The workforce evolved from unskilled laborers to highly educated individuals, but organisational models stubbornly remained untouched. As a consequence we still manage highly trained and skilled professionals the same way we managed semi-skilled factory workers in the past. Those management techniques were great when they wanted a clearly defined task executed over and over again, in the exact same way by a handful of people. Organisations today are a lot bigger, tasks demand a fair bit of creativity, and results are far less predictable.

Luckily there are other ways to organise your workplace, I wrote this article as a starting point for people who want to learn about alternative organisation models, and to give you something to dream about.

If you’ve been preaching for ages that your organisational model needs to be dynamic and you’ve already done some research on alternative management models, feel free to skip to the end where I propose some experiments you can try out.

“There ain’t no journey what don’t change you some.” David Mitchell, Cloud Atlas

Getting off the couch

I bet you’re still thinking nothing needs to change, after all your company is already amazing. It has everything you ever wanted in a company:

The teams are small, and your opinions are always heard.

Results are important and through inspiring leadership everyone is eager to achieve them.

The client is central to everything. All projects focus on getting feedback from clients soon and pivot to make the biggest impact.

Collaboration across teams is constantly improving, there are even mixed teams where people from different departments work together to get the best outcome.

If that sounds like your company, congratulations are in order! You’re probably working for an amazing company, which values their people and is engaged to evolve the way they work. But that’s where the praise stops, since that’s only a piece of the puzzle. While client centricity, leadership and improved collaboration are important, there are a myriad of articles about those already.

Ask yourself these questions:

Do people still complain about having too many useless meetings?

Do you have no idea what success means to the person your boss reports to? Is there a way you can actively follow up on the progress on those objectives?

Did your performance review process change significantly in the last decade? Or are you still doing one review a year?

Are objectives set in a top down manner, and do you not find them relatable?

Do you know what the strategy of your company is? Can it change quickly to reflect the changing business context? Can you influence it at all?

If that rings a bell, you are not alone. There are a couple of maverick companies out there who chose a completely different path, but they are certainly the exception to the rule. Valve, a gaming company, prides itself on an innovative organisational model without middle managers. Zappos, an online retailer, boasts the Holacracy organisational model, which is a set of rules that allow for an organisation to become self-managing. Start-ups are also well known for having a company culture without formal hierarchy and empowering employees to get involved in decision making. All those companies have a flat office structure, which aims to reduce management overhead by empowering employees.

Valve’s employee handbook has some controversial recommendations though.

You’re probably thinking that working in that kind of flat organisational structure will never work in your company, and you might be right. Valve, Zappos and start-ups are in a special situation. They make sure they hire the right people, those that are outspoken, engaged and will defend the company culture with their life. Their companies are usually small, or allow them to work on loosely coupled projects, reducing the need for alignment between teams. They also had C-level executives who are very comfortable with risks, and bleed the culture they preach. This is sadly not the environment most organizations are in.

But nothing forces you to go all out on a new organisation structure from day one. It’s a journey of experimentation and growth.

Figuring out where you want to go

A couple of years ago, during one of my deep dives in business administration, I subscribed to a MOOC called “Managing the company of the future” from the London Business School. The course changed my whole perspective on organisational systems. My biggest take-away was that a management model should never be static. It should be able to evolve based on what the company’s current needs and goals are, and the environment in which it operates.

A part of understanding alternative organisation models is figuring out what you value in an organisation, what you think is important. So in the spirit of sharing, for me the ideal company organisation is defined by these phrases:

A place where employees are empowered.

All operational managers act as coaches and mediators.

Trust is a top priority for both managers and employees, and transparency is how it is achieved.

Alignment and growth within teams are a consequence of honest feedback and vulnerability.

Alignment across teams is achieved because everyone believes in the same goals, and plays an active part in setting them.

But that might be a bit vague for most people and will probably not reflect your personal values. Let’s look at it using a more structured approach, inspired by the book “Reinventing Management” by Julian Birkinshaw. We will try to figure out the opportunities to refine our organisational model by dividing the management activities in four categories: how we provoke collaboration, how decisions are made, how people are motivated, and how objectives are defined.

What you need to keep in mind is that each one of these categories represents a scale, where each end of the scale has its own pros and cons. The challenge is to find out where you want to be on the scale as a team or company, and which steps can help you to move close towards that goal.

The results of a survey indicating how companies wanted their management model to evolve. I especially like how complex the horizontal axis is.

How we collaborate — Bureaucracy to Emergence

Bureaucracy plays a prominent role in all companies. It’s how we keep control by imposing rules and procedures. It works, and that’s why it’s so prominent in the workplace. I’m guessing the word bureaucracy makes you think about a lot of useless paperwork. That comes as no surprise, as it also has many downsides. Procedures and rules take time, which takes away the flexibility we need in a modern organisation. Bad rules tend to creep in, with people following them without understanding why they are there in the first place. Maybe worst of all, people disengage with their work because they are expected to just follow the procedures. As a consequence, high performance employees leave the company, because they don’t have the freedom to make impact.

While bureaucracy is traditionally a top-down approach, the alternative, emergence, is bottom-up approach. It’s the process of people coming together out of their own volition to achieve a goal. The peer review process is a good example of an emergent process where people of equal standing come together to achieve a better result. The guiding principle in this approach is that spending less attention to formal procedures will lead to more engagement and individual contribution. That in turn will lead to more flexibility and will allow you to react quicker to changing circumstances.

A practical example can be found in how Valve‘s employees have the right to choose the projects they work on, allowing teams to form naturally around projects with high potential. A less controversial approach to emergence can be seen in companies that allow employees and people outside of the company to work together in a non-binding way, like the numerous open-source initiatives, where companies allow people outside of the company to contribute and improve their software products.

How we make decisions — Hierarchy to Collective Wisdom

You had to listen to your mom, your teacher was always right, and yes the police agent was right to double park to get some food. These were all people with formal authority over you, hierarchy lies at the core of our society and is drilled into our thinking from the moment we are born. It was the obvious solution to keeping control of a lot of people, so when companies grew it made sense to follow the same principles. The problem in the hierarchical structure of companies lies in the assumptions made at its origin.

When the first big companies saw light after the industrial revolution, the focus was on producing goods. Employees who were good at increasing productivity and efficiency were promoted. Those were the people that knew the process through and through, the experts, and so it made sense to come to them for the hard decisions. This reality has changed, with work environments becoming far more complex, and companies growing in size exponentially.

These days, we know that a manager should be hired because of their expertise in management and leadership, and not because of their technical aptitude, since most of their job is dealing with people. They count on the technical experts in their team for the knowledge about the products of services. In a modern company managers have a role of mediators and information gatherers; they plan collaboration, inspire people and report results. Knowing that there is no longer a hierarchy of knowledge, where the manager knows best, the assumption that are the best person to make the decisions is no longer valid. The decision making process however hasn’t changed, and managers are expected to still make those technical decisions. This leads to situations where employees know the best decision, but need to convince multiple layers of management before acting on them, which obviously loses precious time.

It also leads to a completely different problem, in that information gets lost while traveling up the chain of command. This can be intentional, because we want to influence a decision or are afraid of reporting bad news; or accidental because we don’t fully grasp the problem or solutions. This leads to upper management fighting bias through data, so they can make good decisions even with the incomplete information.

To fight these problems some great minds proposed the concept of collective wisdom. Collective wisdom suggests that under certain conditions the expertise of large group of people can produce more accurate forecasts and better decisions. The concept isn’t complicated, bringing people together to make decisions from around the company, and trusting employees to take smaller decisions individually. It demands transparency and open communication channels, so people are aware what the values and goals of the company are, and what challenges it’s facing. You also have to create an environment of absolute safety, where the new hire feels comfortable challenging the CEO when they aspire to solve a problem together.

From the 4 categories, this is probably the hardest to balance. You can expect a lot of resistance from leaders who fear they will lose their control or influence within the company, or they are not ready to admit they don’t have all the answers. It’s not a comfortable situation for employees either. They might not know how to process the extra freedom, because they have never been allowed to make their own decisions. Hierarchy is so deeply ingrained in our society that moving away from it feels really unnatural to a lot of us. If you want to experiment with collective wisdom, my humble advice is to make sure the people in charge are excellent leaders, and that employees feel safe and empowered. It will take patience and perseverance, but this is also where the biggest gains can be made as an organisation.

How we set objectives — Alignment to Inspirational Goals

Objectives, KPIs, SMART goals, strategic planning, they are all tools to create alignment. In a business we want everyone to work towards the company’s goals. That’s why we force objectives on them to focus their attention in the right direction.

The reality is even with all those tools and all the best intentions, our personal objectives are usually very different from those of the company. We want to learn and grow, we want personal achievements, we want good work-life balance to spend more time with our kids, and we want money. That’s why a lot of us don’t identify with our objectives, and will have to do a last minute sprint to reach them at the end of the quarter. The tyranny of alignment has an even worse side-effect. Because objectives tend to be enforced and static, there is no room for innovation and creativity. This means companies lose out on potentially lucrative initiatives that could change their business for good.

Mistakes in the assumptions when setting objectives can also have disastrous effects, with people going against the interests of the company to reach their objectives. For example, just before the financial crisis, Wall Street investment companies hit all their revenue targets out of the park. They did this by chasing low-margin, high-risk business without having the capital to support them. Employees were aware of these risks, but they were also very aware of the big bonus they would get when they hit their revenue target.

The alternative approach, setting inspirational goals, accepts that it’s impossible to align all personal beliefs to the company’s objectives and that hard goals are best achieved when pursued indirectly. Setting indirect goals works best in large complex organisation with difficult goals, where alignment is less effective.

Avoiding short-term financial goals and setting inspirational goals can be done in a couple of ways:

Indirect goals:

HCL Technologies, a large IT outsourcing firm, chose “Employees First, Customer Second” as its core objective with a clear goal to increase employee satisfaction. Making employee satisfaction a priority goal resulted in more satisfied customers and strong financial results. While this result was not certain, the company’s management knew there was a strong relationship between both goals and that pursuing employee satisfaction was far easier than customer satisfaction or better financial results. But unlike the other two goals the indirect goal was meaningful for all employees, and had the wide-spread support of all employees.

Creative goals:

I have some bad news for you. As a software developer, I don’t live for the big day when we smash our KPIs. I live for the small moments of happiness: when I can solve a difficult problem in an elegant way, when I can help the business by solving small thing that has been bothering them for ages, or use technology in a new and innovative way. We can define creative goals easily by looking at other initiatives in the technology world. Hackdays, a couple of planned days where people get the liberty to work on their own creative projects. They are not forced to pick projects that benefit the company directly, and can let their creativity loose. This helps the company indirectly, by allowing for employees to chase innovative ideas, or to grow their skills outside of the normal spectrum. A different example was Google’s “20% time” policy, which allowed their employees to spend 20% of their time on projects they believe could benefit the company, which led to Google News, Gmail and even AdSense.

A leap of faith:

A leap of faith is the vegetable shop that aims to sell food at a higher price so farmers can make a decent living. Another example can be found in Cargills Ceylon, a producer and retailer of food, which wanted to increase effectiveness of Sri Lanka’s farming community, by decreasing waste, cutting out the middle man, and introducing technology. These objectives would lead to conflicting objectives, but by defining them as a guiding mission statement they create an inspirational framework which can guide the efforts. Unlike the two other approaches when taking a leap of faith, executives have no clear idea about the end goal. These companies abolished objectives completely, and are guided by a core belief or mission. When taking a leap of faith, you need to truly believe profits aren’t the most important part, and you need to be able to convince your consumers to support that goal too.

How we motivate people — Extrinsic Rewards to Intrinsic Motivation

It’s easy to start talking about freelance work, and how freelancers tend to be more productive, flexible and motivated. I can even throw some practical examples and research at you. I’m not going to do that. While I know the intention of authors is always to illustrate a point, it leads people to think about intrinsic motivation as an alternative to the most common extrinsic rewards, salary and job security. This is not how I want you to think about this journey, it’s about changing the focus when it comes to motivation.

The starting point of this journey is usually a company who focuses on remuneration and promotions, but has figured out that they have to offer growth to their employees too. They offer this in the form of training or by allowing them to go to conferences. When something goes wrong, like an employee expresses the will to leave, the solution is usually to increase pay or to offer more training. This is a perfect example of how managers reinforce the systems in place based on assumptions of what motivates their employees.

I really love talking about research from the 50’s, but I won’t. Douglas M. McGregor, MIT Sloan School of Management, Theory X and Theory Y

Let’s have a look at the different drivers of motivation:

Material drivers: I suspect there will be no surprises here. The most common extrinsic rewards are in this category, rewards like salary, promotions, bonuses, or prizes of any form. Sometimes these can also be granting you a patent or being allowed to get involved on a new project.

I suspect there will be no surprises here. The most common extrinsic rewards are in this category, rewards like salary, promotions, bonuses, or prizes of any form. Sometimes these can also be granting you a patent or being allowed to get involved on a new project. Social drivers: Most of us want to be part of a community or team. We take pride in our achievements as a team and find friends in our colleagues. Being part of that team, or someone’s role as an expert within the company are powerful motivators. Managers can influence these greatly by giving recognition.

Most of us want to be part of a community or team. We take pride in our achievements as a team and find friends in our colleagues. Being part of that team, or someone’s role as an expert within the company are powerful motivators. Managers can influence these greatly by giving recognition. Personal drivers: We all have our preferred activities; some work is more appealing to some than others. By allocating work to the people that enjoy it the most, teams can activate these intrinsic motivation drivers. This includes allowing people to use creative approaches to a problem, or giving them the opportunity to work for what they consider a worthwhile cause.

Whether you are a manager or an employee, I want to challenge you to think beyond the material rewards. Dig a little deeper, and look for those actions and rewards that make you and your team more motivated. Try out initiatives that increase job quality, instead of just throwing money or prizes at problems. Focus on involvement, what does your team think is worthwhile and important, and spend some money there. Remember that everyone is unique, and responds in a unique way to the work they do.

Starting the trip

You didn’t think I was just going to leave you with some abstract definitions right? I hope that these definitions allowed you to take a step back and look at the different ways we choose to organise the workplace, and that there are alternative approaches to collaboration, decision making, setting objectives and motivation.

In a modern company, we are constantly adapting to a changing environment. So our organisation model should reflect that, and we should be experimenting with different approaches continuously. Pick a small change to the way you do things, that you believe might change the way you work for the better, and experiment with it. As every proper continuous improvement approach should, you should evaluate the experiment’s outcome after a couple of iterations, and either change the approach or move on to a completely different experiment.

I’ve taken the liberty of writing up some experiments for you. Feel free to try them out, or make up your own revolutionary experiment and share it with us.

Challenge the bureaucracy!

Review some existing meetings or procedures, can you simplify them? Question if they add value, remove them completely for a week, or go for a completely different approach.

Exchange two employees between teams. Evaluate how their contribution and skill grows from the exchange.

Do you really need estimates for those tickets or for every small part of the project?

If you are not tracking the hours worked per week, why track vacation days per year?

Change the performance review process from the out-dated annual review to a system where you get regular feedback from peers, and promote growth in the moment instead of months later. You can still aggregate results on a yearly basis if you need to.

That document you were about to let your boss review? Ask for a peer review instead.

Offer to share technical expertise to another team, the so-called ‘peer assists’.

Do you need to plan that project out to every detail? Plan only a couple of weeks ahead.

Spread the wisdom!

“What do you think?” is a good start.

Try out lateral coaching, instead of having manager-employee coaching sessions, have two employees grab a coffee together and coach each other. Without the complication of a hierarchical relationship, coaching can be far more effective.

Call a ‘town meeting’, either offline or online, calling together people to share knowledge and make a decision together.

Start a management blog or share your thoughts on your company’s collaboration application (Slack, Yammer, e-mail…). It opens up the communication channels and puts a more human face on management.

Grab a coffee with someone outside your team, or even outside your company and ask their feedback on an idea.

Share, share, share, over-communication is the word if you want to create an environment of transparency and trust.

Empower one of your employees by delegating a more complicated task to him, with a mandate to make the decisions, but also the responsibility of its impact.

It’s OK that you don’t know everything, crowd source an idea by throwing a question in the group.

Create a centre of excellence for coaching, machine learning or any other discipline which spans over multiple teams, creating a pool of experts who can collaborate and grow together.

Inspire greatness!

Define DUMB goals: Dream-Driven, Uplifting, Motivating and Bold.

Define some indirect goals for yourself. Make sure it can impact your other goals. Share them for maximum impact.

Organise an innovation review, a meeting where people can share innovative ideas they feel could make their business succeed. Have an executive manager present ideas bubbling up through their divisions.

Give your employees time to pursue creative ideas.

Ask your neighbour what’s in his backlog of innovative ideas that he never got around to.

Plan an experiment to lead your company to a flatter organisation. ;-)

Love your job!

Buy a “Best <Boss / Developer / Architect / Coach / Leader / Worker>” mug or t-shirt for someone. It sounds cheesy, but it’s a prominent visual sign of recognition.

Thank and praise your colleagues.

Celebrate achievements big and small!

Give your team a prominent mascot, and make sure the team’s achievements are known around the company or community.

Tell your colleague the article he wrote on Medium is amazing, and share it with your friends. (This one is oddly specific.)

You know that corporate team building exercise you pay so much money for and everyone hates, cancel that. Give your employees the day to work on something they enjoy or think is important.

Organise a Hackday. This is not only a technology thing, and will bear fruit if people from diverse backgrounds work together.

Offer your office or help to the MeetUps or other events your employees help organise.

Give that innovative idea they proposed a shot, even if it’s more risky or would take a bit more time.

For some people competition is a big motivator, organise a contest and make the results as visible and celebrated as possible.

Create a “User manual for you” and send it to your team.

Thank you for taking the time to read this article, I hope I didn’t ramble on too long. I hope you found it interesting and want to try out an experiment with your team. If you have some time left please leave me some feedback, be it positive or constructive negative feedback. It means a lot to me and will allow me to grow!

Further resources