Let’s Fire All The Managers!

Are Managers Necessary?

I’m taking my title from an article written by Gary Hamel in the December, 2011 edition of The Harvard Business Review. In the article, Hamel reports on the practices of Morning Star, a tomato processing company founded in 1970 with 400 employees and over $700 million in annual revenue. You’ve likely used the company’s products since they handle around 30% of the tomatoes processed in the US each year. In an industry that has grown by about 1% in the past 20 years, Morning  Star’s revenues have consistently been in double digits.

However, what sets Morning Star apart from so many companies, in and outside its industry, is the fact that it has no managers. In fact, the company is a pioneer in unusual practices:

  • No one has a boss
  • There are no titles nor promotions
  • Employees negotiate responsibilities with their peers
  • Everyone has the authority to spend the companies money
  • Each person is responsible to acquire the tools needed to do his/her work
  • Compensation is determined by peers

I recall my first work experience as an intern at an innovative Proctor & Gamble manufacturing plant. The company was one of the first to implement high performance work systems. One of their innovations was self-directed work teams, an uncommon practice for its day. I was impressed that some of the manufacturing teams were leaderless. The teams had evolved to such a high degree that team members took responsibility for all aspects of their production. A supervisor looking over their shoulders, making decisions and directing their work added no value.

But a whole company?

The notion is virtually inconceivable to the employees (and certainly managers) of most corporations.  Perhaps, one might reason, it is possible when work is simple and stable and employees hand-selected for their social and emotional maturity. But it’s hard to imagine a company without leaders given the complexity of coordinating hundreds of disparate contributions into a single product.

The fact that Morning Star (and other notable companies such as W.L. Gore and Associates) have accomplished this turns some of the tenets  of scientific management, as espoused by such thinkers as Max Weber and Frederick Taylor, upside down. It challenges our assumptions about the nature of work as well as people who do that work. Perhaps people truly want to succeed, to make a contribution to the business. Perhaps they are capable of figuring out not only what needs to be done but how to coordinate with others to accomplish a complex set of tasks.

Morning  Star does a couple of things to get the best from their people. First, every person writes a personal mission statement that outlines how he/she will contribute to the company’s mission of “producing tomato products and services which consistently achieve the quality and service expectations of our customers.”  Then people are expected to be responsible for accomplishing their mission and acquiring the resources and cooperation to do so. Finally, employees negotiate agreements (letters of understanding, like SLAs) with their co-workers most affected by their work. In essence, these agreements become an operating plan that describes how one will accomplish his/her mission as well as the metrics by which he/she will be held accountable by these peers. Not a quick or easy process but one which assures that people add value and coordinate with others to the accomplishment of organizational goals.

Although there are other tenets that make up the Morning Star’s operational success, these agreements take the place of hierarchical structure. People, at the point of a decision, have the fluidity and authority to do what needs to be done to accomplish an outcome rather than relying on someone from above directing their activity. Organizing in this way results in a host of advantages: lower costs, more cooperation, better decisions, increased flexibility, and higher loyalty.

Of course, it also brings certain disadvantages and challenges: tougher adjustment for some, longer induction, harder to hold people accountable, inability to acquire other companies (with a different culture), and so on.

I am not suggesting that the Morning Star model is right for everyone. However, it does teach us a lot about the principles of self-management, which likely can be incorporated into many companies today. At its heart is the notion that people are intelligent and capable. They want to contribute and can do so as we remove barriers and design organizational structures and systems in ways that allow them the flexibility and authority to work up to their potential.

 

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  1. […] are either reducing the number of managers or even eliminating them entirely. (See my blog post “Let’s Fire All the Managers.”) I’m not suggesting you get rid of all your managers. I am suggesting that you strengthen the […]

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