Davenport is skeptical that self-described bossless environments are truly bossless. If one walks around and observes how a company operates, he will see “natural leadership coming out in every meeting. That’s how humans work. The people may not have the title, but someone is emerging to direct the conversation and come up with ideas…. When the issue is moving an organization from point ‘a’ to point ‘b,’ someone has to have a vision and [inspire] the internal motivation to get there.”
He cites a study that analyzed game companies in an effort to find out which group was most responsible for the prosperity of those firms: talented producers, great project managers or great executives. “Great project managers were the most important pivot point,” Davenport says. “Emergent leaderless groups” do not make the necessary decisions about resource direction, product pricing and other issues. But the key is to handle these issues in a way that allows employees to be autonomous and self-determining. “That’s where bosses have historically fallen down,” he notes.
Another key element in a successful bossless environment is “a very strong value-driven culture,” adds Rothbard. “This, in a way, substitutes for the boss. Decisions are then inspired not by someone above you saying, ‘Here is how we operate,’ but by the presence of a group of employees who are fairly homogenous in terms of their values.” Once again, hiring is key. Companies screen employees to ensure that their values are consistent with the company’s, and then “do tremendous socialization” of these employees once they join.
Rothbard and others cite parallels between bossless offices and the new world of crowd sourcing, where companies come up with ideas and then put them out to the public for input. “It used to be that R&D was totally in-house,” says Rothbard. “Now some companies are trying to use the collective wisdom of the crowd to help with decision-making,” similar to the way that some companies rely on their groups of employees rather than on one top-down decision-maker.
Yoplait and Southwest Airlines
In addition to encouraging creativity, bossless environments also increase efficiency, according to Stephen Courtright, a management professor at Texas A&M’s Mays Business School. He cites the example of Southwest Airlines, which allows baggage clerks the freedom to decide how to solve a customer’s complaint on the spot, without having to say, “‘Wait while I consult my boss.’ In a service-oriented environment, it can foster greater customer satisfaction,” says Courtright.
Flatter organizations also foster “intrinsic motivation,” he adds. “When employees have a degree of self-management, and therefore a greater sense of accountability, it means their motivation is based not on their standing with the manager or boss, but because they identify with the work.”
Problems can arise when self-managed teams are launched but are not given guidelines about what they should be producing. A large engineering company Courtright advised had experimented with self-managed teams but had neglected to give them guidelines on production. The teams were so efficient that they ended up with stockpiles of unused inventory. “The highest performing teams are those that have a strong sense of autonomy but also receive high levels of feedback, including the setting of goals, from management,” he says.
Bossless environments work best in organizations where creativity is absolutely essential, adds Courtright, who co-authored a paper titled, “Peer-based Control in Self-managing Teams: Linking Rational and Normative Influence with Individual and Group Performance,” published in The Journal of Applied Psychology earlier this year. That includes more than just technology-based companies. Yoplait, for example, has a history of relying on self-managing teams charged with launching new flavors and products — one of the more creative sides of the business.
(MORE: 10 Questions for Jeff Kinney)
Courtright doubts that even staunch advocates of self-managed teams would say it’s the “cure-all for organizational problems. But a substantial body of research shows that humans have an innate need for autonomy. They don’t like being micromanaged. One of the things self-management helps employees do is [feel] a degree of control over what they do.” Corporations apparently have caught on, he adds, citing surveys showing that while less than 20% of Fortune 1,000 companies had team-based structures in 1980, that number rose to 50% in 1990 and 80% in 2000.
The Democratic Ideal
Bidwell suggests that “levels of ‘bosslessness’ already exist in professional services firms and academia where a lot of decisions are made by committees. At universities, there are deans, but when they want to make major changes, they usually put things up to the faculty for a vote. So I think a lot of organizations have been making decisions without a clear hierarchy for a long time.” He would be surprised, he says, if bossless environments become “the way of the future, but I think they can work in some situations.”
As for Cobb, “in the U.S., we like to think of ourselves as living in a democratic society, with the idea that everyone is represented, that everyone has the right to have a say and be heard,” he says. “So how do you create economic structures that can leverage that? People have experimented with it forever, with varying degrees of success.”