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.