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3 Common Misconceptions about Self-Organization

3 Common Misconceptions about Self-Organization

Self-management is no longer a new concept, and in recent years, more and more companies have been experimenting with distributed self-organization. Some adopt it to cope with the VUCA environment and make their organizations more agile and resilient. Some aim to foster employee autonomy and dedication. Some use it to drive innovation through bottom-up emergent ideas. And some seek to reduce the burden of management by removing unnecessary layers of hierarchy.

However, as with any new approach, there are always skeptics. I have heard numerous stories of failed self-organization attempts, which left me feeling disheartened. Some of these failed organizations even go as far as labeling self-organization as a dangerous fad, discouraging other companies from experimenting with it. I find it unfortunate that these organizations’ limitations and biases hinder their ability to see the potential benefits of self-organization.

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In the past few months, I had the privilege of translating a book called “Self-Management: How Does It Work” by Buurtzorg, a Dutch organization that practices self-organization. With around 14,000 employees worldwide, Buurtzorg has only about forty employees at its global headquarters. This company has successfully relinquished control and authority, resulting in high employee satisfaction and lower costs compared to other home care providers in the Netherlands. According to data from a consulting firm, Buurtzorg has the highest employee satisfaction among Dutch companies with over 1,000 employees, and its management costs are only one-third of its competitors’. Buurtzorg operates globally in 24 countries, including America.

Therefore, I would like to address three common misconceptions I have encountered when discussing self-organization with people.

Misconception 1: Self-organization = No organization = No structure = No rules

Correct answer 1: Self-organization = Decentralized organizational structure = Governance mechanisms

Self-organization means breaking away from traditional hierarchical organizational structures, allowing employees to self-manage randomly, and letting chaos reign supreme. In fact, it is quite the opposite. Successful self-organization has very clear structures, and may even be more explicit than traditional top-down organizations.

Some organizations opt for pre-designed structures, such as Holacracy or Sociocracy, both of which involve explicitly agreed-upon interrelated circles and roles, agile meeting processes, and integrated decision-making mechanisms.

The frontline nursing team at Buurtzorg is also divided into different self-organized small groups, with a team size ranging from 6 to 12 members. Each autonomously managed small group has a clear and fixed structure, forming the “Buurtzorg Onion Model.” Additionally, a powerful IT system is utilized to support the smooth operation of each self-organized team. This is why a company with 14,000 employees has only a little over 40 people at its headquarters and no HR department!

To help organizations develop new structures and processes in an evolutionary way, Frederic Laloux, the author of “Reinventing Organizations,” shares a useful starting point. He proposes five core systems that can be focused on and designed incrementally when practicing self-organization in an organization:

  1. Individual/Team Decision-making
  2. Organizational Structure: Roles and Circles (as opposed to traditional “Positions and Departments”)
  3. Information Transparency
  4. Performance Management/Feedback Mechanisms
  5. Conflict Resolution

Misconception 2: Self-organization = no leaders = no hierarchy

Correct understanding 2: Self-organization = everyone is a leader = naturally emerging hierarchy

The root of this misconception lies in the mistaken belief that in a self-managing organization, everyone must be completely equal. In reality, the purpose of self-organization is not to make everyone equally powerful, with the same authority and influence, but to give everyone the opportunity to have more power and to contribute their unique value. In other words, self-organization allows each person to grow and contribute to their full potential. In a diverse organization, it is natural for different people to take on different roles and responsibilities, such as strategic planning, innovation, customer service, quality control, and so on, with varying levels of contribution. If our goal is to achieve absolute equality for everyone, it can lead to hidden or invisible hierarchies and create frustration and injustice for those who want to contribute their valuable expertise or experience but feel hindered. It is also important to understand that hierarchy or leaders are not inherently “bad” things that we must reject. They are natural components of human collaboration in group settings.

The purpose of self-organization is not to eliminate all leaders but to foster leadership throughout the entire organization.

In self-organization, the definition of “everyone is a leader” is that each person should first become an excellent leader in their own role. They should take ownership of their role, commit to goals, and achieve them. At the same time, we must also recognize that there are individuals within the team who are exceptionally skilled at providing direction, aligning people, making decisive decisions, and coordinating resources. They naturally attract followers and become trusted leaders. Therefore, it is important to openly discuss these topics and allow for a healthy, dynamic hierarchy to emerge.

As with all elements of an organization, there is no one-size-fits-all solution to resolving this tension:

  • ING, the Dutch banking group, has developed a continuously evolving and flexible organizational structure.
  • Fitzii, a Canadian recruitment company, supports employees at all levels in designing and redesigning their roles with input and suggestions from their peers.
  • Zappos, an American e-commerce company, retained some decision-making power for traditional managers even after adopting a holacratic approach.

Misconception 3: Self-organization means everyone participates in decision-making and everyone agrees (or decides) on everything.

Correct explanation 3: Self-organization means distributed power and different integrative decision-making mechanisms.

Another assumption about self-managing organizations is that it means all decisions must be made through consensus or unanimous agreement—everyone must make decisions and reach consensus on everything. If this were true, self-managing organizations would never be able to get any work done, and meetings would be painful and endless.

Power Allocation – Domains of Authority:

A domain of authority is the area that a role can control, including resources and decisions. For example, the domain of authority for a “social media” role could be the “company’s corporate WeChat account.” The setting of a role’s domain of authority must serve the goals of that role, but it should not interfere with another domain of authority unless there is special permission.

Each role can have its own domain of authority, which means that within the relevant domain, you are the ultimate decision-maker. You can open up to listen to opinions from all parties and then make your own decision, or you can directly make a decision that you believe is right. No one in the organization has the authority to interfere with or command you.

Different Integrative Decision-Making Mechanisms:

In fact, self-organizing becomes more effective in decision-making because they can involve people in a more meaningful way while organizing actions. To do this, it means being very clear and intentional about designing decision protocols for different types of decisions.

  1. Holacracy classic meetings: Tactical meetings and governance meetings. Tactical meetings focus on day-to-day coordination and progress, while governance meetings help teams iterate on organizational structure and policies.

2.The advice process is also a classic decision-making model. Using a standardized decision-making process and powerful online technology, anyone can initiate a proposal on the platform and invite the team to participate in the decision.

3.Sociocracy 3.0 decision mechanism

Conclusion

No organizational form can solve all the problems of an organization, and self-organization is neither a utopian playground nor a panacea for traditional hierarchical systems.

If we look back at history and look ahead to trends, organizational management will become increasingly open, dynamic, and diverse. Of course, every entrepreneur and leader has their own management beliefs. My belief is that management should be able to inspire the goodwill of people.


Author: Fiona Berton

Meeting Effectiveness Expert

Deeply accompanying the organizational evolution of agile transformation in enterprises.

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