Self-Managed Organizations: Self-Delusional or The Future Of Business?

In 1958, a S&P 500 company could hope to be around for an average of 61 years. Today, most survive 18 years on average. And 52% of all Fortune 500 companies have either experienced bankruptcy, been acquired, or gone out of business entirely between 2000 and 2014.

So, businesses are waking up to the realities of increasing complexity and warp-speed innovation. Whether they like it or not, the pressure to innovate and to re-invent themselves again and again is high.

Command and control management practices were established during the early 20th century. The main goal of companies was scalable efficiency. Hierarchical management practices were necessary so that a few educated people—called managers— could instruct less educated people on how to complete tasks.

Today, we have a highly educated workforce, highly informed customers, and a degree of automation like never before. Companies can no longer differentiate themselves through scalable efficiency—their goal now is to become innovative and agile.

Finding new ways of coordinating work across organizational silos is no longer a luxury, it’s an imperative. Here are seven things self-managed organizations of the future will need to learn to do differently so they can move from scalable efficiency towards innovation and agility:

1. Find and follow a higher purpose. Define the “why” behind the endeavor.

2. Understand that mutual trust is the glue that binds people together.

3. Create a culture where leaders empower people to take more responsibility for success and for failure.

4. Consider the team setup carefully to foster more accountability and autonomy.

5. Change the way you incentivize people.

6. Understand that peer group competition and team pressure are powerful motivators.

7. Empower distributed decision intelligence to increase decision quality and foster ownership and autonomy.

To read the full article from the Future of Work, please click here.