Can companies work without managers?

Monday, 5 march 2018 | Redacción CEU

In the collective imaginary, managers always appear as the ships' captains. The ones who are expected to guide the ships until their arrival to the ports. Their crew has rely on their good judgment and trust them so the boat does not wreck. But, can a ship find their harbor without the captain's command? That is the premise from which models like adhocracy or holocracy starts. Are these methodologies effective? Can employees work well without the manager's direction? Is the workers' self-government a viable alternative?

Eight out of ten Spaniards do not feel valued at their job. It is precisely women between 25 and 54 who identify more with this situation. According to the report of the Recognition Index in Spain carried out by Amstel, 80% of managers focus more on highlighting the mistakes of workers than on recognizing their possible good choices. It is not surprising that in this scenario of lack of recognition many fantasize with the idea of that managing without high positions in their company can have an effect on the improvement of the employees' self-esteem and the push in their motivation and efficiency. But, is a work environment possible without the presence of a leader who takes the lead?

Adhocracy, holocracy and other ships without captains

In 1968, Warren Bennis coined a new term in his book The temporary society to name a new model absented from a formal hierarchical structure: the adhocracy. This term has its origin in the Greek words "ah hoc", something suitable and arranged for a particular purpose, and "kratos", that means system. The adhocracy is a work philosophy where the key is the adaptation to the circumstances at every moment, without the mediation of intermediaries and leaving aside the bureaucracy, in fact, it is considered a model that was born in opposition to it. According to this current, all the members of the organization have the effective capacity to make decisions and act according to them and, in this way, to decide the direction that the company takes.

Another modern concept that also comes out from a management philosophy based on a structure without hierarchies is the holocracy. Brian Robertson, founder of the company Ternary Software, was the one who coined the term in 2007 and who, in turn, experimented with this type of organizational system where the hierarchy is distributed in self-organized teams with authority, known as circles, in those ones, the employees have autonomy, play continually reviewed roles and are co-responsible for work decisions. These circles are connected to each other to align and work to achieve the same goals. With this work methodology, the structure goes from being pyramidal to horizontal.

These models have evolved over time and have been reflected in different experiences such as the ones from companies like Valve, Zappos, Morning Star, Vincit, GitHub, Semco or Medium. In some cases these models have been a success, in others, the companies or their workers have ended up abandoning the "boat", sinking or taking another course. Horizontal hierarchy models are risky, innovative and disruptive, therefore, both their detractors and their enthusiasts are many. Among their advantages, the experts highlight the staff high motivation, the system transparency, the readjustment capacity according to the circumstances, the performance increase, the innovation and creativity, the exchange of information and good communication, the democratization in the decision-making, the collaboration or the impulse of the entrepreneurial spirit of the employees. Among their disadvantage, these experts also point out the extra effort and time that is invested in the coordination within these systems, the change of mentality needed in employees in issues such as their job projection, the long periods of adaptation that require the adoption of this model or that is not an option that fits in all areas or work environments.

Can companies work without managers?

Towards horizontal organizations

In this period marked by digital transformation there is a certain tendency to bet on increasingly horizontal hierarchical models as they can be the agile models, the lean start-up or the design thinking where employees are more involved in decision-making, have greater participation and question traditional work structures. Many companies are experiencing a process known as delayering, a restructuring of organizations that reduces the "layers" or intermediate positions in companies. As a result, these organizations present a more horizontal organizational structure.

The development and push of the digital technologies has also transformed the system, the communication is no longer in one-way, from managers to employees. The information within a company now comes through multiple channels and in different directions and the values and culture of the company are no longer transmitted only by the mouth of the bosses. Social networks and Internet, in general, has made that the voice of employees is heard more strongly. A tweet of an employee may end up being retweeted by the CEO of the company. 

The business structures are more dynamic and open and, although in Spain presenteeism at work continues to mark the work culture, there is an increasingly manifest tendency towards a more flexible work model, where professionals work by projects and are organized by teams, have a greater independence and assume greater responsibilities. Workers are experiencing a slow but continuous transformation: the number of freelancers increases, the professionals have new ways to progress in the workplace -alternative to the traditional vertical promotion-, the new generations of millennials and "zeds" change the rules of the game and new profiles of professionals like the knowmads emerge. As a result, managers inevitably have to change, the leaders of the future are reinventing themselves.

Managers have to be able to develop their professional and personal skills to be leaders in complex environments where the change management is part of their day to day. At CEU IAM Business School we are aware of the changes faced by those in charge in this era marked by digital transformation and globalization and for this reason we have designed an Executive Development Program adapted to this new work environment.