An increasing number of organisations, big and small, are introducing self-managed teams which are genuinely empowered to make decisions without having to refer up the management chain all the time. So if these teams are really self-managed then it’s obvious that there is no need for managers to take responsibility for running them.
Does this therefore mean a complete clearing out of layers of middle management or is there still a need for some guidance coming from outside the team? We can learn a lot from current successful examples of organisations that have gone down this route and also from some who have tried and failed.
Yes, it is possible to take out layers of middle managers by delegating responsivities to their teams, but only as part of a major change in corporate culture supported by new behaviour from senior management. The successful examples of self-managed teams involve a leadership style that trusts the people delivering the product to do it their way and doesn’t tell them how to get the job done.
Conventional leadership assumes that the wisdom in the organisation resides at the top and the people below take instruction from their managers. Power can be delegated if leaders choose to delegate and loosen their grip. The self-managed organisation recognises that the wisdom lies in the people closest to the customer or those delivering the product on a day-to-day process.
Many organisations have tried to implement new ways of working by changing structures, or introducing new teamworking schemes but without changing the management mindset. These typically have failed. Because one new structure (eg Holocracy) works in one company it doesn’t mean it will work in another. It has to be accompanied by a change in attitude and behaviour from senior leaders who are prepared to ‘let go’ and trust their people to deliver results.
So, just clearing out layers of middle management without a fundamental change in the distribution of power in the structure will not be a great success. There are many examples of self-management which have started in small organisations and continued as the workforce grew. The company culture has been set at the outset, usually by an enlightened CEO, and has continued on as the organisation grew.
There is one, well documented, example of a large organisation successfully reducing the cohort of middle management and implementing a model of micro-enterprises instead. That is the Chinese white goods manufacturer Haier. In 2012 Haier effectively eliminated 12,000 middle manager roles and transformed the company’s original pyramid into a flat structure. From Haier’s 80,000 employees, those with entrepreneurial willingness and capability were screened to form more than 4,000 autonomously operating micro-enterprises (MEs). The former middle managers had two choices: either seek opportunities elsewhere or become entrepreneurs within the Haier system, becoming ME owners or core members, serving as resource providers for the MEs.
This worked because Zhang Ruimin, then the CEO, had a clear philosophy called RenDanHeYi. This Mandarin word is a compelling distillation of what is important in organisations. In RenDanHeYi Ren refers to the value of employees, Dan refers to the value of users, and HeYi means that the value of employees is realized through the value they create for users. The fusing of the creativity of employees and the needs of users lies at the heart of RenDanHeYi. In the language of Haier, the objective must be to continually insist on Zero Distance between employees and users, to continuously iterate and upgrade that relationship.
This is now being developed into “Theory R”, the subject of a new book written by Zhang Ruimin and Stuart Crainer. But like all the other management theories you can’t simply graft a new idea on an existing embedded culture. It involves a change in culture which has to come from the top, supported by leaders who truly believe in redistribution of power.
As Stuart Crainer says “Theory R and classical approaches differ radically in their development philosophies. We cannot comprehend Theory R through the lens of classical thinking, just as we cannot understand mobile phones through the logic of landlines. They represent two fundamentally distinct concepts.
Theory R is people centric, seeking the appreciation of human value—and that necessarily depends on human awakening or, more precisely, on self-enlightenment. By dismantling bureaucracy, Theory R enables every individual to move from being a mere executor to being a self-driven entrepreneur—an act of self-enlightenment.”
