Successfully transitioning to the self-managed enterprise

In a wide range of industries, sizable corporations now successfulluy operate on the principle of real employee self-governance. The organizational practices employed are a radical departure from those commonly applied in hierarchical organizations. Sun Hydraulics, a hydraulic valve manufacturer operating on a global level, is a case in point. This firm has no departments specifically dedicated to quality control, planning, or purchasing. Instead, operators organize themselves to achieve the targeted results. But this doesn’t stop Sun from being valued at some $1 billion on the Nasdaq and enjoying a strong reputation for quality and service. Similarly, Morning Star is the leader in the U.S. tomato processing market, with a self-managed organization. Morning Star employees successfully negotiate the allocation of assignments and the setting of objectives directly with their colleagues. These two companies have operated according to these holacratic principles for over four decades. Many such examples demonstrate the economic relevance of self-management. Beyond the ethical considerations that motivate its promoters, this model generates particularly high employee engagement and confers great agility in the field—enough to get traditional organizations to sit up and think seriously about moving in the same direction!

But how can you make the transition from a hierarchial model to self-governance? To produce the desired outcome, the transformation must be radical. Decision-making must be placed squarely in the hands of operational teams, rather than going through hierarchical channels and central functions. And that’s enough to destabilize anyone, regardless of their role in the organization! Feedback shows that there is no one-size-fits-all holacratic model, any more than there is a standard path to transition to self-management. However, studying real cases can help to identify the types of change needed. It also underlines the decisive importance of high-quality support during the transition, and shed light on risks to be monitored and a few fundamental principles to guide companies in successfully completing this undertaking.

In this synopsis:
- Four fundamental premises of the self-managed enterprise
- The holacratic company: five keys to a successful transition to self-management
- The self-managed enterprise in practice