Get rid of all the managers

This is a paraphrasing of my talk from Ignite Sydney. The five minute format means this is necessarily lacking in detail!

Are you happy at work? Statistically speaking, the chances are that you’re not. In countless surveys, the number of people reporting that they’re engaged at work comes out at just 30%. That’s a shockingly low number. And the reason that people leave their jobs? The number one reason people report leaving is because of their boss. In a Gallup poll, over half of people claimed to have quit to get away from their manager.

In popular culture, the depiction of managers is as petty tyrants who delight in making life miserable for those under their control. And while those do exist, it’s the everyday mundanities of management that are more likely to drive people away.

At this point, I should make it quite clear that I am a manager. So why would I get rid of managers? The thing is that my career goal was never to be a manager, I never aspired to be a manager. I’m a software developer by trade; I like to think I’m a pretty good software developer. However, these days, my day is spent making sure that other people can get their work done. And the craft that I spent years honing? That’s left on the shelf to be dusted off in my spare time.

Management is also a cost to the organisation – 33% of your payroll goes on management. And in a company of a hundred thousand people, eleven thousand of them will be managers. There’s also the cost of navigating the glacially slow hierarchy. Decisions like hiring and spending money go up and down through layers of approval. Even small decisions can wait on the incredibly busy people at the top of the hierarchy for approval.

All this doesn’t make people happy; and happy people are 12% more productive. Author Dan Pink identified three factors to make people happy at work – a defining purpose, mastery of skills and autonomy.

In agile software development, there is a strong reliance on self-organising teams. While many companies do struggle with allowing teams to self-organise, those that crack it show immense value. Some companies are going even further and self-organising their entire organisation.

Take, for example, the Dutch healthcare provider Buurtzorg which employs eight thousand nurses and provides care to eighty thousand people. Without any managers. Instead, Buurtzorg relies on a network of self-managing teams that look after a well-defined neighbourhood. Those teams manage everything themselves – giving care, administration and planning. And it works – Ernst & Young estimates that close to 2 billion euros would be saved every year if every healthcare organisation in the Netherlands achieved Buurtzorg’s results.

When you do away with a traditional hierarchy driven by power and position (known as a dominator hierarchy), you don’t end up with a flat organisation. Instead you get new hierarchies springing up which are based on influence, skills and recognition (known as actualisation hierarchies). That’s certainly the experience of computer games company Valve – with 300 people working there, Valve has no bosses. They claim to have a flat organisation but in fact there are many informal networks and hierarchies.

It’s important to distinguish between management and leadership. Although we’re geting rid of management, we’re not doing away with leadership. In fact, you need more leadership and from everyone.

Having natural leaders is critical in Holacracy – a system of organisational governance which sprang out of a software company in the States and has been adopted most notably by shoe retailer Zappos. In Holacracy, instead of each person having a job title and a job description, the organisation is made up of different roles – there being a clear distinction between a role and the person filling that role. This gives a large amount of flexibility within the organisational structure. And anyone can change the structure through the regular governance meetings. In those meetings, anyone can propose a change to the organisation and everyone affected is consulted. But this is not management by consensus; no-one has the power to block progress.

Back in March of this year, Zappos’ CEO sent a memo to all staff discussing the transition towards Holacracy and self-organisation. He gave them an ultimatum – to get on board or leave the company. Fourteen percent of the company chose to take three months severance and leave rather than adapt.

The point here is that change is not easy. But if only 30% of staff are engaged at work, don’t you owe it to yourself and your organisation to make a change. And if you can’t get your company to change, then it’s time to change your company.

Archives