Don’t confuse enterprises without managers with without management

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Summary : we talk a lot about the cases of enterprises without managers, praised for their agility and their effectiveness. Businesses show interest for this kind of model and, as the same time, are scared by it. Some even make fun of such an idea because anyone with common sense knows that no business could work without managers. That’s were the confusion lies : no managers does not mean no management. A whole part of manager’s role, in today’s economy, is better done in a distributed than in a centralized way. To work, it needs leadership. And leadership works better when assumed by people who don’t have to assume the hierarchical authority at the same time.
It’s obvious that the key of some businesses’ sucess, form an operational efficiency standpoint, is not the use of the last technology to communicate and collaborate but management and organization principles. And, despite what lots of people may think, these principles car work in businesses of any size.

What scares about these businesses is that they are often tagged “enterprises without managers”. In the straight line of Hamel’s post on “fire all the managers”, How is it possible to run a business without managers ? It’s not that hard if one’s avoid a common misunderstanding that supposes that a business without managers is a business without management. In fact it’s all the opposite : these businesses are more managed than others.

Let’s start with a common objection : businesses need to be managed. Organizations like Semco or Morning star are managed…and quite will. Everybody knows who’s the boss, what’s the party line. They define a global framework, a strategy and allow means. The role of managers is to make it work. To make others successful.

That’s a point that often comes in the discussions about the future of middle management. Middle managers will be rather connectors, someone that put skills together. He will connect those who have something to do and those who have the expertise, the experience to do it as well as possible, to solve problems and handle exceptions. This kind of job can be “un-intermediarized” provided everyone knows that he’s concerned by the success of others and that networking is a cornerstone of the enterprise management principles.

Such systems that make people very accountable do not make management disappear. They only make it distributed. What leads to a paradoxical situation ; management is much more present in these companies that in those where it’s in the hand of a couple of designated people.

But this is not the only role of managers. They also have to gather energies, make employees more engaged… What is not about management but leadership. And who said these companies where leaderless ? It’s all the contrary : when management is in the hand of some designated people, it’s better that these people are good leaders. The fact management is distributed does not mean leaders are not needed anymore. Moreover lots of leaders are more comfortable when they don’t have to assume the hierarchical authority that makes their message sometime dual and less engaging. Distributed management helps leader to lead better and makes it more easy for new leaders to emerge because of recognition by their peers and not because of appointment.

But a question remains : what’s the interest of such a system ? After all, businesses have been living without for decades. I think it’s due to major changes in economy and on markets. Whatever their industry is, businesses are moving toward models that mix knowledge and services and need new ways of operating. Anything that could be automated and put under strict control has been. Knowledge and service models make organizations become machine that generates and deals with unforeseen events and these events are not anymore the consequence of a system failure but the reason why the system exists. Employees need to make decisions in a very short time (even instant decisions since production and consumption often happen at the same time), problems need to be handled as close as possible to where they happen and customers become more and more a part of the production system, bringing a new external variable in business processes.

In such a context, managers sitting at the top of a pyramid are becoming the bottlenecks of the systems. They don’t make things more fluid anymore but slow things down. Since their role is not about planning and controlling mass execution when unforeseen events have no room and everyone repeats the same tasks but about working on specific issues, person by person, their job may be better done by distribution than by centralization. So their role is moving to leadership.

So we can design organizations without managers but not without management. Moreover, manager is even more present and perceptible that it’s distributed rather than centralized.

But it raises some questions :

– is it desirable ? From an effectiveness standpoint : yes.

– is it desired ? Not that much. Managers fears it…and employees don’t all feel comfortable with such models

– can it work everywhere ? Yes (or nearly).

– can it work with anybody ? Natively…no. It’s a little bit more likely to work if a couple of things are done to favor it… What will be the subject of a future post.