We’re thrilled to introduce you to the winners of the Beyond Bureaucracy Challenge—the second phase of the HBR/McKinsey M-Prize for Management Innovation.
Managing Beyond the Organizational Hierarchy with Communities and Social Networks at Electronic Arts
From bureaucratic, divided, passive and exhausted to productive, creative, autonomous, and happy
If we create a graph that shows our life resources (time, money and health) we see that availability of time throughout life can be represented by a U-curve. Over that curve we can show financial resources, which looks like a bell curve. A declining vector across the graph represents health.
From looking at the chart, we can see a fundamental problem: we have money when we don't have time to spend it, and we have free time when we may feel less secure about money and have problems that limit our energy and activity levels.
Add in the conflicting demands of relationships, continuing education, and philosophical considerations (for example, Jungian concerns about essence and dealings with humankind) and we can quickly see how difficult it is to make organizational life rewarding for the people who make up the organization.
Sidebar: Semco’s “Are You Nuts?” meetings
Once a month, anyone in the company can join one of these 3-hour meetings. The goal is to expand the possibilities of change. From this forum, we have produced several programs, such as:
1. Who Needs Headquarters? We eliminated ours some 10 years ago and started 14 geographically distributed open offices around São Paulo, where people would come and go as needed, neutering the possibility of hiring or controlling people by time spent on work.
2. The Lost in Space program, where college graduates were invited to spend one year (anchored by a Mentor) doing odd jobs and connecting themselves to any areathey desired. At the end of the year, they could choose where they wanted to work. Sadly, this worked too well, and some 80% eventually took what they had learned and left the company -- a third to became CEO¹s or business owners within 5-8 years!
3. Flex-time on the Assembly Line. Factory workers set working hours amongst themselves, with little or no involvement from managers.
In the Retire-a-Little program, employees would buy back their Wednesdays. For 10% of their salary (which permits the company to hire more people) any employee who has been with the company at least two years may begin to buy back one day a week. They then begin to work Monday, Tuesday, Thursday and Friday; on Wednesday, they do what they hope to do when they retire. So, instead of climbing Mount Denali at 77, they do it at 29 or 42. Or they take up the violin (even if it is only to find that they don't have the talent for it). In any case, every Wednesday they dedicate themselves to that activity or hobby, or humanistic concern that only retirement would allow them to.
We chose Wednesday not to set up a strict rule—that's anathema to us—but to enable us to measure and test the approach and to deliberately set it apart from the weekend, so that employees could approach their endeavors with the same determined and industrious mindset they bring to work, rather than just turning it into a three-day weekend.
In exchange, they receive a coupon, which they can trade in once they retire, for two half days of work (say, Tuesday and Thursday mornings). This coupon is accepted by a collection of like-minded partnering companies, so that the individual has multiple choices and doesn't depend on one particular company's success in the long run. These coupons are redeemable at the face value of 10% of their time "purchases" before they retired, adjusted for inflation (that is, the value of the coupon corresponds to the total value of purchased days that is then amortized in two half days a week until it reaches zero).
Some of the specific of the "redemption" process would work as follows:
1. Redemption is optional--that is, if someone does not want to work additional days in retirement, he or she doesn't have to.
2. Participating companies would be obliged to redeem the coupons, but they would be protected by a ceiling on number of redemptions per year.
3. If there are more redemptions at a particular company than the company's limit for the year, other companies would offer opportunities to "cover" those redemptions. The group of participating companies, and individual limits on redeemable coupons would not easily affect the overall balance, given that the statistics of days to be redeemed would always be negligible to a pool of companies at any given time (see more on this in the next point). A second or third company would, therefore, be easily available.
4. The financial impact of redemptions on participating companies is likely to be small, and well offset by the gain in accumulated wisdom. There are several factors that would contain the long-term costs, including employees who move away or decide not to redeem their coupons. Even if a third of the employees decided to redeem their coupons, that would only add up to about 3% of working hours, distributed over two mornings a week - a number small enough for participating companies to handle without much trouble. Participants could also easily spread out the use of the coupons, using fewer per year to stretch out the work opportunity, making the redeemable numbers relatively small. On the other end, companies could easily contract for more hours from people who are proving very productive at 74, for instance.
* Individuals: greater satisfaction, longer productivity. Employees would become more devoted and happier as they see the organization is supporting them in pursuing activities they care about deeply. After retirement, they would continue to contribute to the organizations, bringing their accumulated wisdom gained over their careers. Continued productive lives well into retirement years.
* Organizations: committed staff, experienced advisers. Participating companies could expect greater engagement and productivity from their employees. As noted above, we would expect productivity to be about the same even at only 80% of time, given the employees' greater level of personal satisfaction and engagement. From retired employees, companies would gain a cadre of seasoned workers and professionals who would help younger employees take advantage of "institutional memory."
* Society: more people hired, more volunteers. As noted above, the funds that employees use to buy back their Wednesdays would be used to hire additional employees -- an eleventh employee for every ten who participate in the program. Meanwhile, every Wednesday society would see an influx of volunteers: productive people in their prime who are applying their energy and expertise to causes they feel passionately about.
First, debate the idea to exhaustion. Test the theory, do the math, have people list what they would actually do with the time (for themselves), and how they would handle deadlines and targets without the use of their Wednesday. As with so many of our "are you nuts" ideas, I could come up with all kinds of reasons to hesitate. But this experiment is chiefy designed to push boundaries and test the future today.
Second, set up a relatively simple experiment to test the first part for some time without any loss. Just sign up employees who are willing to pay 10% of their salary to buy back their Wednesdays, and say that the coupon can only be redeemed (until further notice, negotiations and understanding) by that one company, assuming it is still in business. This would allow people to get started with the program, under the assumption that the terms, as they stand in the present, might already be the full execution of the deal. The post-retirement guarantees could be worked out over time, but they are not completely necessary for everyone to benefit from the arrangement.
Finally, be prepared for surprises. We found that what people want to do when they retire is not as awe-inspiring as we thought it would be. We thought people might become scuba divers or mountain climbers or write epic poetry. What we found was that people are looking to retirement for an opportunity to catch up on great books they’d missed, enroll in online courses at universities, or pick up a new skill or instrument. That was true for the 20-year-olds as well as for the 60-year-olds. It turns out that people were already doing a lot of adventurous and radical things in terms of sports or travel or activities on their weekends or vacations, but the Wednesday retirement time was about bringing a degree of internal growth, insight, and personal development to their lives.