Whilst engagement and empowerment does not equate to self-management. It is one of the factors that points to a more "holistic" way of working.
Engaged employees take an average of 2.69 days sick a year; the disengaged take 6.19
Source: Gallup 2003
So whilst engagement and empowerment are clearly good and make sense in many ways. Most importantly for traditional businesses, they make sense financially.
However once employees become engaged they will continue to seek more fulfilment, it is inevitable. The most striking indicator is the "flattening" of organisations as employees become more empowered. As thse changes bed-in, the roles of management become less important and, especially the middle layers, may disappear. Some organisations have anticipated this and removed managers altogether.
First, Let’s Fire All the Managers - by Gary Hamel - From the Harvard Business Review - December 2011
It is not a trivial undertaking. Fitzii, a company which quite recently moved to self-management, report progress in their blog , which makes for some very interesting reading.
[We] found that when looking for in-demand developers, self-management, “was a real plus,” that differentiated and attracted coders to Fitzii. And Andy, one of those star developers that we recently hired, couldn’t agree more. “When I first learned that Fitzii didn’t have managers I thought – this is the type of environment I want to be a part of. Being given the freedom to make an impact is one of the most important things I was looking for in a company.”
Greg from Fitzii product development.
My deep sense, though, is that the biggest barrier is this: The less hierarchy at a company, the more that certain people will be forced to give up their perks and privileges. One manifestation of this at Morning Star is that the highest-paid employee makes just six times what the lowest-paid earns (including seasonal hires)—a far cry from the 380-to-1 spread between CEO and average worker pay among the S&P 500. “At the end of the day,” says Green, who joined Morning Star in 2006, “we’re asking the princes to lay down their crowns.”
Source: Rick Wartzman Forbes
This is a definite disincentive - for managers, directors and board members. Six times more pay might seem like enough but research by The High Pay Centre says: "CEOs now paid approximately 183 times the average UK worker". This sounds like a lot but One Society shows that figures are even higher in some of the larger companies.
262:1 average top-to-bottom pay ratio in companies which disclosed data
Of the FTSE 100 companies which disclosed data on their lowest rates of pay in response to our request, estimated top-to-bottom pay ratios varied from 48:1 (Capital Shopping Centres) to 656:1 (Marks and Spencer). The average estimated top-to-bottom pay ratio for this group was 262:1.
An additional comparison of estimated CEO pay and low pay data from collective bargaining records for a sample of 14 FTSE 100 companies produces a ratio of 309:1
This higher ratio is partly explained by the inclusion of some part-time staff and the fact that the data from collective bargaining records do not include pensions and other benefits. Adjusting for
these differences would tend to reduce the ratio towards the 262:1 figure quoted above.
Source: One Society Report A Third of a Percent
One of the problems which self-management might actually address is what is sometimes called "crony capitalism". Chrystia Freeland has some shocking numbers in her TED talk
Perhaps unsurprisingly there is a ground-swell of opinion,not just because of pay inequality, that the way we do work now is "broken". So how could we fix it?
As Frederic Laloux (see below and in Organisation) and others have identified, human development appears to proceed in "jumps" or stages. To précis; we started out as tribal then moved to agrarian, then industrial and now we are in what some call the information age. Whilst there are some groups and organisations that still operate in the first two modes, it is between the last two that "friction" is appearing. It may be this friction that is generating the heat for the next jump, if that isn't too simplistic an analogy.
People now have more information available to them than ever before and despite areas of desperate poverty we are in an age of abundance. Workers are demanding more recognition and more fulfilment and even - more fun. Mere remuneration doesn't seem to satisfy any more. We can see this in the rise of concepts such as work-life balance, employee engagement and other workplace changes such as flexitime, time-off-in-lieu, job sharing, bring a pet, in-work crèches and so on.
Enlightened business leaders and employees are examining these changes and trying to take them forwards. There are many small examples that show what we have now is not efficient and, if nothing else, it is this inefficiency that will drive the change.
Michael Nygard In his opening keynote speech to the W-Jax 2014 in Munich (Europe's no 1 conference series for enterprise technologies , agile methods and software architecture) cited an unnamed company that had an IT system that need to be updated.
"The company was advised that it would take six developers six months to complete the project at a cost of one million dollars. Two employees decided to have a go at it as a hobby weekend project. The had it up and running by the end of the following week.
“If you free people up to do the best thing they can, they usually do the best thing for your business,” Nygard concludes. “We all know the feeling of relief you get at five o’clock when you know you can now start to get some actual work done.” "
Now imagine what energy could be released if all employees were let of the leash. Probably a dangerous amount - unless the structure of the organisation can contain and channel this energy and, perhaps most importantly, the organisation has a clear purpose which its members believe in and can direct their energies towards.
Brasilata , a tin-can making company in Brazil, decided to set up a "suggestion" system, influenced by Japanese companies and their Kaizen (continuous improvement) culture which encourages employees to participate in "changing the company". Many companies have a suggestion system, they had one at McCain Foods back in the late 70s. Brasilata went one step further and also renamed all its employees "inventors" and encouraged "inventions". They even made it a requirement for all employees to spend time thinking of suggestions and inventions. In 1999 and 2000, the company achieved one idea per employee per year, by 2004 this was over 34 suggestions/inventions per employee per year and By the end of 2006, an average of 121 ideas per employee per year. For more on this read The Return of Suggestion System .
How did this help the company? Apart from making the employees feel part of the effort it has also provided many innovations and patents.
In 2001 Brasil was hit with an energy crisis, energy was rationed and each company had to keep within its limits. Making cans takes energy, so for Brasilata this was a big issue. They asked the employees.
[The suggestion system] resulted in remarkable solutions such as those of mid-2001, during the electrical energy crisis. Hundreds of ideas were presented which led to permanent solutions, such as replacing electrical shower devices with natural gas heaters. In just a few weeks, the company had achieved a 35% reduction in energy consumption, enabling it to sell its surplus electrical energy shares on the market.
Source: Brasilata News
This one event probably proved, if proof was needed that the suggestion system was a huge improvement on what would have been the norm, either a board decision of some management crisis-meeting followed by a change forced from above, which would probably have met with resistance from the work force.
In the fashion industry, the average turnaround time from concept to sale is around nine months. Zara have managed to get his down to two weeks (The A to Z of the Fashion Industry - By Francesca Sterlacci Purvin and Joanne Arbuckle). It manages this by having small, efficient, technically-advanced factories and by connecting designers and makers directly to the shops so that ideas can be trialled quickly and moved to manufacture quickly.
Zara delivers new products twice each week to its 1,670 stores around the world. This adds up to more than 10,000 new designs each year! It takes the company only 10 to 15 days to go from the design stage to the sales floor. Because of this streamlined model, Zara is not forced to be ahead of the curve. Rather, they exist on the curve, evaluating trends first, then following.
There are many organisations that have found new, more efficient ways of organising with many practising some form of self-management. It may be that these are just the ones we hear about but they do seem to be unusually successful.
Some of these organisations are listed in Case-studies. Fitzii, one of the more recent companies to embrace self-management, details the pluses and minuses on their blog , it makes for interesting reading.