Companies Without Managers Do Better By Every Metric
Participate and Share
Last week we described Participation Age companies – Stakeholders, who work in self-managed teams, replace employees; Leaders replace managers; there is profit-sharing for everyone, no work hours, etc. But how do they perform against traditional, management-centric companies with Industrial Age hierarchies?
Quite well, it turns out. They don’t just hold their own; they blow the lid off! Let’s start with tiny companies and work our way up to huge.
Our little seven-year old company, Crankset Group, with 20+ full and part-time people grew 704% in the last five years, and growth is accelerating. Nobody reports to anybody; everybody is a Chief (Relationship Officer, Results Officer, Transformation Officer, Connecting Officer, etc.). Everyone leads in their area of expertise, and we all know exactly what result we are supposed to produce, and if you get the result agreed upon, nobody cares WHERE you are or WHEN you are. And everyone has the ability to grow, learn, start things, and make more money by expanding their impact.
Menlo Innovations, a software company with over 100 Stakeholders, has a manager-less Participation Age culture, and is well known because it’s founder, Richard Sheridan, wrote a book called, Joy, Inc., that tells how they built a company with almost no hierarchy. They now have courses teaching other companies how to do it.
Valve, a software/game company has 300 Stakeholders. There are no managers. People transfer to other projects without “permission”, choose what to work on, decide each other’s pay, and go on vacation for a week together every year (Hawaii last year). Valve is significantly more profitable per Stakeholder than either Apple or Google.
Semco, a Brazilian company with 3,000 Stakeholders, made washing machines in 1951, but is now in multiple industries including real estate, banking, and web services. In a 10-year recessionary period in Brazil, Semco’s revenues still grew 600%, profits were up 500%, productivity was up 700%, and for the last 20+ years, employee turnover remains at an incredibly low 1-2% per year. They have no managers, no HR department, no written policies (just a few written beliefs) and no office hours. Everyone works in small, self-motivated, self-managed work teams who make their own decisions regarding salary, hiring, firing, and who leads the team for the next six months. There are no managers to involve in the process.
W. L. Gore, Inc.
W. L. Gore (Gore-Tex), with 10,000 employees has been a Participation Age pioneer, functioning without managers since the 1960’s. Stakeholders at Gore say it takes 6-12 months for new hires to believe there will be no manager looking over their shoulder. One Stakeholder said, “If anyone here ever told someone else what to do, no one would work with them again.”
Fortune 500s and Internationals
Thirty Fortune 500’s are also moving aggressively in the direction of being Participation Age companies and are growing an average of ten times faster than the average S&P 500 company over ten years. Forty-one other international companies and organizations comprise the WorldBlu list of “most democratic” manager-less companies.
A Big Duh
These examples just scratch the surface. The Participation Age company isn’t a fringe idea, but is the wave of the present. In ten years, this will all be a big “duh”. And those that don’t embrace the Participation Age will be left behind.
The results are in. If you want to make a bucket-load of money going forward, you will want to join the Participation Age, and replace managers with exponentially fewer leaders.
Next week we’ll look at the radical difference between the two, and how most companies that think they have leaders, actually have managers.
Article as seen on Inc.com