Sometimes I wonder how I ended up with such an interest in Self-Managing Organisations.

I spend the last 20 years in a career in global management consulting, starting up two start-ups, and working as a Chief Operating Officer for a fashion company. My interest in organization and management theory has always been keen, but I felt my know-how was getting a bit rusty.

Then, late 2015, I finally got the chance to update my thinking. I started with wanting to understand Digitalization better, and over time I realized that it’s not about business models, fancy applications, disruptive technologies, Design Thinking, Agile Practices or Lean style experiments. That is all good and well. But beneath that, there is a common denominator: Knowledge Work.

mj2.pngOh yeah, good old Knowledge Work. That’s what I considered my specialty over the years, anyway. But the more I read, the more I doubted that I am really as learned on the subject of managing Knowledge Workers as I thought. After all, I had a career. I needed to solve issues, fit into companies and social cliques. There was only so much time for going into depth.

Now, the more I learned about Knowledge Work, the more I understood that it’s really Autonomy and Purpose which drives performance:

  • The Autonomy for people to do things they really care about in a way they think best
  • The Purpose of an organization which provides true north and alignment of all these vastly autonomous knowledge workers

In ended up with the question: Which form of organization is the one allowing utmost Autonomy and utmost Purpose? It is the Self-Managed Organization.

Becoming an advocate for self-managed Organizations befuddled me. After all, Self- managed organizations smell like communist habitats, like idealistic greens communes where nothing is ever decided, and endless discussions are the norm.

But I learned: Digitalisation needs Self-Management.

Moreover:

All Knowledge-based Work Needs Self-Management

Don’t take it from me. Take it from the greatest Capitalist of all Capitalists: Ray Dalio has arguably been the worlds most successful Hedgefund Manager for the last 4 decades. He is worth 15 Billion and managing a 150 Billion Euro fund called Bridgewater.

40 years ago Ray wanted to make money. He had a knack for the stock-market but he, like so many others, couldn’t consistently beat the market. So he studied harder and harder as an individual, only to understand, that an individual’s perception of the world is so prone to bias, so limited in its perception of the world. Time is too limited, senses are too weak, memory is too limited, and the workings of the mind are too fallible.

rj3.png

As a Hedgefund Manager, the key to better performance is making better decisions. But if an individual is so limited in its decision-making ability, why not tap the resources of other minds? The formula to do that is, Ray found out, is to create a working environment where people can speak their mind freely, honestly and where everyone has access to best and complete information as possible. It is a work environment built, as Ray Dalio puts it, on “Radical Truth” and “Radical Transparency”. On these two principles, he founds his central idea for Bridgewater, the “Idea Meritocracy”: A workplace where everyone can be at his best, where the best ideas prevail, not just the ones of the superiors:

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But Bridgewater is not a self-managed organization per se. There are lots of components which are clearly hierarchical. But its very essence, the way decisions are made, is clearly liberated from all Hierarchy.

Just take a breath and let it sink in: The worlds leading, 150 Billion$ Fund is running on key principles of Self -Management! It can’t get any more capitalistic than a hedge fund. For Ray Dalio, it has started out as a journey for more Profit, but it is now a journey to make people whole, to treat them as adults.

Profits were key. People were an after-thought.

Now, People are key. Profits will follow. 

Because it makes business sense & because it provides fulfillment – not just for Ray.

There is a lot of original, quirky and interesting stuff in his 2017 book “Principles”. I will explore that in another post. Here is a teaser:

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What do you think of Self-managed Organizations? Do you have a story of revelation that determined your thinking about management and organizations you like to share?

Sources:

  • Dalio, Ray “Principles: Life and Work” 2017
  • The featured image pictures Bridgewaters Headquarter in Westport, Connecticut
  • Just skim through the blog posts on managementDigital.net starting October 2015. Can you spot the “journey of revelation”?

 

 

Posted by Frank Thun

Management. Systems. Liberation

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