The disappointing results achieved by reengineering, total quality management, and team-based empowerment programs dictate that a quantum change is needed in the way organizations are designed and managed. This groundbreaking book by organizational change experts Ronald Purser and Steven Cabana reveals how innovative companies are unleashing huge productivity gains by transforming the work of teams, designing them into a fully self-managing organization. Purser and Cabana show how authorizing employees to design, control, and coordinate their own work and workplace has enabled some firms to reduce manufacturing cycle times by 50 percent, cut costs in half, and most important, share knowledge more widely in the organization.
The authors demonstrate through in-depth case studies how democratic decision-making works today in such pioneering companies as Microsoft, Motorola, Lockheed Martin, American Express, Charles Schwab, Sequa Chemicals, Syncrude Canada, and Celgard. They provide detailed instruction in the core principles and methods of self-management, showing why employee participation is key to strategy creation and corporate redesign, and how relocating the responsibility for value-added work into the hands of the people who actually touch the product or provide the service eradicates the need for external supervision and costly bureaucratic overhead.
Self-management is the wave of the future not only because it improves economic performance, but also because it puts dignity, care, and meaning back into work. A step-by-step blueprint for designing and developing a self-managing organization, Purser and Cabana's findings are required reading for every forward-thinking manager.
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ed his new approach Participative Design.
MAKING A CASE FOR THE SELF-MANAGING ORGANIZATION
Almost half a century has passed since Eric Trist and his colleagues at the Tavistock Institute made the original discovery of self-managing work teams operating in the British coal mines. After that, Fred Emery and other applied social scientists began accumulating evidence and building claims for a serious alternative to modern bureaucratic organizations. Many of these claims and arguments are not new; they have been around for decades. But we are now at a point in history where the accumulation of evidence and the pressures of a turbulent environment are making self-management appear to be a practical necessity for survival. A case for the self-managing organization can be made on several grounds, including the following:
The Economic Imperative. Arguments in favor of the self-managing organization can be made on economic grounds, since such organizations have a potential and track record for achieving superior business performance. As all firms are concerned with maximizing their long-term profitability and financial returns through the efficient and effective use of resources, the self-managing organization provides a clear advantage in this respect. Overhead and personnel costs are lower in self-managing organizations because they require far fewer middle managers, supervisors, and employees. Staffing levels are 25 percent to 40 percent less than in traditional bureaucratic organizations.
In addition to lower staffing levels, self-managing organizations are more productive. The empirical research on new production facilities that have been designed from the outset using self-managing (PD/STS) principles shows that productivity is on average 38 percent higher than plants using the same or comparable technology. Procter & Gamble, an early adopter of STS design concepts, for many years leveraged "high-performance work systems" as a proprietary manufacturing strategy and a source of competitive advantage for many of its production facilities. Managers and engineers were trained in the concepts and then took leadership for designing and managing these innovative plants. According to a 1986 Business Week report, productivity is 30 percent to 40 percent higher in P&G's high-performance production facilities than in its sister plants within the corporation. As Margaret Wheatley points out, "The fact is that workers who are involved in the design of their work are 35 percent more productive. That's a minimum improvement when you are into self-management. We have plenty of case histories over the years to document this increase....It's not about show-me-the-cases anymore. There is something more profound going on. It's about control and power, and frankly I don't know whether we'll choose now for effectiveness over control. That is the choice. We've been confronted with it in the past and rejected it for 50 years now" (Vogel, 1997).
These sites, however, are not even fully self-managing, since redesign efforts are usually limited to mostly nonexempt operational-level employees. In many cases, these "high-performance work systems" have resulted in team-based organizations but have failed to change the remaining crucial support systems and ancillary functions -- human resources, accounting, finance, logistics, and so on. Productivity improvements on the order of 50-100 percent are entirely possible when a whole enterprise -- plant operations, business units, divisions, staff groups, and senior management functions -- are also included in a total transformation to self-management.
The Organization Effectiveness Imperative. Self-managing organizations are not only more productive and efficient than traditional organizations, they also have the capacity to be more effective. By effective, we mean a set of organizational capabilities for continuously improving products and services, for rapid innovation, for being flexible and responsive to changing market demands, for rapid strategy creation and participative design.
These capabilities -- continuous quality improvement; radical reinvention; and creativity, flexibility, speed, strategic thinking, and rapid redesign -- are distinctly human capabilities that can only be developed through the way in which an organization is designed and managed. The self-managing organization is designed to tap, develop, and leverage human capability in conjunction with advanced information technology that provides the source of a competitive advantage that can't be copied easily by competitors. Recent Industry Week (Taninecz, 1997) census data support this. According to the report, world-class manufacturing plants were more likely to have self-directed teams and innovative human-resource practices which were used to build a more intelligent, involved workforce. These innovative plants tended to provide more training per employee, had a strong emphasis on cross-training, and offered employees payment incentives for learning new skills.
Self-managing organizations are more effective in providing employees more freedom and autonomy, while at the same time increasing the degree of control and accountability throughout the system. In a turbulent environment, effective organizations must have a capacity that allows them to embrace dilemmas and paradoxes, reconciling what seemingly appear as opposite polarities. Management theorist Charles Handy (1992) argues for balancing corporate power with a new federalism which "deals with the paradox of power and control; the need to make things big by keeping them small; to encourage autonomy but within bounds; to combine variety and shared purpose, individuality and partnership, local and global, tribal region and nation state, nation state and regional bloc."
One reason why self-managing organizations are more effective is because both human needs and technical requirements for getting the work done are taken into account in the design of the whole organization. The technical system (machines, equipment, work process, physical layout, information flow) and the social system (people, their psychological needs, and the way they are organized) work together in congruence. This concept is based on the socio-technical approach to designing organizations, where a best match, or balance, between people and technology is achieved.
In traditional organizations, the technical system (jobs, work flow, production line) is designed or reengineered in isolation from the people who have to operate it. The technical system is optimized first, and employees are mostly an afterthought; they are expected to adapt to their jobs as given. Rather than fitting people to technology, self-managing organizations attempt to address the requirements of the social and technical systems simultaneously -- they are "jointly optimized" to provide the best fit between the two. Because these two systems -- people and technology -- are interdependent, they have to be considered together. Reengineering business processes or redesigning work systems independently of those who have an intimate knowledge of those processes and have to live with the consequences of a new design is alienating, foolhardy, and destined to fail. Similarly, simply improving team relations, changing managerial styles, or making people feel better while ignoring the technical aspects of work rarely leads to the desired bottom-line results and also misses the mark.
Only by matching the human requirements and capabilities of the social system with the requirements and capabilities of the technical system can the best overall result be obtained. This means designing jobs, work systems, and organizational structures so that human as well as technical needs can be met.
The Commitment Imperative. As the nature of work has changed from tasks involving manual labor to tasks involving the processing of information, so has the need for greater employee involvement, responsibility, and commitment. The trend toward generating commitment in the workforce began in continuous process and science-based industries where the work processes were more interdependent, making safety and high reliability a primary concern. Many jobs required operators to detect and correct errors in real time, without the luxury of consulting with a supervisor. If an error or problem occurred, there simply was no time to wait for a decision to be made in a traditional bureaucratic fashion. Downtime could result in a significant loss of productivity. Thus the successful and safe operation of the technical system now depended a great deal on the quality of attention of the ordinary worker and his commitment to the job at hand. Since work in knowledge-based industries involves interpreting, analyzing, and responding to information, commitment is crucial to avoiding costly and even catastrophic errors.
Now that intellectual capital has emerged as the most critical element in organizational success, the desire to generate commitment in an increasingly knowledge-based workforce has accelerated. The transformation of information into value-added knowledge for products and services depends on how committed people are to their work. Companies that will be able to attract and retain talented knowledge workers will be those that provide a meaningful, engaging, and autonomous work environment -- a culture of self-management. Commitment to one's work is the result of high involvement and an experience of the conditions that satisfy a set of human needs. The self-managing organization is designed to create these conditions of high involvement, with human needs in mind. It does so by designing work systems that meet the critical psychological requirements that people have to experience responsible, fulfilling, and meaningful work.
This requires a total system change in the way the structure of work is designed. Simply installing teams doesn't bring about a change in the conditions under which people experience a sense of commitment -- or don't. Rather, the critical human requirements that lead to high commitment must be participatively designed into the work itself. People must be able to redesign their tasks so that each individual within a team has:
- Autonomy and discretion. Engaging work provides a blend of opportunities that allow an individual to make their decisions without close supervision, but also provides a set of guidelines that define an individual's scope of authority and decision-making rights. Individuals need an adequate degree of freedom in the way tasks are carried out, but they also need to know the prescribed limits and boundaries in which they may exercise their autonomy and discretion.
- Opportunity to learn and continue learning on the job. Engaging work provides ample opportunity for developing and sharing knowledge and skills, and opportunities for applying what one has learned that has positive consequences for the individual and organization. This form of action learning is possible when there are opportunities for (a) setting reasonably challenging goals and (b) receiving timely feedback on one's actions that provides the opportunity to question assumptions, reflect on and learn from mistakes, and correct and modify one's actions.
- Optimal level of variety. Work that engages and involves people is neither too demanding nor too easy, but somewhere in between. This usually means that people can coordinate tasks within their unit, allowing them to engage in an optimal variety of activities. Too much variety leads to stress and burnout; too little variety results in apathy, boredom, and fatigue.
- Need for social support and an opportunity to exchange help and respect. Conditions must be created that provide the opportunity for people to give and receive support and assistance from others in carrying out their work. The formation of teams often provides an opportunity for exchanging help and respect, but conditions for collaboration may also be created through more informal networks. A strong social support system based on mutual respect also fosters the recognition of individual achievement within a collaborative context.
- Sense of meaningful contribution. Engaging work provides employees and managers with a sense that their contributions are worthwhile and socially useful. Commitment is likely to be enhanced if people feel the objectives of the company are also seen to fulfill some worthwhile purpose for society. Engaging work derives from a sense of working for a larger purpose, of knowing how one's job contributes to the whole product. Individuals working in highly fractionated jobs often feel their jobs are relatively meaningless since they cannot perceive how what they do fits into the larger scheme of things.
- Prospects of a desirable future. Engaging work offers the prospect of advancement, higher compensation, learning new skills, and personal growth. What is considered to be a "desirable future" will vary widely among individuals; it might mean a degree of job security that allows one to plan ahead; ample opportunities for promotion and advancement; opportunities to increase one's skills and knowledge; acquiring greater levels of responsibility; taking on more complex and challenging assignments.
This is not an exhaustive list by any means, but the research on work design has shown that these six criteria are the major aspects that provide people with conditions for being committed to their work. From coal mines to clean rooms, there appears to be a remarkable consistency among the set of human needs that must be fulfilled if work is to be psychologically enriching, personally meaningful, dignified, and worthy of respect. Traditional organizations are only running on a couple of cylinders, rather than all six. Self-managing organizations are designed to provide the motivational horsepower that produces higher performance, in terms of both business results and human satisfaction.
The Creativity Imperative. In a world where the future is becoming increasingly uncertain and more complex, organizations that can foster Creativity will have an easier time reinventing themselves as shifting discontinuities demand new responses, new thinking, new strategies, and new products. Yes, people will have to learn and unlearn, reflecting on what they do, and diffusing what they learn throughout the organization. However, organizational learning will not be enough. People will also have to learn to deal with the unforeseen, to improvise in real time, and to create the future rather than becoming too attached to their historical success. In other words, organizational creativity will be key to thriving in the new environment (Woodman, Sawyer, and Griffin, 1993).
Continuous improvement of existing products and services will still be important, of course -- and even that requires creativity. But the real source of competitive advantage will be based on the capacity for continuous invention of new products and services. Warren Bennis, coauthor of Organizational Genius, knows the value of a creative workforce. Says Bennis, "I am convinced that the key to competitive advantage in the 1990s and beyond will be the capacity of leadership to create the social architecture that generates intellectual capital. Success will belong to those who unfetter greatness within their organizations and find ways to keep it there" (Bennis, 1997).
Organizational creativity can't be forced or engineered into systems -- we can't order people to be creative or simply pull a tool off the shelf for people to use, expecting creativity to flow on demand. Instead, self-managing organizations are designed in ways that allow social creativity to flourish. Organizing for social creativity means developing work environments that promote creative collaborations and interactive learning (Purser and Montuori, 1998).
New product development is increasingly being performed by multidisciplinary teams of crossfunctional groups that have front-to-back end responsibility for bringing the product to market. Yet, most knowledge workers often resent working in teams because there are pressures to achieve unity and a semblance of harmony through suppression of minority and divergent opinions. Many teams fall into the trap of operating like totalitarian regimes, which demand conformity rather than spirited dialogue and debate, forcing individuals to abide by "group norms" and policing deviant members who threaten to rock the boat. Thought police at Storage Technology used to reinforce the "hammer all the nails down" norm with a slogan that had become popular there, "There is no 'I' in T-E-A-M."
The self-managing organization is designed to enhance social creativity and collective entrepreneurship, as well as everyday creativity -- the kind of creativity that has escaped our attention in our hero-worshiping culture. This means developing a culture of improvisation, where people can share their knowledge and express divergent views in an atmosphere of trust. It is a culture where people tolerate ambiguity and actually seek out complexity, relying on colleagues for support and encouragement which provide the essential safety net that allows people to rally from setbacks. In self-managing organizations, people have more freedom of expression and movement, and aren't afraid of expressing dissent; employees are encouraged to vigorously challenge authority, customs, and tradition. The democratization of strategy creation and work processes in self-managing organizations gives employees more power and more voice, putting those with critical knowledge, expertise, and technical competence into positions where they can influence the outcomes of key decisions. Cultivating a culture of improvisation requires a spirit of play as well as a dedication to hard work, all held together by a larger sense of purpose and a compelling vision of the future.
The Partnership Imperative. Building effective partnerships will be a critical success factor in the global economy. Partnerships are emerging in many shapes and forms: creating strategic alliances, entering joint ventures, forming R&D consortia, building networks and linkages in a virtual organization, partnering with customers and suppliers, and treating employees as strategic partners in the business. As Rosabeth Moss Kanter puts it, more and more companies are becoming PALs, "pooling, allying and linking" (Kanter, 1997). Companies are discovering that there is a deep connection between building quality relationships based on a "high trust" partnership culture and building quality products.
Partnership, participation -- these words come from the same root -- pars, which means to partake. When we build effective partnerships, we build relationships that are based on equal participation, mutual regard, and trust. Partnerships have the give and take between equals. There is a mutuality of interests between parties that provides common ground, allowing the partners to collaborate toward shared goals. Effective partnerships drive out fear, because each party trusts that the other party will act in their best interests. There is no coercion, manipulation, or attempts to dominate or overpower the other party. In a partnership system, power is shared rather than wielded over others, which creates a "high trust" culture.
Traditional organizations are based on just the opposite -- systems that legitimize domination -- where a person at "higher levels" has been given the right to exercise power over others, unilaterally, without their consent. It's a system predicated on the inequitable distribution of power and authority that is fundamentally "antidemocratic." Hierarchies of personal dominance are built into traditional organizations like a fractal pattern that is replicated at every level and in every function. Shareholders have power over senior managers. Senior managers have power over middle managers. The middle level has power over the first line. First-line supervisors have power over employees. As everyone is organized to look down rather than out, all this power meddling and micromanaging leads to an inward focus. Customer requirements are ignored and forgotten. Opportunities for growth and innovation are missed. Human capabilities are squandered and wasted.
In traditional organizations, responsibility for control and coordination is always located at a higher level of authority. Indeed, the design principle is based on centralizing authority, which leads to an authoritarian, fear-based culture. The hierarchical order that is put in place in traditional organizations is held together by a pattern of behavior based on deference to authority. Those on the lower end of the totem pole bow down and kiss up to those at higher levels. This authoritarian arrangement is dangerous since those on top can willfully ignore and deflect any information coming from subordinates. Authority of position gives managers immunity from competence. As Philip Slater (1992) points out, "this is one of the many reasons power so inevitably corrupts."
Authoritarian leaders become more and more insulated from the real world of the organization. Those at the top rarely have a clear or accurate idea of what is really happening below them because subordinates will distort and filter information as it travels up the hierarchy. Subordinates, wanting to look good in the eyes of their superiors, will tell those in command what they want to hear. "Things are going great, everything is under control." Indeed, the higher one moves up the hierarchy, the more things look good. And, after all, since I am in charge, things must be going well.
As one might suspect, genuine and effective partnerships can never really develop and mature in a traditional hierarchy. Shifting from a dominator to a partnership system requires a deep change in the organization's design principle -- the genetic code that instructs how structures and processes should be organized to achieve its goals. The self-managing organization is built on the democratic design principle, shifting from a command-and-control hierarchy to a partnership work system, where equality between levels and individuals becomes the norm. In a partnership work system, different groups and individuals may perform different functions, but no one is considered "superior" or above anyone else. It is only by fostering norms of equality that real trust and genuine partnership can emerge.
But let's be realistic. If individuals and groups are going to be given more latitude, more autonomy and responsibility for making their own decisions, as well as more freedom to be creative, we can't just throw control and order out the door. The result would be complete anarchy, total chaos, and too much disorder -- as people would be working at crosspurposes with each other. There would be no sense of alignment or social coherence. Because the self-managing organization is designed to provide people more autonomy and creative latitude (raising the level of disorder), the level of order must be raised too to prevent the system from spinning out of control. But that order is not imposed from above or through a traditional command-and-control hierarchy that suppresses differences and makes everyone slavishly follow the rules. Rather, the order emerges as partnership and trust are established -- indeed, partnership and trust are the social glue that keeps the system coherent.
A RADICAL CHANGE
The self-managing organization requires a radical change in the design and management of the enterprise. The shift to self-management involves uprooting work arrangements and authority structures that have enjoyed immunity from fundamental change under the protection of a dominant hierarchy. Deep, system-wide, and democratic change can cause distress, anger, and resistance among those who have become accustomed to the status quo. Yet in a world where discontinuities and unexpected change are the norm, attachment to the status quo and complacency with past success can be suicidal.
Self-managing organizations are designed to be dynamic and open to change. They are designed to strengthen the competitive advantage of the enterprise by enhancing the knowledge, skills, and investment of all employees. In self-managing organizations, there are no clear-cut divisions between those who manage and those who are the managed. Rather, everyone in the enterprise community is viewed as having full membership status, with a real share of the voice, and with a legitimate right to fully participate in the management of his or her own work.
Copyright © 1998 by Ronald E. Purser and Steven Cabana
Reading Group Guide
1. Why has the self-managing organization become more important in today's knowledge work economy? What are some of the driving forces toward self-managing enterprises? What are some of the historical forces that may impede efforts toward self-management in organizations? How does the concept of self-managing organization differ from teams and empowerment programs? What are some of the defining characteristics of self-managing organizations? What are the competitive advantages of a self-managing organization? (Chapter 1)
2. How is the Participative Design method different from other redesign methods such as Reengineering, TQM, Socio-technical Systems? Why is direct participation of employees important to the success of any major redesign or organizational change effort? (Chapter 3)
3. What is the difference between the bureaucratic and the democratic design principles? How do organizations need to be structured differently if they are to become fully self-managing? How do our traditional notions of hierarchy impede attempts to fundamentally change the organization's design principle to self-management? Why does a traditional command-and-control hierarchy often remain in place, despite the social and economic benefits of self-management? Under what conditions or circumstances may self-managing organization structures be inappropriate or ineffective? What are the psychological and emotional challenges of changing to a democratic design principle? (Chapter 4)
4. How does one engage a large organization in the process of changing to self-management? What are the common pitfalls and traps that organizations often fall into in their attempts to move toward self-management? Why doesthe means or method of bringing about fundamental change need to be congruent with the ends one is trying to achieve? Why has the majority of reengineering efforts failed to sustain fundamental and lasting change in organizations? Why do teams at the operational level often fail to mature and diffuse to the entire way the corporation is managed? Evaluate your own redesign or change efforts in light of the Competing Organizational Paradigms in Figure 5.1 on p.128. What inconsistencies can you identify that have blocked or impeded your change initiatives from succeeding? (Chapter 5)
5. Why should the strategy creation process be opened up to more employees from different departments and levels in the organization? What are the benefits? What might be the downside? Evaluate the merits and potential of the Search Conference method for building a shared vision? How have other companies like Motorola, Microsoft and Charles Schwab applied this participative approach to creating strategic change? How does this strategic planning method differ from other and more traditional approaches? Discuss how your organization might benefit from utilizing the Search Conference method for various planning and organizational change purposes. (Chapters 6 & 7)
6. What does it take to lead and sponsor a large scale Participative Design effort? What steps are necessary before committing and engaging the organization in a full-fledged Participative Design process? What resources are required? (Chapter 8)
7. What can we learn from companies that have taken the journey toward changing their whole enterprise to a self-managing organization? (Chapters 2, 9, 10)
8. How does senior and middle management's role change in a self-managing organization? What is your understanding of a hierarchy based on competence rather than on position or personal dominance? What may be some of the challenges and difficulties for managers in making the transition from a traditional to a self-managing organization? What about for employees? What types of support and education will be required to help make the transition? (Chapter 11)
9. Evaluate whether the leadership in your organization believes that people desire to grow and keep on learning on their jobs. Is your organization willing to help people to develop greater confidence and competence in making their own decisions? Does the leadership in your organization value the developing people to move to higher levels of performance? Or does your leadership only look upon people as interchangeable parts? Is the leadership in your organization willing to admit that it does not have all the answers and will need to learn and allow other people to learn for self-management to mature and develop? (Chapters 11)
10. Evaluate the comments and points made in the Epilogue. What do you agree with? Disagree with? What are some other issues that were either not raised, or only partially addressed, that need further exploration? (Epilogue)
Once there were pyramids, departments, leaders, troops; now there are webs, nodes, communities, networks. Once there was continuous improvement and incremental change; now we see continuous discontinuous change. We've shifted from economies of scale to economies of time; from fixed boundaries to open spaces. Information and knowledge have redefined our economy, and technology has compressed the time needed to obtain information, innovate, make decisions, and initiate action. In this new world of high-velocity businesses and market economies, new forms of organizational design are emerging. They are fundamentally altering the nature and agenda of management.
While industrialized nations are shifting quickly to a new market economy, many companies are having to play catch up. The command-and-control paradigm is alive and well in most organizations today, perhaps disguised in more participative management styles, but still entrenched nevertheless. This is why many senior managers get frustrated when the marketplace demands change and the organization is inept at meeting the challenge. Today's tuned-in executives want the company to adapt to the marketplace as fast as the marketplace changes. These executives know that the traditional model of organization is a recipe for disaster. A new model of the self-managing organization operating under similar principles as the new economy and the new information technologies is what they need for their competitive strategy.
Organizations that fail to replace bureaucracy and command-and-control hierarchy with responsive market mechanisms and self-managing, self-organizing network structureswill be replaced themselves; they will not survive. As technology networks spread, so will social networks, which will supplant hierarchy and become the means by which the organization does its work. This book is about building organizations that align with the new knowledge economy and reconfigure themselves as fast as the economy changes. It is about providing individuals the power, knowledge, and skills to adapt to the changes taking place in the business around them. It is about people learning to self-organize in order to respond to the demands of the marketplace.
The notion of a self-managing organization is not new, but its time has definitely come. A half century ago, two pioneering social scientists, Eric Trist and Fred Emery, articulated the principles and design of self-managing teams as alternatives to the command-and-control work structures of Taylorist theory. There have been decades of experimentation and slow migration to this new form of work organization. Although positive performance differences when compared to traditional work systems are well substantiated, it has taken the widespread use of information technology for the self-managing work structure to be recognized as the new organizational paradigm of the network age.
Ron Purser and Steven Cabana provide both theory and practice for designing the self-managing organization. They have for the first time combined a substantive explanation of the design principles underlying self-managing organizations with two primary planning and design approaches, the Participative Design and Search Conference methodologies. These approaches have gained widespread appeal and usage due to the success they have experienced with organizations around the world. The Self-Managing Organization is an important contribution for those seeking to transform traditional command-and-control organizations to new high-performance work systems.
This is not yet another book about teams, as the authors make an important distinction between self-managed teams and the self-managing organization. In the self-managing organization a multitude of structural configurations can be creatively designed to align with the firm's strategy that are not limited to what many envision as the self-managing team typically found in manufacturing environments. Moreover, the self-managing organization has the ability to self-organize or reconfigure according to market demands, respond flexibly based on principles of redundancy and variety, and gain commitment from its members. The design principles presented in this book are the "DNA" the organization design; they may result in various structural forms, such as global virtual customer solution teams.
As we move into the future, this new form of organization will be an important source of advantage. At the enterprise level, the challenge is to design the human infrastructure for self-management that regulates its processes through market mechanisms and is enabled through information technology. How an organization develops, combines, and leverages its core competencies to support its strategy will in most cases make all the difference in the world in terms of marketplace success or failure. Self-managing organizations are future-focused, designed and oriented to satisfy the evolving needs of its customers, and have the ability to demonstrate flexibility with speed. In many cases the search for advantage through fast and flexible structures will be a search to overcome the inadequacies of the current hierarchical organization.
Self-managing, self-organizing network structures are adaptive to the market. Decision making is not bottlenecked at the top, but is in the hands of the people who manage the work and are closest to the customer. This is the secret, intangible, and untapped source of competitive advantage. Reconfigurable organizational capabilities -- self-managing network structures that are matched to the needs of the customer -- will inevitably surpass traditional organizational forms. People who have the power, knowledge, information, and skill to manage these networks will also be the ones who enable fast, flexible decision making. Indeed, The Self-Managing Organization may in the long run be the only real sustainable source of competitive advantage.
Director, Strategic Change Services Hewlett-Packard
Palo Alto, California
Copyright © 1998 by Ronald E. Purser and Steven Cabana