#NoManagers — Experiences with a new leadership paradigm

Everybody is a Boss (Photo: Nils Hasenau)

When you ask my colleagues about what has changed in our company, they will most likely answer: „Everybody can make every decision. I can choose my own projects, who I want to work with and how much money I earn.“

I used to be the boss of this company, a think&do tank in Berlin, called betterplace lab. What happened to my authority?

We started the betterplace lab five years ago, as a spin-off of betterplace.org, Germanys largest crowd funding platform for social projects. My team consisted of one colleague and me and we both did whatever needed to be done. When the team grew to its current size of ten, we specialized, with me taking on the title of LaBoss and sitting on the board of our mother company, the gut.org gAG (a non-profit stock corporation).

Whereas before I had spent lots of time researching and writing, I found myself more and more in meetings, telling employees what to do, structuring, aligning and checking up on their work. I often asked myself, if this really was the best use of my time. It certainly was far less fun than before. I also had the impression that my team knew much better than I, where they were most productive (in the office or in a cafe?), what timelines were realistic and which clients needed extra attention.

I was not the only one having these doubts about the value of managers and CEOs. I discovered that a number of companies had already shifted to a #noManager style. The inspiring Handbook for New Employees from US gaming company Valve states, We don’t have any management, and nobody „reports to“ anybody else. We do have a founder/president, but even he isn’t your manager. This company is yours to steer — towards opportunities and away from risks. Similarly at Spotify, the worlds largest music streaming service, all decisions are made in the small, interdisciplinary teams, which are the building blocks of the company.

Other examples include the publishing platform Medium.com, online retailer Zappos, as well as the Web-Tutorial firm Treehouse. You may think that it is relatively easy for internet-based companies to experiment with new forms of leadership, as their core development teams already organise their work in agile Scrum-processes. But reading Frederic Laloux’s Re-inventing Organisations –a book, which quickly has become a sort of bible for the new self-management movement — I discovered that a number of successful large hardware and service companies also operate outside of the conventional leadership hierarchies. Among them, Morning Star, the largest US tomato paste producer and Buurtzorg, a highly successful Dutch non-profit home care organisation, whose 8500 nurses work entirely in self-managing fashion.

These organisations replace power hierarchies with competence-based hierarchies. While having hardly any staff functions, they establish different types of self-management and peer-based structures throughout the entire organisation.

No job titles and peer-based salary decisions

Inspired by these examples, the betterplace lab team started to become an organisation without a boss. We abolished formal titles and rankings, established peer-based salary decisions, as well as new workflows. Now major decisions — about strategy, new full-time employees or the yearly budget — have to be passed with a ¾ majority. All other decisions are left to individual project leaders.

Employees choose which projects to work on. They ask themselves four questions before accepting: 1. Does the project fit our strategy? 2. Will I have fun? 3. Does it contribute to the refinancing of the organisation? 4. Do I have the capacity to take it on — or do we have enough resources to staff it adequately? Not all criteria need to be met, but the potential project manager needs to discuss them with a colleague during an obligatory consulting process. After that he is free to set up the project as desired; drawing up the budget, hiring staff, identifying milestones, organising quality controls etc.

betterplace lab Teammeeting: Competency-based hierarchies need a strong sense of “We” (Photo: Nils Hasenau)

Besides compulsory consulting processes with peers (whose advise can be ignored), we assign a few overview roles. One team member is responsible for making sure that our finances are in order, another watches over the team spirit. Yet others oversee strategy and a coherent external communication of our work and brand. It’s important to note that people in these roles are not responsible for finances, team spirit etc., but instead make sure that everybody is aware of these areas and organizes their work accordingly.

We learnt that for self-management and peer-based leadership to be successful, employees need to have two seemingly contradictory qualities: a strong sense of individual excellence, as well as an awareness for the well-being of the team and company as a whole. A team consisting of brilliant individuals threatens to disintegrate, whereas employees with a focus on the team never get things done. For many of the people we hired, the individual brilliance part comes easy. Much more difficult is the team part: we invested a lot of time and supervision in creating mutual understanding of our different personalities, viewpoints and needs.

So far, the experiment has worked well: employees flourish. New, great products have been developed without my participation. Team members have extended their employment long over their initial commitment. At the same time, this structure is not for everybody; one valuable team member is leaving. We are also experiencing tensions implementing the far-reaching autonomy of the betterplace lab team within the larger organisation we are part of. It takes time and persistence to explain to members of our supervisory board— almost all of whom have successful leadership positions in more conventional organisations — how we work and why these conditions are favourable for innovation and creativity. Our executive board needs guts to let us experiment and relinquish control.

For my part, I love my new role (most of the time). My business card now presents me as The Godmother and my most important job is to make sure that the fine balance between brilliant individuality and team coherence is kept. I also need to make sure that in times of crisis the new team structure withstands pressure to fall back into old ways; that neither team members rely on me to solve their problems, nor that the board takes over and crushes the experiment. But maybe the most important and difficult move for me is to fully trust the team and the process to succeed without me and shape a future which may be very different from the one I have in mind.