Humanizing Business with Agility
Humanizing Business with Agility
“People have a reservoir of talent worth discovering. They just have to be given the opportunity to discover it in themselves.” – Ricardo Semler
Humanizing Business: The Future Of Work Started 40 Years Ago
1980: that’s when the foundation was laid for Semco Style Institute and for the passion we put into creating people-centric businesses today. When Ricardo Semler took over Semco, a Brazilian Manufacturer company, he literally redefined the concept of employee empowerment. The management style that Ricardo evolved through years of experimentation proved to be massively successful. The company defied gravity with the rate of its growth, even when the rest of the country was suffering a savage recession. Today, many Semco Style practices are being applied by organizations across the world.
Do you really want to become Agile?
Many organizations today are also seeking new ways of working, under the umbrella of agility. Why? The reasons vary and are probably not always clear. But change is omnipresent, many industries have been disrupted, and the COVID pandemic has emphasized the importance of being able to adapt and change quickly. Some organizations are also pursuing Agile because of their fear of missing out or because they believe they need to pursue the latest management fad. As often with management fads, the original intent gets watered down or distorted. So, the fundamental question then becomes, what do people really mean by Agile? And why do they want to be Agile? One key problem with typical management fads is that the fundamental paradigm of command and control remains unchanged. Simply following certain processes and renaming certain roles does not make an organization Agile. For example, going through the rituals and routines of Scrum does not automatically make an organization Agile. Besides, if only certain pockets of the organization adopt a new paradigm the impact is limited.
One key element of agility is self-organization. Kaltenecker (2018) states that “Many companies dream of business agility, but this is impossible to achieve without self-organization”. He, in fact, views Semco´s evolution as one of the most spectacular examples in the history of self-organization and starts his book on self-organizing enterprises with Semco as an example. Semco is not the only self-managed enterprise that people can learn from, but its transformation imparts a few key lessons that can impact business agility. Here are a few unique elements that you can take into account when moving towards a more people-centric organization, for both teams and managers:
Management: Stop controlling people, start being in control
Among the pioneering companies around the world that are brave enough to consider turning their organization upside down, we often see this barrier: leaders focus on what they will lose. In managerial positions, loss of status, influence, and ego may seem apparent. But leading a new way of working may actually benefit all these aspects, once leaders realize they can step out of the management trap. And although it’s called the management trap, it actually works only because both employees and managers get stuck in it:
Employees feel they have great colleagues in their team but are not confident about the capabilities and contributions of the management team. Also, they feel they deserve more autonomy and more room for making decisions by themselves without getting hindered by bureaucratic corporate red tape. And, during the workweek, they await better times, always longing for the weekend.
The leaders, on the other hand, feel they are taking up all the responsibility, and that ownership, innovation, and entrepreneurship from employees are rare without managerial support. All this managerial involvement in the everyday tasks of the team leaves the management feeling they are too busy to work on what’s important. So, actually, nobody feels like they have a role they would aspire to. This is the management trap – for smaller firms, it’s the founder’s trap.
It is time to step out of the trap. There are few people who are more relieved than a manager who has broken out of the stressful trap of micromanagement and control. So, here’s an interesting question: What will this newly redefined manager consider symbols of status, matters of pride, and influence? Some of the answers we’ve encountered are: more impact, more outward focus, and more time for strategy and innovation. And even a sense of pride about the new ways of working they’ve discovered.
Enable teams to make better decisions every day
Teams can take up responsibility for many roles and procedures that would traditionally reside with managers if you enable them to do so. These are the key learnings we discovered from putting this into practice:
There is a strong connection between the degree of participation and motivation in teams. In other words, employees are more motivated if they’re given the opportunity to actually participate in – at least a part of – the decisions made by their team and organization. If people are allowed to participate in the decision-making process, they also ensure those decisions are carried out.
The success or failure of a team depends on how well the team members know each other. Many teams, therefore, hold in-depth personal introduction sessions where trust and psychological safety are key. Team members must also have clarity about their roles and responsibilities so that the team can adjust if they experience, for example, rapid growth or setbacks.
Teams will have to develop mechanisms to resolve conflicts themselves and mutual trust is essential to make this possible. Employees must be able to comment openly and without fear of repercussions. Only if team members cannot solve a problem by themselves, is it wise to seek help externally.
Giving feedback is no longer the manager’s sole responsibility. Teams become stronger when they understand how to give and receive feedback from each other. With this in mind, you can organize easily accessible feedback sessions. These feedback sessions will also help to focus on continuous improvement; do things a little better every day.
Teams have to gradually develop their own decision-making strategies. As soon as teams are made responsible for their own decisions, it is important that all required information is transparent, comprehensible, and readily available. A team must be able to make quick, expert decisions. Team members should, therefore, investigate what works best for them and realize that it is impossible to always reach a complete consensus. The absence of major objections should be sufficient ground for decision-making.
The personal development of employees should also receive attention. If there is no room for personal growth, there will be no growth as a team. To develop leadership skills in the group, it works well to periodically appoint a different team leader/ spokesperson.
In practice, we see teams are often afforded the opportunity to determine their own salaries or bonuses or make decisions about strategic direction very early on. These are certain responsibilities the team should be given. However, it seems that teams – certainly in the early stages – often lack the experience required to hold these conversations; make decisions about these topics; and gauge and accept the consequences. For teams, this step towards self-management is one that often requires time and guidance.
Human-centered leadership: more important than ever
The COVID pandemic has forced many organizations to take their first steps toward offering greater flexibility to their employees. We can safely expect a new focus on mutual trust and ownership between management and employees. The temporary measures organizations have put in place for working from home can act as catalysts for lasting change. Now is the time to take this to the next level and truly create human-centered organizations. Leaders now need to answer one fundamental question: what do we want to put first? People or profit and growth?
To wrap up, here’s another one of Ricardo’s quotes to answer that question:
“Growth and profit are a product of how people work together.”