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What makes for a successful self-managing organisation?

Self-organisation is a phenomena that many successful companies are now adopting. We sat together with Stellar Capacity faculty member Christopher Kummelstedt, researcher in the topic, to understand more about what drives this development.


I’m sure it’s fairly common for you to hear people make their own conclusions about self-managing organisations. What is the definition from a research perspective?

Self-management occurs when individuals demonstrate their ability to initiate and coordinate their own work within larger organisations. Employees are trusted with the freedom to determine how their work aligns with the larger purpose of the system.

In the research community, we have the following criteria for a self-management system. The first criteria is that you remove the relationship defined by manager and subordinate from the organisation. You replace this―and this is the second criteria―with another kind of formal process that helps to meet organisational needs. That is, in some examples of this type of organisation, people can set wages, fire each other, and solve conflicts without falling back on the officially-accepted notion that a predefined person has the right answer to these and other problems. And then thirdly, it’s important that these changes apply to everyone. They shouldn’t be for only some members of a team - then it’s not a self-managing organisation. Together, this is the textbook definition, and what you’re likely to find in a generic article.

But as an individual, I’d say that this definition isn’t so important. It’s much more important that the level of self-management matches with what the individuals in the organisation want and are ready for. And it’s something that should slowly develop over time. You can become more self-managing without becoming a self-managing organisation. And it’s that graduality―that slow shift―that I think is the safest and maybe the only way to create this kind of organisation in practice.

Could you provide us with some concrete, real-life examples of this working?

One example I could share is Valve software, and not just because they’re one of the largest actors within the very profitable computer game industry. A few years ago, they were actually the most profitable company in the US per employee. They operate as a network of self-managing employees, with each having a much greater autonomy in deciding their tasks and responsibilities. It’s also one of their stated aims to have a ‘flat organisation’, in which traditional hierarchies don’t quite apply. Their culture is very dynamic because of this fact, and it really encourages movement and interaction between different parties. This happens quite literally - all desks in the office have wheels attached, and this is a deliberate way for employees to decide where suits them best for the needs of the day, and who they need to collaborate with. Each employee has the power to green-light projects, by being encouraged to question how their personal involvement can contribute to the current needs of the company. Anyone has the power to form new initiatives, and they'll usually be advanced through corresponding with team members. This means there's no real demand that you need to "report to" anyone else - instead, you try to form a consensus through open dialogue with fellow employees. As a result, there's a real diversity of thinking at the company and a greater sense of individual responsibility. It might seem like a risky undertaking, but there’s no doubt that they’re running an incredibly lucrative business.

Why would you see that organizations would benefit from implementing sel-organization?

Some things are important for traditional stakeholders like profitability. If it’s a profitable way to do something, they’re going to choose to do it. But there are some things in society that are simply good for people – it makes them feel better. When those two things are true at the same time, something very positive can happen quickly, because all the different stakeholder groups get the thumbs-up and we’re off to the races.

Today, it’s become so clear that feeling passionate about what you do is fundamental as a baseline. A passionate work environment needs to look quite different. And these are some of the puzzle pieces that appear when discussing self-management, as we discover the best new ways to organise.

How do you think these types of organisations will influence the future? Do you have any observations that can help us to anticipate what’s to come?

One way to think about answering that question is to consider what the main drivers of change are at the moment in society. And there are three that are of special significance here.

For one thing, the world is changing very quickly in a way that wasn’t true fifty years ago. It’s massively more complex and it changes in a quicker way. That means that organisations are going to have to act quicker as well. You can’t make quick decisions top-down. Now, it has to be bottom-up. So that’s one trend that affects everything and makes it more likely that this will be the way to do things.

The second thing is the shift from linear production processes to the knowledge economy. If you have a hierarchy that can match a linear process, but you have an uncertain innovation environment by creating a complex thing, then the way you manage that has to be complex as well. You have to organise a network that is similarly complex. So, that’s another driver that makes self-managing organisations an increasingly better fit.

The third driver is that people are waking up to the fact that we have needs that are more involved than just putting a roof over our heads or taking a career. People are starting to care more about self-actualising. Being creative in the workplace is also becoming increasingly prioritised. We want to live at work, and not just work to live. This trend is also going to need to involve a much higher degree of autonomy if we want to self-actualise.

I want to follow-up on this topic of self-actualisation and autonomy, because these are words that we hear quite often today. What do you think are the external factors that influence this kind of direction and language? What overlaps have you noticed between your research and external global developments?

The word “self-actualisation”, as we use it today, comes from the research of Maslow. Everyone knows about Maslow’s hierarchy of needs, and in most versions of that model, self-actualisation is placed at the peak of the pyramid. One reason that it’s becoming more and more relevant over time is that the logic of that model satisfies a certain progression. Humanity has reached the point where self-actualisation as a need is becoming increasingly relevant, and this is because we’ve satisfied the previous levels. That’s the psychological context of it, right?

But then there is a technological element to it with developments in IT. Because IT means that if information can travel like a network, then it also means that we can organise like a network. And key to self-actualisation is being able to lead yourself. If I don’t have to listen to my boss, but I can listen to what I perceive in relation to my network, then I can start to self-actualise.

So, that is the clear link as I see it - both that we start wanting to self-actualise because our needs have become more advanced, and because the way that digital technologies work today is starting to enable it.

Many might notice that self-actualisation is becoming more of a need, but can people still ensure their own security? After all, self-actualisation could still mean many things depending on the context. Is there a safer way to implement self-management into an organisation?

For me, I always like to turn back to my metaphor about a boat. It starts with how the group and hierarchy sees the waterline today. Where is it safe? And then you can go further than that. Where is it safe just to bring in a little bit of the potential to self-actualise in relation to some questions? Then you can slowly take it from there: when people actually want to self-actualise, and when the hierarchy wants to. By making these changes from within, you avoid potential conflicts.

From your perspective, the shift has to be recognised as a gradual one. What kind of general steps would help in that regard, to speed the boat along?

I think there are emerging best practices on how to do this. In a way, research has been looking into this for over thirty-five years, and there are some things that seem to be true across all organisations. But I really think that what all research points to is that you need context, and you need unique solutions. I’d say that letting a unique solution grow slowly is actually the fastest way to do it.

So again, the boat. Where is it safe right now? And then, slowly in an agile way, through iterative loops of learning and changing the old way into the new, you realise that the fastest that organisation members want to go is the fastest way to do it.

There are, of course, counter examples to what I’m saying. From what I can see from it, however, I don’t know if it goes any quicker. I think that speeding things up too quickly leads to much more turmoil, much greater distrust, and a lack of relaxation in the transformation. Some people may disagree with me, but I don’t think that forcing overnight changes should be the new way. I think it’s best to evolve from where we are today, rather than to try to indicate where we’re going to be tomorrow. You have to let it happen in its own time, and just relax into the process.

In order to do that effectively, you need to promote a very relevant set of skills. What skills do you think are important in order to establish that type of mindset?

If I’m going to answer this in terms of research, the area that’s relevant is called learning psychology. Essentially, it claims that self-management as a form matches certain developments for a person. If I were to summarise that area―or what those developments are about―it’s that they’re cognitively, emotionally, and interpersonally all concerned with being able to see the world through more than one lens at the same time. Focusing on individuality is important, but it’s also important to focus on collective needs. By focusing on both at the same time, we can strengthen each.

So, what skillset is necessary? The ability to relate to other people and yourself - as a duality, where both parts are vital.


About Christopher Kummelstedt:

Christopher is a faculty member at Stellar Capacity. He is also a PhD researcher at the Stockholm School of Economics, and specialises in organisational psychology and self-management.


Learn more about self-management from Christopher by joining us in our Stellar Executive Program, and discover what’s needed to become an adaptable leader in times of disruptive innovation. The program―which has alumni from major companies ranging from IKEA and Volvo to Siemens―is designed for leaders who wish to be among the foremost in adapting to a digitised world.


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