No More Managers!
How to build a successful human organization
If you want to get lots of readers and claps and comments, just write a story about BAD MANAGERS who are mean and controlling. I’ve done it myself!
Everybody who has ever had a job knows there’s something rotten about people “managing” other people. There is a whiff of the parent-child and master-slave dynamic, and nobody likes it (except the sadists and control freaks who get the upper hand of the deal). So while we can all complain together about the management problem, we also need to come up with a workable alternative that makes sense from both a business and a human perspective.
Building a better organization
Based on my experience as a worker, manager/leader and organizational consultant, here are 5 structural reforms I would recommend for a more successful and humane workplace:
1. Invest upfront in best talent selection practices so you increase your odds of hiring the “right” person (skills, temperament etc.) for each job. This immediately reduces the need to “manage” (control) people very much.
2. Assemble self-managing (aka “leaderless”) teams to perform all major operational functions; provide them with clear quantitative performance targets (KPIs) and continuous public reporting of performance data.
3. Give every person a financial stake in the success of their organization by creating an employee stock ownership (ESO) structure. Learn about the beauty of ESOs in The Great Game of Business by Jack Stack and Open Book Management by John Case.
4. Impose strict upper limits on the salaries and stock ownership of the senior leadership (“C-suite”) team to prevent a dangerous split and risk of civil/class warfare in the organization. Consider a multiple in the range of 20–30 times the average worker salary/stock as was the case in 1965 (compared to 368x in 2000!).
5. Divide board representation proportionally between internal (workers) and external (investors) shareholders.
A better theory of organizational behavior
Modern management practices are designed mainly to suppress the independent thought, conflicts, rebellions and uprisings that naturally occur in human groups. They are a form of what Douglas McGregor called “Type X” leadership which is based on a paranoid view/distrust of workers and human nature:
People are basically lazy and stupid. If you don’t maintain close surveillance and tight control, they will perform badly.
The opposite attitude is the “Type Y” mindset:
People are basically talented and motivated to do their best. Just provide them with the resources they need and get out of their way, and they will perform well.
X and Y are both extreme views of human nature which we know is capable of both the best and the worst, depending on the person and environmental incentives. For organizations to succeed, they need to create conditions that elicit the best of human nature while suppressing the worst.
The 5 prescriptions at the top of this article are based on the following truths about human nature:
- People function mostly out of self-interest. They will always act so as to maximize their gains and minimize their losses.
Rx: align individual success with organizational success (especially financial) as much as possible
- People will empower those they trust and respect.
Rx: allow teams to self-promote their own leaders (if they even want such a thing) based on their own selection criteria
- People will police the behavior of their group/team members better than any arbitrary “manager” can.
Rx: allow well-designed human practices of shaming, shunning and expulsion to solve the “freeloader” and “psychopath” problems
- Human trust is earned, not ordered. It is the lubrication system for human groups. Maintain high levels of transparency and credibility in all communications and decisions.
Rx: make all data (especially financial and performance) continuously available to all stakeholders
SUMMARY
Modern management practices were designed to enable military and industrial groups to grow beyond natural adaptive size limits (kind of like cancer!) in order to dominate the competition. Like radiation and chemotherapy, these practices “work” (sort of) and also do serious damage to the patient.
As scientists in the fields of immunology, genetics and cell biology build a better understanding of the biomechanics of cancer(s), better treatments will emerge. Better ways of enabling people to succeed together in organizations can be constructed out of a more accurate understanding of human nature and groups.
