German Version

Preface

2 years ago I published a blog post on Myths of Self-Organization, after talking to several leaders who told me, how the introduction of self-organization reduced the overall performance and made their best people leave the company. Many of them were celebrated as glossy hero-role-model organizations by the media, but the look behind the curtain was rather frightening. My intention was to warn leaders and help them find a more healthy approach to this hyped topic self-organization. The resonance I got was incredible: the article got viral and a german management magazine published a new version I wrote for them in 2018: it became the most downloaded article of the year.

I was invited for key-notes at conferences and it seems that I nailed it down: people thought it was a big relief that someone came up with a different version of self-organization: most of them didn’t dare to utter their concerns, as they didn’t want to look like the old-fashioned managers, who didn’t want change or wanted to hold on to old power structures.

Until now this articles were available in German and Dutch (someone made the effort to translate it on his blog), and people kept asking for an English version. I am very happy to finally share this article in English with the help of my English Editor. The version you find here ist the one, that was published in the german magazine managerSeminare, as it is a little bit more comprehensive than the original blogpost.

10 Myths of self-organization

Self-organization is currently seen as the most promising means for businesses to prepare for the challenges of digitization and disruptive change. However, success is threatened by misconceptions and exaggerated expectations. The ten biggest misconceptions.

These are serious problems that many traditional organizations have to overcome; many business models are outdated and challenged by disruptive innovations, especially from the digital world. The future viability of even those organizations that are (still) successful today is uncertain. The culprits have already been identified: over-fattened hierarchies, rigid organizational structures, sluggish processes and a lack of innovative power in combination with old-fashioned management culture that paralyze the company and prevent necessary changes. 

The answer to many of these problems appears to have been found in self-organization – and the related expectation that hierarchy reduction and agilization will lead to more innovation and market success. As such, more and more companies are energetically making their way into a “New World of Work.” 

It represents what is actually needed: companies able to open up and keep themselves open, to network, to act flexibly, to involve and inspire people. Clearly, we cannot remain in traditional ways of thinking and attitudes and believe that we will achieve new results.

What does not work, however, is agility at the push of a button or self-organization by directive – with the same old thinking and old attitudes of planning and control in the background. But this is exactly what often happens in practice. Although there is a lot of self-organization in the foreground, behind it there are often the same concepts that caused the very problems that now must be solved. Not only is this doomed to failure but also such false assumptions about self-organization can lead to discrediting the necessary opening of companies and reactivating old stress patterns that lead directly back to the old world of hierarchy and control. 

Having repeatedly encountered these misconceptions and exaggerated New Work expectations, I have summarized them in the following 10 myths. 

Myth 1: Bosses must be abolished

We all know them: incompetent bosses who hoard information, delay decisions, believe only themselves and who are, above all, interested in their own progress. They are primarily who we want to eliminate in the context of self-organization; according to the motto “Eat the Rich,” we will immediately eliminate them all. Unfortunately, however, the brakesmen and egoists return in a different form, building informal power networks and paralyzing the organization from the underground. They are the darknet of the network organization.

The problem is not so much that bosses are bad per se, but that there are too many bad bosses. Good managers, if they can be found, are worth their weight in gold because they create and maintain spaces in which people can develop. So, we must not make the mistake of throwing the baby out with the bathwater and thus making – even good – leadership impossible and putting aside the great benefits that it can offer. Instead, we must develop a better leadership culture for all, based not on power and control, but on clarity, competence and integrity.

Myth 2: There is no self-organization in hierarchical companies

Self-organization is not an invention of New Work. We find a high degree of self-organization in very hierarchical companies and a low degree of self-organization in very flat hierarchies. I experienced this in a particularly pronounced form during a consulting assignment at a major Austrian-German-Italian bank. There were all forms of organization existing simultaneously: classic dusty power hierarchies in the foreground or background, project organizations based on them, some departments working in a completely standardized manner, and others with a high degree of self-organization. My own team was composed of employees from various departments who ran huge projects across all areas, regions and hierarchies. Self-organization in all companies is always co-existent with the official structure, in the form of informal networks.

In short, we should not believe that self-organization is something new, nor that these structures are clearly assessed or controlled. They have their benefits, which can be absolutely in the company’s interest, such as in compensating for structural weaknesses or driving forward decisions. However, they always have their own interests, for example when it comes to exploiting a leadership vacuum or continuing to operate old power networks. Agile organizations are not immune to that.

Myth 3: Organizational form determines market success 

We all hoped that self-organized, free and open companies would be the superior and more successful form. However, we are experiencing that completely different forms of success are produced by hierarchical old-school companies alongside hip do-gooders. Amazon, for example, is one of the most successful companies – with a culture built on fear and competition plus pure profit and performance thinking. As can be seen, Virgin has a very humane, excellent corporate culture and is also very successful.

Despite all hope being based on self-organization and agility, crucial factors remain the business model, the product, the market, the brand, the competition, and the technology. And many other circumstances and items over which we often have no influence. From my experience, I cannot even say for certain that great leadership is a guarantee of success. When the product becomes irrelevant, even the best leadership culture will no longer help.

Myth 4: Structural problems can be solved by the organizational form

My favorite myth, which has not changed in the recent 20 years before “Agile” and “New Work” came into fashion, is that fundamental, undesirable developments such as ambiguity, bad leadership, or crippling corporate culture can be remedied through reorganization. But that is precisely the standard response to problems in many companies. The reason is clear, since everyone is busy, feels like something is changing, and internal employment issues distract from annoying questions such as “What is our raison d’être – our true meaning and purpose?” or “How will we earn money in the future?” There are also other questions that remain unanswered, such as: What are the strategic guidelines? What assures our survival? What are we doing against the lack of good and powerful leaders?  

In addition to the unresolved old problems are a few new ones: transitional difficulties, uncertainty, frustration. Overall, one has to say that in the face of impending demise, dealing with organizational charts – or their dissolution – is like rearranging deckchairs on the Titanic. Often it is simply not the point, and it does not lead to the difference that will make a difference.

Myth 5: People feel better without hierarchies

Many people in organizations have very different interests than Agile consultants or New Work supporters: They want a reasonably secure job, an environment in which they feel oriented, and opportunities to help shape a successful company. A boss who appreciates them and nice colleagues, maybe even a varied job and fair pay. For the younger generation, topics such as good work-life balance, a meaningful task and career opportunities are added. They want to learn something and wish for mentoring and leadership.

Many are indifferent to the organizational form as long as it does not hinder cooperation and development opportunities. According to brain researcher Gerald Hüther, people basically need two things to have well-being: a sense of belonging and room for development. The absence of bosses and hierarchies is not essential – as long as they do their job well.

Myth 6: Agility and innovative strength increase when everyone has a say 

If everyone has a say, it can increase agility – if the basic conditions are right. In most cases, however, the exact opposite is the case: endless discussions, the neutralization of interesting and courageous ideas (because someone is always afraid), and in the worst case, the complete paralysis of the company. Not least because high performers are annoyed to go further when everyone – regardless of competence and commitment – has the same voting rights. Because nothing is more unfair for people than egalitarianism.

Even new ideas do not automatically emerge through shared discussion, because systems of any kind have the property of repeatedly creating variations of themselves. Companies are very successful at inventing product variants, but break-through innovations are rather rare. For the truly new, which is not part of the old energy field of the organization, there is sometimes still a need for leadership that decides and determines the direction and that has both competence and authority to do so. This does not mean that the people are not integrated, but rather within a defined framework in which clear rules prevail.

Myth 7: Self-organization leads to better decisions

Among the most prominent principles of self-organization is “Distributed Authority”: Decisions are made where the most competent person sits rather than by the highest-ranking executive. This is absolutely reasonable. I know bottleneck managers all too well, those who grab all of the decisions. And woe if someone does something on his/her own authority that later turns out to be wrong! So, decisions are made too late, not at all or without sufficient detailed knowledge, because everyone is afraid of making a mistake. Self-organization should now solve this problem by decentralizing decision-making authority.

But wait, isn’t decentralization one of the oldest principles of hierarchies? Isn’t that exactly what it’s all about, to delegate competencies to the organization via the levels? Why else would the many managers and specialist groups be needed? That this form of sharing of responsibilities often does not work depends less on organizational design than on the fear of mistakes and the lack of good executives. The problem is usually not that employees have too few competencies, but that they permanently fall short of them. Out of fear. If it persists, there will be no decentralized decisions even in the most agilesettings.

Myth 8: All employees are mini-entrepreneurs

For a long time, the capacities and potential of the employees were underestimated – according to the motto “you have to chew everything for them and control them.” In the discussion about self-organization, we now make the same mistake in reverse: We overestimate the ability and inclination of people to think innovatively and, above all, entrepreneurially. But not everyone has the entrepreneur gene, otherwise s/he might have become an entrepreneur rather than an employee. Not everyone likes having to reinvent their job every day. Not everyone is constantly considering how to increase the value of the business, and not everyone has had great but undiscovered ideas waiting for their agilediscovery.

I worked on a client project where the principle of “Being Entrepreneurial” was considered essential. Apart from the fact that hardly anyone could pronounce that word, the concept was simply incomprehensible to many, even if it was explained very often. That was incomprehensible to me, but that’s the way it is. 

Nevertheless, it remains wise to give people the opportunity to get involved. But you do not have to expect it from everyone and everything. And especially the New Work enthusiasts have to be careful not to draw too many of their own conclusions about others.

Myth 9: Self-organization can be bought

Of course, there are plenty of offers for agile”social technologies” on the consultant market, nicely thought out, with the appropriate blueprints for meeting formats, plug & play, so to speak. The whole thing is then bought by companies, prescribed from above and implemented strictly according to the rule book. Who doesn’t come along can leave.

But that sounds like the exact opposite of self-organization, right? For that would presuppose that a system seeks its own structures and methods and does not simply impose a prefabricated, alien form on itself from the outside. But then no one would have more control over what exactly will transpire, and that seems to be a problem for many. 

There are good and encouraging examples of companies that have taken self-organization seriously. Those who have not given guidelines but rather coached and encouraged their people to get involved and take responsibility.

However, this requires a protected space that makes self-organization possible, a space with few clear guidelines, competencies and goals, but complete freedom over the how – and permission to make mistakes, because without them, it is not possible My experience shows me that precisely the process of finding one’s own form is necessary for the form to function and be accepted. It is an iterative learning process during which the organization acquires important skills. Getting inspiration from outside, learning from others and being accompanied by others makes sense. But if the finished solution is from the outside, if the New Work concept is arranged from above, that is old thinking in a new guise, a contradiction in itself.

Myth 10: Self-organization is a working mode. Who doesn’t want to be agile?

Instead of a manager, there is now a Chief Happiness Officer or a Pilot; everyone works on equal terms, trusts each other and is creative and, of course, motivated. But that is not the whole truth. We hear of Berlin-based startups in which exploitation and abuse of power are the order of the day. We hear of people who prefer to return to hierarchies rather than fight the daily hidden power struggle under the hierarchy-free surface. We hear of agilecompanies in which the secret elites evade their responsibilities, because they have officially handed them over to the organization, and in which innovation standstill, dissatisfaction, and a craving for strategy now prevail.

Self-organization and New Work are not so much a question of working mode or structure, but of mindset, culture, and last but not least, leadership. Ultimately, they are only as strong as the good will of the people involved: A democratic consensus decision is worthwhile only if everyone adheres to it. A culture of discussion works only when those who are supposed to communicate do not consistently happen to have more important appointments. Self-organized division of labor requires that somebody does the boring work as well.

Self-organization as a method does not change anything if the thinking, the attitude behind it does not change. If you would like to make your company more agileand unfold the power of self-organization, you should not think about working forms and structures, but first create a culture of transparency, trust, participation, experimentation, collaboration and networking. 

It is the task of managers in particular to give a clear direction, to define common principles and to agree on simple rules of the game – and above all to adhere to them themselves. This presupposes that they do not interfere too much, but rather create conditions in which necessary structures can form themselves, out of an inner necessity. For self-organization can function only if the structures are created around a clear purpose. And without compulsion. Because structures that have been created on the basis of fear and pressure generate further anxiety, no matter how colorful the office furniture may be. 

TUTORIAL AND GUIDING QUESTIONS

The conversion of a company to self-organization is no piece of cake, because a lot, if not everything, is called into question. Good preparation helps – and the right control questions.

1. Why self-organization?

What problem would you like to solve with it? What goals would you like to achieve? Why is self-organization the means of choice? Why there has been too little of it in your company so far? 
Background: Self-organization is often seen as a panacea for problems that are actually elsewhere and cannot be solved by self-organization (alone).

2. What do you understand by self-organization?

How would you explain it to a six-year-old child? What makes self-organization different/better/worse? How do you measure self-organization? Where are examples of self-organization in your company? 

Background: Self-organization is a buzzword that remains vague, implicitly promising salvation – and therefore, providing an ideal projection surface for hopes, expectations and desires of all kinds. Concretization helps

3. Who helps with the changeover?

Who has a decisive influence on the prevailing culture and opinion? Which people have formal and informal power and influence? Who wins and who loses? Who stays calm in unclear situations, and who uses them? 
Background: Under no circumstances should one naively approach agilization. Companies have long-established practices and power networks that can become more entrenched when “threatened.” Managers must create trust and show interesting alternatives to the lost privileges

4. Cross-check: Is this what you wanted?

What is no longer possible? What are possible “costs” that you have to pay? What new problems do you have that you didn’t have before? Can the same goals be better achieved in a different way?

Background: Self-organization is so positively represented that we often look only at its advantages and not at its costs. But executives are often overwhelmed by agilization. They give up a good deal of influence and control, and that is frightening. Employees also cannot always cope with the responsibility. This makes it all the more important to be aware of the costs and to consider a Plan B if the project fails.

5. What comes next?

What are the next concrete steps you will take? What models will guide the first trials? How much participation would you like to allow, and how will you ensure it? What support do you get?

We have a tendency to work with very big plans. But we just cannot imagine everything. Therefore, it is advisable to describe a clear intention, but then to take one step after the other and remain agile in the process of change. That means do “rapid prototyping,” enabling all of the qualities that are to be strengthened and developed in the organization to be experienced already in the process. Show appreciation, admit mistakes and have courage!

The problem is not so much that bosses are bad per se, but that there are too many bad bosses. Good managers, if they can be found, are worth their weight in gold, because they create and maintain spaces in which people can develop.

Trying to remedy fundamental undesirable developments such as unclear orientation, poor management or paralyzing corporate culture through reorganization is like rearranging the deckchairs on the Titanic. 

LINKS

10 Mythen der Selbstorganisation / Managerseminare PDF

Mythen der Selbstorganisation / Managerseminare Podcast

15 Mythen der Selbstorganisation – Blog

Dutch version: http://www.slimmersamenwerken.be/mythes_over_zelforganisatie.html

New Work: die neue Management Methode / Manager Magazin 

Misinterpretation of agile

The No-Managers Organizational Approach Doesn’t Work

New York Times: after a radical management experiment zappos exodus continues 

Why did Holacracy fail?

Hierarchy, informal networks and how to navigate the full mess

Warum Selbstorganisation Führung braucht…

Your organization already is self-organizing

The author: Julia Culen advises management teams and owners on issues of leadership, direction and organization of sustainable enterprises. Together with her partner, Christian Mayhofer, she has developed a consulting approach that incorporates findings from wisdom traditions, consciousness research, and science. Contact: www.cmpartner.at