“Boss” has never had an attractive connotation to those not at the top. The vernacular has changed but the implication of rigid top down hierarchy is leaving much to be desired these days. Organizational culture has slowly evolved into a more conscientious environment, ripe for growth, but the possibilities have only just begun.
Last fall, we had a chance to chat with exchange partner Doug Kirkpatrick, a founding member of The Morning Star Company in northern California, about the practical application of a flat organizational structure. Morning Star’s philosophy of self-management has become so fascinating to the outside world that he left the company in 2003 to help co-found the Morning Star Self-Management Institute.
Though flat organizations are rare, they aren’t unheard of but it takes some time to wrap your head around the concept. A flat organization does not have a strict hierarchy of positions or decision making. There are no managers or executives, just colleagues. That includes the “boss”.
Self-managed since 1982
If you’ve ever had ketchup on a hotdog or marinara sauce on a pasta dish, it’s likely that you’ve contributed to Morning Star’s 600 million dollars in sales. As one of the largest tomato processors in the world, it supplies over 40% of the US industrial tomato paste and diced tomatoes markets…and it’s completely flat.
In 1982, after a professional career as a one man owner/operator of a truck driving business, Chris Rufer established a partnership with a small group of tomato growers to build their own processing plant. In its inception, the Morning Star Company put its mission statement in charge, creating its organizational vision in which all team members “will be self-managing professionals, initiating communications and the coordination of their activities with fellow colleagues, customers, suppliers, and fellow industry participants, absent directives from others.” In essence, it made every person in charge of their own contribution to the company’s success.
It sounds a little hokey and unbelievable but after an extensive Q&A with Doug, I feel less skeptical about the idea of self-management and more interested in seeing where else it could be applied.
A network of contracts
In practical application, everyone is truly equal. Every year each employee creates, negotiates and signs a CLOU (Colleague Letter of Understanding) with their coworkers that outlines their business interactions with each other, thus creating an operating plan with performance matrix. Some can be simple but many are rather complex. Altogether they contribute to a network of CLOUs that encompasses over 3,000 formal relationships within the full-time personnel.
In day to day operations, everyone has the ability to purchase, create business, hire/fire, etc… If a factory worker needs a specialty screw driver to fix a machine, they purchase it and the invoice is paid by accounting. There is no red tape, only trust in the fact that everyone is working towards the same overall goal. The accountant’s job is not to tell that colleague whether or not to purchase what they need, but to find the money to do so. If someone wants something from another department, they approach whomever they require and ask for it. If it’s in the best interest of the company, the colleague will either agree or negotiate a better deal.
When demand exceeds manpower, who better to search for new candidates than their future colleagues? There are safeguards in place in the small chance of abuse, but they are rarely used to their full extent and most find this process liberating.
Freedom and Responsibility
Companies are generally hesitant to put that kind of trust in employees, but it begs the question; why spend the money to research, recruit, and hire if not to employ the most qualified person who will work towards the company goal while exhibiting the company’s values? The current job market is highly competitive, so it’s unlikely that any employee on your payroll is there because they were your only option. People are hired to do something they are already fantastic at. Why waste time and capital getting in their way?
As one Morning Star team member is quoted in the Harvard Business Review, “Around here, nobody’s your boss and everyone’s your boss.” I like this quote because it emphasizes the responsibility of leadership in a culture that doesn’t have a corporate ladder to climb. Your power comes from the skills that you’ve mastered and your contribution to the overall goal which keeps everyone collectively striving for more.
Our exchange with Morning Star Self-Management was an enlightening experience and though I don’t believe that flat is the ideal situation for many companies, it does bring a lot of interesting ideas to the table. You don’t have to be flat to be successful in the future of organization culture, but there is something to be said about the malleability of your pyramid.
If you’d like to read more about the Morning Star Company and the topic of self-management, Doug also has a book out called “Beyond Empowerment: The Age of the Self-Managed Organization” (click here for more information).