Top 10 Myths About Democratic Management

Why You Can’t Do Away With Power Structures, Only Change Them

There are many misconceptions about self-management – but the one that’s quite persistent is that there is no structure and that there are no leaders in these organizations. However, that’s far from the ground reality. Organizations that choose the self-management route aren’t places of anarchy where everybody does whatever they want. There are power structures in these organizations too – but they exist in structures that are almost flat with very little layers.

This kind of power structure exists to manage the company, but it is not necessarily dictated by the hierarchy. Let’s back up for a moment and look at the traditional power structure – it’s typically pyramidal and the power is concentrated at the top. This power, then, slowly trickles down the layers towards the large proportion of the company.

Moving From Pyramids To Circles
At Semco, which chose the self-management route back when it wasn’t all the rage, the power structure followed a different pattern – that of concentric circles and there were usually three layers. Each of the three layers represented a category, such as executives, leaders and the team.

There’s a lot to be gained by making the switch – when a company avoids the pyramidal, command-and-control power structure and adopts the concentric circles power structure, it immediately eliminates loss of information between layers. But more importantly, it prevents the loss of autonomy among employees, which is often the result of miscommunication that is a constant in multi-layered, top-heavy power structures.

But nobody said it would be easy. In fact, making the switch and deciding to focus upon coaching, facilitation, people-centric management and developing a peer-to-peer relationship is easier said than done. Initially, it will be uncomfortable to co-exist in a flatter structure, especially for those who’re traditionally middle managers. However, when this transition is managed well, the long-term value to the organization and its culture will be undeniable, showing itself through greater engagement, better trust and higher work satisfaction.

How Semco Scaled Down Power
When Semco began its transition towards self-management, back in 1988, it had a tremendous traditional power structure to scale. To be precise, the company moved from eight layers of hierarchy to just three. The eight layers, began with the intern being at the bottom-most rung and ended with the CEO at the top-rung and the layers in between had positions like junior analyst, senior researcher, group manager etc.

While it only took a few months to formally kick-start the transition and create a process to make the switch, the actual implementation took much longer. In fact, the full system took about two to three years to be overturned. But, the benefits of better alignment and deeper collaboration were there for everyone to see as the different phases of the transition unfolded.

Create Room Not Layers
When you create a flatter power structure, you’re doing a lot more than simple organizational redesign. You’re breaking through the invisible silos and promoting collaboration between people and teams in ways that were unprecedented. By shortening the number of layers in the hierarchy, you’re birthing an organization that’s more agile and flexible. But, most importantly, you’re creating an organization that progresses as one, with less room for misunderstanding and all the room for phenomenal growth.