Empowering Employees: the Benefits of a Self-Managed Workforce

Exponential growth in technology is on the rise and companies are in the midst of radical change. In fact, technology is so pronounced in todays’ workforce, that new trends are beginning to develop as a response. Such trends include a lack in motivation where there is a greater divide between those lacking opportunity and those with unlimited opportunity. The level of productivity in many work environments has been declining at an accelerated rate while others are increasing in productivity. At the core of these trends, it is has been recognized that the workforce preferences and workforce expectations have been frequently misaligned. The occurrence of an aligned workforce happens when people, the work they do, the environment within which they work and those whom they serve—in relationship to each other—fulfill a shard purpose in a principled and productive manner. The result of aligned workforce practices develops into a strong self-managed workforce that caters a relationship between technology and its people. Thus, a self-managed workplace becomes a hub for fostering innovation that is able to adapt to change.

To understand a self-managed workforce, one must first understand the historical movements that have led up to it. The Industrial Society was composed of a workforce that benefited by receiving an education, entering a profession and developing a career. Anywhere between the 1800s to the 1990s, the industrial society was composed of a vertically based hierarchical structure which provided many benefits for the workforce of its time. Some of these benefits include stable incomes, opportunities to develop, and contributions to the community. However, technological advancements continue to change and develop. Change is something that will continue to be dynamic and impact how work will be performed and managed. The Industrial Society was the cornerstone of an established vertical structure with distinct levels of authority for direction, responsibility and control of work. This structure was shaped like a triangle in which Managers were at the top (those who influence and plan the work), Supervisors were in the middle (those who coordinate the work), and Workers were at the bottom (those who do the work). This hierarchical structure provided a means for transition from agricultural work based upon the family unit with individual autonomy and craftsmanship to the man-machine interface for mass production. It provided the workforce with support and clarity to learn and implement new ways of thinking and applying new skill sets.

Transitioning from the agricultural age to the industrial age was not only a big change for the structure of the workforce, but also provided insight as to how technology played a role in work flow. Farmers now had to learn new specializations that were required to meet the changes of technological demand in order to maintain a livable wage. This vertical structure was viable and vital for the Industrial Society and even remains with many start up organizations, when a work environment is needing to navigate rapid or complex change with new technologies, processes or highly regulated procedures and principles.

During the post-World Wars I and II, the economies began to grown and industrial organizations in several counties reaped the benefits of increased opportunities for people at all levels of work. The people had specified job requirements and responsibilities that outlined their career progression. Loyalty and hard work were rewarded with job and pay security. Much of the workforce were well paid and protected with union contracts or tenured security, while others aspired to “climb the ladder” into the supervisory and management levels of the vertical structure.

The time period of mid-1990s to Early 2000s is known as the Information/ Technology age in which change is of the essence and people are exposed to new technologies and unseen work processes of the future. As Thomas L. Friedman discusses in his book, The World Is Flat, the fall of the Berlin wall in 1989 revealed forces that have been developing over time to create greater global economic security through increasing cross-national activities.

Trade negotiations commenced around the globe and began to move rapidly into the mid-1900s. The signing of the North American Free Trade Agreement (NAFTA) in January of 1994 affected the U.S. workforce with the experience of lower tariffs and increased trade between countries. In reality, this agreement posed huge challenges because many U.S. manufacturing plants closed and workers were laid off. Corporations discovered more profitable means of manufacturing by importing quality products from Mexico.

In the midst of the 1990s, a similar flow of capital, labor and product transfer was replicated across more advanced nations, Germany, Italy, Great Britain and the U.S., to countries such as Mexico Eastern Europe, Turkey, China and India. As trade began to transition from low-skilled, labor-intensive manufacturing jobs to high skilled labor, it changed the expectations and preferences of the workforce. This development also went from manufactured products to a variety of direct and back-office service operations in a wide range of industries, professions and applications.

Challenges in work flow began to arise because of exploding forces of information and accessibility for people around the globe. The vertical structure essentially began to “tip” as a means of adjusting to this technological boom.

Fostering Innovation

The reason why companies have transitioned away from the vertical structure workforce to a self-managed workforce structure is to have greater agility and integration of new forms of work processes. Such changes include, but are not limited to:

• Standardized work processes for global continuity
• Web-based interfaces and virtual offices
• Outsourcing and global resourcing for on-demand delivery
• Matrixed and networked environments with dual or multiple reporting structures
• Continuous re-engineering of work processes to compete proactively
• Cross-platform teams structured around product lines, cross-processes or customer
• combinations
• Robotic and remotely operated means of performing work activities and producing
• products
• The increase of 24-hour, seven-day-a-week work environments

With new workforce changes comes greater importance in fostering innovation. Innovative technologies support new ideas for products and services, gives staff members a sense of job satisfaction, encourages teamwork and allows organizations to find competitive advantages in the marketplace. In order for new technologies and innovation to succeed, it must be embraced throughout the entire workforce.

Changing to a self-managed work force allows ideas to flow more freely which can lead to creative ways to improve existing products and services, or to create new ones. Allowing employees to innovate keeps them motivated and actively invested in the organization’s success. Fostering innovation and creating an environment surrounded by new technologies and constant change also keeps companies ahead of the competition. Companies are continually faced with challenges of meeting consumers demands much faster than in the Industrial Age. Innovation imbedded into the self-managed structure allows companies to respond quicker to changing marketplace conditions.

Self-Management Structure

A self-management structure simply means that there are no human bosses present in the workforce. Instead, they view the company’s mission statement as their “boss”. When self- managed workplaces first arose in the 1990s by the Morningstar corporation, it was seen as radical because typical businesses had a foundation of a hierarchical structure. The reason why Morningstar adopted this principle is because they recognized a trend throughout the American workforce. According to the Gallup corporation, about 30% of the American workforce was engaged and inspired at work. They go on to say that 20% of the workforce are actively disengaged and uninspired. They link this disengagement to their bosses and managers. Workforce disengagement does not sound too catastrophic at first, but the cost of active disengagement is anywhere between 450-550 billion dollars in lost productivity. The goal of a self-managed workplace is to simply move away from the triangle-type structure and implement a network model where information has the ability to move at the speed of light.The foundation of a self-managed workforce is built upon two human principles: 

1. humans shall not use force or coercion against other human beings;
2. people should honor the commitments they make to others.

When both these principles are met, the workforce will achieve happiness, harmony and prosperity. Of course, with any new structure comes its’s pros and cons:

Pros

• Freedom
• No one can be fired
• No one can direct activities of others
• Leadership is earned through trust, communication, respect (there are no titles)
• Self-management is power meaning that employees have all the power they need to be successful and thrive
• Work is apart of life and it’s made to be fun!
• Equal voice
• Network instead of a vertical hierarchy which is self-healing and can easily be rebuilt
• Information travels freely
• Innovation can arise at any point

Cons

• People who like to give orders do not thrive because people are not required to listen (may cause stress and frustration because they feel like they are not being heard)
• People who lack initiative struggle (requires active communication which may not be their strongest trait)
• Possible loss of control because workers who are disgruntled cannot get fired even though it is not helping the organization

When Morningstar adopted a self-managed workplace, they found that the pros greatlyoutweigh the cons. In fact, they were able to expand a lot faster and their employees were able to adapt to such changes. Combining technology, a positive and engaging work environment, and equality simply allows companies to adapt to changing markets, customer demands etc. Doug Kirkpatrick believes that self-management goes beyond empowerment because empowerment implies that one person with power is lending their power to a subordinate who has less power. He goes on to say that what is loaned can be repossessed and people in a self-managed work force already have all the power they need. Self-management is power itself because the arealready able to acquire resources, build relationships and do their best work.

People in a self-managed workforce are the types of people companies need in order to foster innovation, generate new ideas, and implement new technologies. In fact, much of workflow today is rooted in technology. Companies continually have to find new ways to reduce their overheads while creating new products and services. Workflow technology consists of software and methods that could improve the way business processes are captured, re-engineered, optimized and automated. A technology such as this promotes organizational change, encourages the business process reengineering, provides a clear-cut definition of the business process and allows workflow simulation, proper decision making and document routing. Of course, there are many other technologies companies in a self-managed workforce implement, but this provides a snapshot as to how technology is being used with a structure or network such as this.

In conclusion, a self-managed workplace becomes a hub for fostering innovation that is able to adapt to change. Allowing people of all different positions, backgrounds, and preferences to come together creates a stronger and more diverse work environment. Bridging the gap among different departments and giving people the access and resources to succeed is what drives the evolving Information Age. More and more organizations today are adopting these new principles because they want to increase employee satisfaction and experience the benefits it has to offer such as customer satisfaction and an increase in total profits. No longer do we need to ask, “If people know how to do their jobs, why do they need a boss?” or “Why aren’t employees allowed to make decisions when they make life altering decisions every day?” Clearly, people of the workforce are capable of being satisfied by the work they do, but having the resources, technology, and work environment to bring it to live makes it all the better.

Resources

• Bernstein, Ethan, et al. 'How Self-Managed Companies Help People Learn on the Job.' Harvard Business Review, 3 Aug. 2016, hbr.org/2016/08/how-self-managed-companies-help-people-learn-on-the-job.
• 'Beyond empowerment - are we ready for the self-managed organization? Doug Kirkpatrick at TEDxChico.' YouTube, 3 Dec. 2013, www.youtube.com/watch?v=Ej4n3w4kMa4.
• Criado, M. (n.d.). A Research Agenda on Open Innovation and Entrepreneurship: A Co-Word Analysis. ProQuest. https://doi.org/10.3390/admsci8030034
• Friedman, T. L. (2005). Farrar, Straus and Giroux: The world is flat, a brief history of the 21st Century. New York.
• Frishammar, J. (n.d.). Opportunities and challenges in the new innovation landscape: Implications for innovation auditing and innovation management. European Management Journal. https://doi.org/10.1016/j.emj.2018.05.002
• Heskett, James. 'Are We Ready for Self-Management?' Harvard Business School Working Knowledge, Sept. 2006, hbswk.hbs.edu/item/are-we-ready-for-self-management.
• Laperche, B., & Liu, Z. (2013). SMEs and knowledge-capital formation in innovation networks: a review of literature. Retrieved from https://innovation-entrepreneurship.springeropen.com/articles/10.1186/2192-5372-2-21
• Mclntosh- Fletcher, Donna, and W Thomas Mclntosh- Fletcher. Realizing the Promise of Work. The McFletcher Corporation, 2013.
• Noth American Free Trade Agreement (NAFTA). (2010). Retrieved from http://www.fas.usda.gov/itp/Policy/NAFTA/nafta.asp
• State of the American Workplace. (n.d.). Retrieved from Gallup website: https://www.gallup.com/workplace/238085/state-american-workplace-report-2017.aspx