Archive for the ‘New Concepts’ Category

Morning Star is a California-based tomato ingredient processing company founded on the principles of self-management. Employees at Morning Star initiate communications and coordinate activities without direction. No one among the company’s 400+ employees takes orders and nobody gives orders.

In the December 2011 edition of Harvard Business Review, Gary Hamel explored how Morning Star has created an organization that incorporates managerial discipline without hierarchy, titles and managers, achieving market-centric flexibility. While the concept of self-management may seem unfathomable to traditional thinkers, Morning Star has embraced this concept for over two decades, becoming a global market leader with 2010 revenues of over $700 million.

Annually each Morning Star employee negotiates a ‘Colleague Letter of Understanding’ with the associates they work with the most, to determine responsibilities. Each employee also has their own personal mission statement, which they are driven by. Employees are responsible for obtaining the training, cooperation and resources needed to achieve their mission. All employees are given access to the same system wide data, preventing information silos. Also all employees can spend the company’s money if they show return on investment and NPV calculations to demonstrate the business case behind their spending. In addition, overloaded employees have the flexibility and power to decide to hire new employees and all new hires go through a training session on self-management. Compensation decisions are based on individual contributions and determined by peers – building a good reputation is key.

The Advantages of Self-Management:

  • No time is wasted supervising others, increasing efficiency.
  • The lack of bureaucracy, results in faster decision-making, increasing the organization’s flexibility.
  • No centrally defined roles results in broader more complicated roles. Employees get to focus on what they’re good at, with unlimited scope to take on new responsibilities as their skills and experience increase.
  • Employees are empowered to imagine, innovate and contribute. Spontaneous change occurs from employees having the freedom to get involved anywhere where they think they can add value.
  • Employees value the freedom given and being treated like adults, increasing their company loyalty.

The Challenges of Self-Management:

  • Not everyone is suited to the Morning Star culture, particularly individuals that like to be told what to do and those that like to tell others what to do.
  • Cultural adjustment – takes time. New hires from traditional hierarchies will take time to adapt to the self-management environment.
  • Accountability can be challenging – everyone is responsible for peer regulation to ensure quality and service are maintained.
  • Lack of titles and promotions can make it extremely challenging for employees looking to transition in to roles with other companies.
  • In order to ensure the self-management culture is maintained growth through mergers and acquisitions is difficult to accomplish.

So what do you think? Would you want to work for a company with a self-management culture? Please share your thoughts in the comments section below.

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In recent months I have read several articles on progressive companies who offer unlimited paid vacation time to their knowledge workers. Companies who have initiated this policy require that employees get their work done on time and depending on the role find someone to cover them while they are away.

I am sure this concept may send more traditionally minded individuals into a frenzy of questioning how a company would get anything done? Wouldn’t workers take advantage and take too much time off? But for those companies that have tried it, it seems to be working very well for the following reasons:

  • Increased Retention: employees feel more appreciated when their organization cares enough to allow them this flexibility. Essentially this approach allows employees to find a work-life balance as WeddingWire acknowledge:

‘Vacations are important and we want you to have a life so our vacation policy is simple: take what you need. The concept allows for life to happen and as long as you get your work done, you can take what ever time you need, when you need it.’

  • After introducing unlimited paid vacation, retention at MeetingMatrix International was 100%. Interestingly, a tax services firm called Ryan, introduced unlimited paid vacation after receiving a resignation letter from a rising star. Since their policy change they have seen a significant reduction in voluntary turnover.
  • Productivity: as many of us have observed in the workplace, sitting at a desk from 8-5 does not necessarily equate with optimum productivity. Flexible working practices shift the focus from hours spent at work to what work is actually done. Under the unlimited time off approach employees are evaluated based on meeting job objectives and deadlines.
  • Save Money: this may surprise the cynics but this approach could actually save employers the time and money they currently spend on tracking sick and vacation time.
  • Recruit The Best Candidates: people notice when you combine a good culture with exemplary employee benefits. Being an MBA student word definitely gets around among my classmates on who the best organizations to work for are and benefits definitely factor into these analyses.
  • Treats Employees As Adults: this approach offers employees the flexibility to come and go without explaining every move. By showing that you trust your employees to take responsibility for ensuring they still get their work done; you empower them to perform. Indeed if you don’t trust your employees, you really need to examine if you have hired the right people.
  • It’s Not Just For Big Organizations: while some of the organizations that offer this policy are large, such as Netflix, other smaller organizations such as Red Frog Events, and WeddingWire have had success with this approach.

Overall the concept of unlimited paid vacation is very attractive, particularly from an employee standpoint, however caution is needed. Care needs to be taken by employers to ensure particularly in workaholic cultures that reverse psychology doesn’t kick in and that employees don’t feel manipulated into not taking time off.

So what do you think? Would this work at your organization? And do any businesses in the Reno/Tahoe area already offer this?

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