

Yep, we do this sort of thing in our little business, and it works great.

We even took a conventional business and changed it.
It took years and it was costly.

If we did it again- we would not transition a conventional business, but instead pilot the new model and take all the very low margin work out of the original business. Without the costs associated with management and admin (wages and space), businesses based on responsible autonomy have much lower overheads and can extract margins where conventional businesses struggle.

Much of the cost of transition was the cost of changing people’s mind (training etc).

In the long run many of those people chose to leave and join hierarchical businesses as they felt more comfortable there.
We got a benefit in the culture and that shaped new recruits who were more responsible, but ultimately it was not an effective use of our money.
We would have been better to recruit people who were more responsible and put them in a separate environment where high responsibility was the norm.

There is a fundamental problem to overcome and that is -a corporation puts capital at risk and employs capital in its activities- in materials, equipment, wages etc.- the challenge is that no role in the organization actually has any personal responsibility for this capital. There is no legal recourse.

There are shareholders, but they have no legal recourse against those who employ their capital irresponsibly- they are really just bagholders.
This is the reason that leadership is considered essential- it’s the easiest option-shareholders just go with leaders who have a proven track record of being responsible for the capital put at their disposal.

Responsible autonomy is better, it has challenges but they are resolvable, whereas hierarchy has insolvable problems. There must be mechanisms in place to prove that each individual is being responsible with the capital put at their disposal. This is essential.

carlos-largacha-martinez's picture

Polly
Music to my ears!!!!
Gracias,
Carlos

grant-lichtman's picture
Thanks for this post, Polly.  I am forwarding to members of our school leadership and will summarize on my blog http://learningpond.wordpress.com.  Schools are a fascinating example of an organization that is both highly democratic (no one wants to piss off the faculty) yet strongly hierarchical with rigid layers of vertical authority.  I actually think it may be a place where the CLOU would really work, since most teachers think their principals and headmasters are far removed from the real world of their work.
 
What I have been working on, and this conversation is increasing dramatically at private schools along with rising tuition prices, is getting organizations to evolve around a shared value proposition, which demands that each employee understands and is willing to articulate their contributions and responsibilities...a lot like in a CLOU.  So I may try this out with some of the schools I am working with.
chris-murumets's picture
Polly, this was a great read.  We have been striving to implement something similar and I did think we were coming up with something unusual with our org design.  It is encouraging to know we are just trying to implement something that many others have done succesfully.  
sean-lyons's picture
Polly,

This is a great read and a very interesting approach.

I for one think that progressive organizations need to embrace the requirement for both top-down and bottom-up contributions and responsibilities. A more transparent organization can help to foster trust and accountability however I believe that varying degrees of oversight are required both inside and outside the organization in order to help safeguard broader stakeholder interests.

The recent financial crisis however has clearly highlighted the dangers of peer pressure and how unleashing too much freedom and creativity within certain sectors can have a profoundly negative impact on society in general. This crisis exposed oversight weakenesses in the conventional model and stakeholders are now demanding higher standards from all parties concerned. I believe these higher standards will require all stakeholders to play their part both individually and collectivley in order to help improve corporate oversight and to hold individuals and organizations accountable for their duties and responsibilities to their stakeholders.

I have attached a link to a recent paper of mine entitled "Corporate Oversight and Stakeholder Lines of Defense" which may be of interest.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1938360

This paper outlines the stakeholder lines of defense which exist both inside and external to the organization. It also outlines oversight expectations in this regard. 

I personally am not quite sure how the "When nobody (and everybody) is the Boss" approach would ensure that stakeholder expectations are addressed and whether such an approach would be successful in all organizations and sectors. I fear that it may be open to electioneering by politically minded individuals and the dangers I would associate with such a system.

It is certainly food for thought. 

     

bruce-stevens's picture
This was a really interesting post, thanks Polly!
 
olivier-compagne's picture
Thanks for this article, it's fascinating to see companies experimenting. Such a fertile ground. I work with HolacracyOne, a young consulting company where we reflect and experiment a lot on organizational and management issues. Many of us resonate strongly with the principles behind several practices you mention here.
 
Morning Star's story is interesting. Although they got rid of "the leader" role, they found a creative way to create, collectively, what the leader provides in conventional organizations: structure and coherence. It's fundamental and I assume it's key to their success. And at the same time, their dynamic structure allows for organizational agility, they can reorganize quickly.
 
To me the million dollar question is: How can we cultivate a dynamic structure over time, while keeping coherence of the whole and autonomy of the parts?
 
Some believe it requires "enlightened leaders", but I don't. While they're certainly way better than conventional ones, Morning Star shows that they are not fundamentally necessary. That's our experience too, at HolacracyOne. Leadership is necessary, not leaders.
 
There is no way one person can process all the data to make decisions about all aspects of the organizational structure (think burn out, depression, ...). Autonomy and distributed authority throughout the organization are key, but there is a fundamental contradiction in leaders trying to personally bring that forth.
 
Morning Star's peer-negotiated "CLOU" is an insightful way of grounding mutual expectations (i.e., roles and accountabilities) into a systematized structure. From implicit to explicit. Based on our experience at HolacracyOne, I wonder: What is the agreed upon process to negotiate the CLOUs? Maybe more importantly, who decides that? In other words, what, or who, has the authority to define "the way CLOUs are negotiated"? There is tremendous power here.
 
From what I understand based on Gary Hamel's own account in HBR, the implicit process is consensus based. It has the inconvenience of being heavy (from 3 to 10 hours per person) and - since it's relationships based - to invite politics. 
 
The key elements that we have found to counter these issues are:
  1. to have a clear process to define roles and accoutabilities (a "governance process"), avoiding both the "tyranny of consensus" and the autocracy of a single leader. 
  2. Differentiating between individuals and roles of the organization. From there, we collectively define the accountabilities for the roles, but the roles are assigned to individuals by one specific role whose accountability it is to do that.
 
We have good results with it (of course, we're eating our own dog food), and we are constantly evolving the system. It's an area we are obviously very focused on, and are very happy to exchange with like-minded folks.

jamie-notter's picture
I absolutely agree, and you're saying many of the same things Maddie Grant write about in Humanize: How People-Centric Organizations Succeed in a Social World. We cite W.L. Gore and Whole Foods examples as well (I wish I had known about MorningStar last year!). But I will say that I don't think the boss-centric approach is going to disappear. There are still tons of people who accept as fact that everything comes from the boss and that's the way it is. And organizations with those cultures will stil be profitable, at least for a good while. 
 
But now is the time to leap to the next S curve.
ashot-arzumanyan's picture
I think that in essence "boss/no boss" problem is about effective leadership and delegation. I believe an organization cannot be effective without profound leaders, and while leaders delegate tasks, profound leaders delegate challenges...
richard-scott-will-harknett's picture
I love the article Polly, but have you come across Holacracy (see www.holacracy.org)? Under this system these behaviours are the norm. There are a growing number of organisations transitioning to the Holacracy framework in the US as well as in Eurpoe (especially in France, Belgium and Germany) and in New Zealand, where I am based. 
mark-addleson's picture

Polly

Right on!  Here is why I love this blog. My book Beyond Management: Taking Charge at Work, published recently, is about the work we do.  As knowledge-work is deeply human work, both collective and creative, we certainly need workplaces that foster 'humanity, freedom, voice, and meaning'.  But the case for doing away with bosses - 'going topless' - is much bigger.  It's about doing good work too.

In the book I take a close look at knowledge-work from 'inside.'  With a view from practice we discover that knowledge workers spend most of their time organizing.  As they engage, share knowledge, and make meaning together (by email, on the phone, in the elevator…), they create their own work.  To do this well they need to be agile, to network and collaborate.  High-control systems, structures, and rules, as well as competition, are all disorganizing and get in their way.  They must organize themselves.

'Going topless' means flying in the face of conventional wisdom.  It is profoundly political.  It is uplifting to read of the companies doing this and succeeding.   But it can't be all top down.  That is as contradictory as it is unrealistic.  So, one of the things I do in the book is offer advice on where activists - people at all levels who up for the challenge - can begin taking charge.

sally-ourieff's picture
I have read about each of these companies many times but each time it is inspiring to see how well collective leadership is able to work.  With a background in psychiatry, and now an advisor and consultant on leading in the digital age, I find that the challenge is getting individuals to re-frame their understanding of power, communication, connection, and reward.  I too have been developing frameworks to help traditional leaders take a high altitude look at their organization, their definition of leadership, and their understanding of human nature.  Once they can "see" from there, it becomes easier to help them develop the emotional and social intelligence, interpersonal and communication skills, self-awareness and mastery, and relationship building that is needed to engage all stakeholders in new ways.  The power of "social" comes from how much more successfully it acknowledges and aligns with what matters most.  
 
blanche-hill's picture
Hello,
Reading this reminds me of this what I read in Meister and Willyerd's book, The 2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow's Employees Today. The authors provide a futuristic narrative in which new corporate employees elect their immediate bosses based on pitches given online. I wonder if their prediction will come true, especially since peers are already choosing their leaders in the organizations that you mention. Maybe these practices will become more widespread.
thomas-simon's picture
Ah - Polly I have been working on this issue for a long time  - decades  - have tried to build a technology platform around the behavioural dynamics of virtual teams  - how dispersed teams are built - and get work done. It is working.  :-) Have some very large organizations in pilot stage. Would love to connect to show you. 

Love the Carlos Castaneda bit in your bio  - totally get that!