Self-Management

A 2009 Ernst & Young study found that Buurtzorg (see “Concrete examples for inspiration” below) requires, on average, close to 40 percent fewer hours of care per client than other nursing organizations— which is ironic when you consider that nurses in Buurtzorg take time for coffee and talk with the patients, their families, and neighbors, while other nursing organizations have come to time “products” in minutes. Patients stay in care only half as long,heal faster, and become more autonomous. A third of emergency hospital admissions are avoided, and when a patient does need to be admitted to the hospital, the average stay is shorter. The savings for the Dutch social security system are considerable— Ernst & Young estimates that close to € 2 billion would be saved in the Netherlands every year if all home care organizations achieved Buurtzorg’s results. Scaled to the US population, this savings would be equivalent to roughly $ 49 billion^[5]

In the case of FAVI (see “Concrete examples for inspiration” below), a foundry based in France, all its competitors have moved to China to enjoy cheaper labor costs. And yet FAVI is not only the one producer left standing in Europe; it also commands a 50 percent market share for its gearbox forks. Its product quality is legendary, and its on-time delivery close to mythical: workers are proud of their record of not a single order delivered late in over 25 years. FAVI delivers high profit margins, year in and year out, despite Chinese competition, salaries well above average, and highly cyclical demand patterns.^[6]

Pluralistic-Green organizations seek to deal with the problem of power inequality through empowerment, pushing decisions down the pyramid, and they often achieve much higher employee engagement. But empowerment within the traditional hierarchy means that someone at the top must be wise or noble enough to give away some of his power, and those below are subject to that power being reclaimed.^[7]

In Teal Organizations: the point is not to make everyone equal; it is to allow all employees to grow into the strongest, healthiest version of themselves. Gone is the dominator hierarchy (the structure where bosses hold power over their subordinates). And precisely for that reason, lots of natural, evolving, overlapping hierarchies can emerge— hierarchies of development, skill, talent, expertise, and recognition, for example. This is a point that management author Gary Hamel noted about Morning Star:^[8]

Morning Star is a collection of naturally dynamic hierarchies. There isn’t one formal hierarchy; there are many informal ones. On any issue some colleagues will have a bigger say than others will, depending on their expertise and willingness to help. These are hierarchies of influence, not position, and they’re built from the bottom up. At Morning Star one accumulates authority by demonstrating expertise, helping peers, and adding value. Stop doing those things, and your influence wanes— as will your pay.^[9]

A global, engineering company run largely without hierarchy or central control

Sun Hydraulics is a global producer of hydraulic cartridge valves and manifolds with hundreds of engineering projects running in parallel. Despite this, there is no master plan. There are no project charters and no one bothers with staffing people on projects. Project teams form organically and disband again when work is done. Nobody knows if projects are on time or on budget, because for 90 percent of the projects, no one cares to put a timeline on paper or to establish a budget. A huge amount of time is freed by dropping all the formalities of project planning - writing the plan, getting approval, reporting on progress, explaining variations, rescheduling, and re-estimating, not to mention the politics that go into securing resources for one's project or to find someone to blame when projects are over time or over budget. According to one of Sun's leaders, "We don't waste time being busy".^[10]

A vast organization run almost entirely with small, independent teams

Within Buurtzorg (which means “neighborhood care” in Dutch), nurses work in teams of 10 to 12, with each team serving around 50 patients in a small, well-defined neighborhood. The team is in charge of all the tasks that were previously fragmented across different departments. They are responsible not only for providing care, but for deciding how many and which patients to serve. They do the intake, the planning, the vacation and holiday scheduling, and the administration. They decide where to rent an office and how to decorate it. They determine how best to integrate with the local community, which doctors and pharmacies to reach out to, and how to best work with local hospitals. They decide when they meet and how they will distribute tasks among themselves, and they make up their individual and team training plans. They decide if they need to expand the team or split it in two if there are more patients than they can keep up with, and they monitor their own performance and decide on corrective action if productivity drops. There is no leader within the team; important decisions are made collectively.^[11]

A competitive global supplier run without middle management

FAVI’s factory has more than 500 employees that are organized in 21 teams called “mini-factories” of 15 to 35 people. Most of the teams are dedicated to a specific customer or customer type (the Volkswagen team, the Audi team, the Volvo team, the water meter team, and so forth). There are a few upstream production teams (the foundry team, the mold repair team, maintenance), and support teams (engineering, quality, lab, administration, and sales support). Each team self-organizes; there is no middle management, and there are virtually no rules or procedures other than those that the teams decide upon themselves.^[12]