Especially when you read the fantastic book Reinventing Organisations by Frederic Laloux, there’s a really clever mistake you can make on the way to implementing self-management systems in your organisation.
We made that mistake, many years ago, and to some extent we’re still recovering from it. If you’re a current or future founder of a company that aspires to implement self-management, or even current or future leader of any sort of organisation or community which you think might lean towards self-management, this blog post is an attempt to help you avoid this pitfall.
To put it simply, the trap is that from a naive perspective, bosses, managers and leaders look like the same thing. Articles on the Harvard Business Review will even call you to fire all your managers in pursuit of self-management. Quite possibly, if you’re thinking about self-management for your organisation, you don’t like having to tell people what to do, for any number of reasons.
It could be that you just don’t have the time, and so you want the community to organise itself. Or it could be that you are sensitive to the negative impact that ordering people about has on their aliveness, and you don’t want to have that sort of effect on them. Or it could be that you are convinced that self-managing organisations full of creative, empowered people who can make their own decisions are more successful than those that are just taking orders from the top.
Whichever one of these (or many other) reasons you may be enticed by, the next natural move is to refuse to order people around, and to deliberately remove structures that would allow others to do this. That’s what we did – first disconnecting “directors” from “their” teams, and then eventually getting rid of the concept of directors altogether. Unfortunately, what we discovered when we did that was that people still wanted some kind of direction (which we interpreted as people wanting bosses – which we didn’t want to provide), and so in order to deal with that we encouraged people to see management as unnecessary.
This became a serious problem as the company grew and started to really need management in order to operate and grow. And it became even more of a problem as we realised how important the “leadership” piece that we threw out with bosses was to the long-term success of a company.
I can’t claim we’re fully out of that trap yet, but at least we’ve become aware enough to be working actively to get out of it. Maybe you can avoid getting into it at all!
A good starting point is to have a clear definition of these three key terms, and, with that, a way to be clear with yourself and others what you are encouraging or discouraging.
Bosses, Managers, Leaders
A boss is someone who tells you what to do. Line managers are often bosses. Basically, a boss is anyone who might have the power to make you do stuff coercively. A bad boss might say “You need to do this, because I’m your boss (and, implied, if you don’t do it, I will fire you)”. Bosses are in charge of people, direct reports whose performance they evaluate and are often responsible for. They often also get credit for the work of their underlings.
A manager is someone who is in charge of organising and tracking work and processes, making it more efficient or more transparent or more collaborative. They might direct people or other resources to where they can be most efficient, and they might be responsible for optimising processes to maximise performance, but there is no inherent responsibility for other people’s work in management. A Finance Director working by themselves is definitely a manager – they’re responsible for a complex, high-impact area of work – but they’re not a boss.
Finally, a leader is probably the hardest to define. Leadership as a term has so many meanings to different people. I’ll shamelessly steal from this article and declare that a leader is someone who uses their influence to maximise the efforts of others towards an objective. And I will add that in a startup environment, leadership often includes figuring out what the objective should be.
Which of these are valuable to you obviously depends on your situation. If you are building Genghis Khan’s army, which was ruled by fear (for example, if a single person in a group of ten ran away from the battle, the entire group of 10 was executed), then iron-fisted bosses is exactly what you need. You might also need some managers and leaders, but very few, and concentrated near the top or in charge of large army units.
Most of us aren’t building an army of genocidal maniacs, so perhaps we need a different mix of these three. Sadly, so many companies are in fact organised around this (outdated) army metaphor, as if the only way that people will do any work is if they’re forced to under threat of some kind of violence (like being fired). But perhaps the way you want to run your company is deeply hierarchical. That’s your choice if so, but even then you will want to tell the difference between bosses, managers and leaders, because they require very different skill sets and have different purposes.
Bosses and self-management
My belief is that bosses are unnecessary in a self-managing company. There is never really a good case for someone having the power to say “do this or else you’re fired” of their own volition. Any company needs to be able to fire people in some circumstance, of course, but that process should never just be one person making a decision without any sort of formality beyond letting the victim know their fate.
Bosses also often derive their power from secrecy: your boss knows how much you’re paid, but you don’t know how much they’re paid. This access to information gives them more power to make you do things by claiming to have a fuller picture. Transparency and self-management go hand in hand, and I believe that’s another reason why the “boss” idea falls down in self-management.
At GrantTree, there is no one who can tell someone else “you have to do this” or “you cannot do this”. There are processes, via Holacracy, to restrict certain activities or to request that certain roles take on certain actions. But those processes are open to all, and the power to impact those Holacracy artefacts (called Domains and Policies) is not derived from one’s position in a people hierarchy.
In short, I don’t currently think there is any need for bosses in self-management.
Management in self-management
I would argue that for most companies operating in this century, beyond a certain scale, management is absolutely essential. If no one has the job of organising the work, the result is pretty simple: the work remains disorganised and inefficient. Moreover, if no one is measuring this inefficiency, you won’t even know about it! All that tells you that there’s a problem is that the bottom line seems… expensive.
Now, in an ideal world, people in a self-managing organisation would do this management work themselves. And to an extent, that is possible. But that self-management work emerges out of cleverly designed and effective structures that support people in measuring and managing and organising. A system like Holacracy, for example, will help people to participate in organising the work via its governance process.
That stuff does not just happen, though – it is put in place, probably by someone who is doing the work (well or badly) at the moment and so is conscious that it is worth doing and needs to have time allocated to it. It does not emerge naturally out of people who are busy doing the work, because they are busy with the day-to-day activities of the business, and often (especially if the work is badly organised), they don’t have the time to pause their work to reorganise processes.
Leadership in self-management
I hope it’s also obvious that at all stages of a business’s life, leadership is critically needed. At the very earliest stage, leadership is the most essential activity of the company: figuring out what to do so there is a company instead of just an idea. But even much later in the business, at all levels of the organisation, leadership is needed to help transform information and awareness (about the market conditions or even just the situation inside the company) into goals and actions to support those goals.
My experience is that as a founder of a company that I wanted to be self-managing, I have often felt hesitant to be decisive in my leadership, and a frequent reason for that was that I wanted to give room to others to make decisions and be leaders themselves. Ironically, I think this also doesn’t work. The best way to lead, after all, is by example. So if I want everyone else to be leaders, it turns out I have to embrace leadership myself, rather than wait for others to step up to my imagined ideals.
It’s a kind of paradox, isn’t it? To encourage others to be leaders, you need to act as a leader yourself, which often includes making decisions instead of waiting and “holding space” for others to make decisions.
The right mix
As I hope is obvious by now, whilst bosses might be undesirable in a self-management environment, managers and leaders are very different beasts and in great demand.
There’s a whole other topic to discuss about how we can actually handle these topics in a self-management context, so as to get the most out of both management and leadership, but this begins by noticing that there’s a difference between these three types of work, and making sure we don’t throw out the baby with the bathwater in our drive towards open culture.
If you are curious about R&D Tax Credits, Innovation Grants and Open CultureGET IN TOUCH
GrantTree launches Project Redwood, a new podcast about R&D, technology and innovation. It's here! Introducing Project Redwood, our new podcast series all about the technologies and innovations that shape our…
HMRC allows you to apply for R&D Tax Credits up to two years after the end of the accounting period in which your R&D took place. You can do this…
One of the challenges of a system like Holacracy (the “Operation System” or “OS” for running companies) is that the knowledge of how to use it well cannot be instantly…
The £50 note is getting a makeover. Our largest denomination will be reprinted on the glossy, washing-machine-resistant polymer used for £5 and £10. It's also getting a brand new figurehead,…