Can you imagine an army without a sergeant, lieutenant, captain, major, and colonel? Can you think of a basketball team without an assistant coach and coach? Could a symphony orchestra dish out good music without a conductor? Can a business organization operate without managers? Unthinkable, isn’t it?
A company cannot achieve its business targets without managers planning, leading, organizing and controlling its people. But I’ve got one surprise for you. Morning Star Company of America has done an incredulous act–managing its business without managers!
Operating in Sacramento, California, the company is the world’s largest tomato processor handling between 25% and 30% of the tomatoes processed each year in the United States. Reading the feat of this manager-less company whose revenues were over $700 million in 2010 is a fascinating study in management.
Featured in the Harvard Business Review (December 2011 issue), with a highly provocative title, “First, Let’s Fire All The Managers,” Morning Star Company, “demonstrates how to create an organization that combines managerial discipline and market-centric flexibility–without bosses, titles, or promotions.” It has been managing without managers for more than two decades!
BUSINESS
BUSINESS
BUSINESS
The employee’s boss is his/her mission. Driven by one’s mission and its accompanying commitments, not by a manager, the employee is responsible for the accomplishment of his/her mission and for acquiring the training, resources, and cooperation that he/she needs to fulfill this mission. One has to negotiate with his/her colleagues to get cooperation. The process shifts from “rule-driven compliance to peer-negotiated accountability.” By making the mission the boss, the company provides an environment where employees can manage themselves.
While there is freedom for employees to spend company’s money, every team or business unit has a Profit and Loss (P & L) goal that each member must adhere to. They have to build “a business case that includes return on investment and net present value calculations.” They have to consult with their colleagues. An employee, for example, who is pushing for a $3 million investment, might talk to as many as 30 people before spending the amount. Adding more people must be sold to one’s peers.
Negotiating with one another sometimes leads to conflict. How does the company resolve conflicts? Experienced team members serve as coaches. Conflicts are resolved through mediation by a colleague whom both parties trust. If one party objects to the proposed remedy, a panel of 6 colleagues is assembled like a jury to offer a resolution. If there’s still disagreement, the conflict is elevated to the president who would bring the parties together, hear the arguments, and make a binding decision. It is rare though a conflict goes to the President’s desk.
