The 28th Leadership Lounge: Self-organization in companies

There are no superiors in the so-called company self-organization. Instead, the employees manage themselves and organize their day-to-day work independently. The idea is currently the subject of heated debate. After all, it seems to take a lot of courage and trust to dispense with management and assume that the employees are acting in the interests of the company, even if no one controls them. And of course it is to be expected that things will go wrong during the changeover phase.

At our last Leadership Lounge, we gained insights into this form of organization through the exciting presentations given by the invited speakers. We would like to report on this here.

The Leadership Lounge is a networking event that we organize 3 times a year. We invite experts to report to us on a specific topic. These are, for example, professors who bring us closer to scientific aspects, managers who report on their practical experience or founders, coaches and human resources employees. The topics of the lounges are located in the field of tension between digitalization, globalization, Industry 4.0 and the working world of the future.

After the lectures, our cooperation partner, the SEMINARIS CampusHotel in Berlin-Dahlem, will serve a delicious buffet and wine. Participants can discuss the topics of the event in a relaxed atmosphere, which is always popular. Networking happens all by itself.

More and more organizations are now relying on working with self-organized teams. However, it is a major challenge to gradually transform a company with rigid hierarchies, bureaucratic processes and formal rules into a self-organized, agile organization: Managers are expected to initiate and accompany this transformation, but without knowing exactly what their role will be after the transition. If leadership is abolished – what will become of you? And if managers do not change themselves, they can become an obstacle rather than a motivating factor. Motivation is important, however, because the fundamental prerequisite for a change towards self-determination is employees who want to make their own decisions and take responsibility.

Prof. Dr. Günther Ortmann holds a research professorship for leadership at the Reinhard Mohn Institute for Corporate Management at Witten/Herdecke University. Together with Dipl.-Pol. Marcel Volland, Professor of Organization and Corporate Management at the University of Hamburg, he has been supporting the research project “Hierarchy-free leadership” at an international corporation for some time. The company started the introduction of agile structures with the Research & Development department. Agile islands soon emerged and spread throughout the Group.

The professors observed what happened when a new division in a company was not organized but allowed to find its own organization. It turned out that some employees found it difficult to take on responsibility. The researchers recognized that the elimination of hierarchies and positions of power does not mean that structures, roles and rules become unnecessary. On the contrary: they are needed to make it work. Surveys revealed that an informal system of rules had developed in the original company anyway, as the existing rules tended to prevent employees from doing their work well. On the way to agility, the previously subversively applied, self-organized rule system was adopted and old, obstructive rules were abandoned. Another finding was that task forces were a first step towards testing agility, as the team organized itself without a tightly defined framework.

Moritz Polomski, Agile Coach at Movingimage24 GmbH, Berlin, reported that self-organization is not just a “nice-to-have” in his company, but a basic prerequisite for being competitive in today’s fast-paced world: “We can’t afford to take longer than an hour to respond to our customers’ feedback. They expect an immediate response!”

Immediate reactions are required, especially in the digital sector. It is not possible to pass a decision through several departments in terms of time. The software company has abolished its hierarchies and given its employees maximum freedom to make decisions. If several competencies are required, the team decides together. The international employees work in a self-organized manner; among other things, they use Scrum for this. This way of working is attractive to employees – and that is important, because software developers are highly competitive employees who you naturally want to keep in the company.

Moritz Polomski described how difficult it was at first to get out of the old, entrenched routines and rules and create a self-organized team and an agile way of working. However, the distribution of management tasks has continuously improved, meaning that employees have gradually taken on more responsibility. Whereas plans were previously made that were largely fixed from start to finish, an integrative approach gradually became established, i.e. a step-by-step approach to the solution. The company’s efficiency increased.

Through self-determination, the company has achieved two effects: speed and motivated employees – the foundations for success.

The third speaker was David Cummins, Managing Partner of Ministry Group Management Holding GmbH in Hamburg.

Following a management buy-out in 2012, Ministry GmbH was facing a new beginning. Their credo: “We want to have fun at work and be proud of what we create!” Success soon led to growth and with 45 employees, new structures were needed. Traditional hierarchies were out of the question, so the decision was made to introduce self-organization in the company; agile working methods were introduced. It didn’t go smoothly straight away: employees demanded clear instructions and doubts arose as to whether self-organization was the right thing for the company and its employees.

David Cummins has learned a lot from this. For him, AGILE is an attitude, a mindset – but by no means a structure. If there is no agile culture in the company, i.e. if employees and management do not think and act in an agile way, then agile methods will not work, says Cummins. It takes motivation and personal responsibility. This means that working on the corporate culture, on the attitude of everyone involved, is fundamental. Cummins also noted that “self-organized” does not mean “leaderless”. Even in self-organized companies, leaders are still needed to take on certain tasks. However, they do not hold a position of power and are not more senior than the other employees. – On the contrary: Cummins sees its management as a service team that enables employees to do their job well. This includes tasks such as knowing the values and goals of the organization and communicating them to the team, knowing the needs of the team and providing support, for example by removing obstacles. Of course, the management also ensures that communication can flow within the company and that all information is made available to employees. His management also dares to experiment. The current one: Unlimited vacation – as long as the tasks are all completed.

The goal: fewer rules, but more flexibility and responsibility. Because this brings creative results as well as performance and joie de vivre.

Self-organization is an exciting topic that we would like to explore in more detail: A comprehensive article on the subject will be published shortly.

Until then, we recommend that you read the following articles: