Can we have companies without managers, including top management? Sounds unthinkable. But one such company, Morning Star, is the subject of a cover story by Gary Hamel in a recent issue of HBR. The idea is not as crazy as it sounds. There has been a general movement toward flatter companies. Morning Star carries the process to its logical extreme. We have very flat organisations in academia; investment banks have a few layers; manufacturing tends to be more layered. Morning Star is a manufacturing company that has abolished layers. The company works entirely through self-directed mission statements and objectives and peer reviews.And it has delivered performance for several years now.
Can we extend this to larger organisations? Will it work for complex operations such as aircraft manufacturing? Hamel answers in the affirmative. My point would be that it is not necessary to replicate Morning Star in full. It is the underlying principle that is important: abandon the notion that decision-making is the privilege of a few at the top and involve more people in decision-making. A Brazilian firm, Semco, has done that. It does have managers but the managers are evaluated by their subordinates!
I have long wondered how it is that while more and more societies have tended to embrace democracy, the most democratic societies have corporations where a few people call the shots. Is there anything more to it that managerial vested interest?
More in my ET column, Managing without managers.