The Bossless Organization: From Bosses to Mentor Investors

CEOMAG are pleased to share Tory Gattis‘s concept on The Bossless Organization which won a prize at the the first ever Management Innovation Contest in the category of Re-Inventing Leadership organized by Management Innovation eXchange
(MIX )
founded by Gary Hamel.

Summary

Replace the fundamental control relationship in the organization from ‘boss-subordinate’ to ‘mentor investor-intrapreneur team’, where mentor investors are modeled on the angel investors of Silicon Valley and elsewhere: they sponsor, advise, and tap social networks to help teams succeed, but don’t directly control.

Problem

Some of the organizational symptoms are unengaged and passive employees, high turnover, a lack of innovation, and high inertia against change and adaptation.  But those problems stem from a deeper problem in the core relationship of the organization: a command-and-control hierarchy of bosses and subordinates.

The problems of the traditional boss-subordinate relationship (and the overall command-and-control hierarchy) are well known and almost too many to list: controlling, abusive, toxic bosses (Kellerman’s 7 types: incompetent, rigid, intemperate, callous, corrupt, insular, evil), bureaucracy, Machiavellian politics, empire building, innovation-killing, low engagement, passive employees, disempowering, arrogance, self-serving, micromanagement, information, resource, and talent hoarding, etc.

Please don’t be offended if you yourself are a boss. Obviously the majority of bosses do not exhibit most of these traits, but I think most would agree that this behavior is common in most large organizations.  The point is the need for a new approach, as opposed to patches on the existing fundamentally flawed system – as summed up in this quote from the attached chart pack:

Imagine if America’s founding fathers had gone with monarchy instead of democracy, but with really great leadership training so we had ‘better kings’?

Solution

Rebuild organizations around a new core relationship: mentor investors and intrapreneurial teams.  Mentor investors are modeled on the angel investors of Silicon Valley and elsewhere: they sponsor, advise, and tap social networks to help teams succeed, but don’t directly control (think of the famous Silicon Valley angel investor Ron Conway).

  • Invest in project teams
  • Provide resource allocation control
  • Are accountable for good judgment on investments (value-added, RoI, peer review)
  • May mostly invest inside their domain/expertise within the organization, but may also occasionally invest outside of it.
  • They may also promote key themes they’d like to invest in to attract intrapreneurs to key problems or opportunities.
  • Syndicate with others to spread risk on larger projects
  • Intrapreneurial teams can choose from many investors; not locked in to one boss, and a single ‘no’ up the hierarchy can’t kill an idea – but a single ‘yes’ from any mentor investor can get an idea off the ground
  • ‘Funds’ can be spread wide to all employees (like Google’s 20% time), or more concentrated in trusted executives
  • Bad ones are naturally filtered out over time:
    • Won’t find teams willing to take their investments
    • Don’t get access to the best investments or talent
    • Investment performance will suffer

Intrapreneurial project teams pitch improvement ideas against the ‘open source operations model’ of the organization, including all processes, systems, assets, and operational roles transparently modeled inside a Wikipedia-like collaborative software system.  This operations model provides an ongoing organizational core of stability and efficiency that ad hoc project teams can work on and around to provide innovation, adaptation/change, and engagement.  Organizational resources not dedicated to operations – including money and employee time – are available for investment by mentor investors.

Employees may hold a dynamic portfolio of many different roles – including part-time mentor investor, project leader or contributor, and/or operational roles – and are accountable for their voluntary commitments and overall utilization via peer review.  They can shift their role portfolio over time to stay in the engaged and productive Flow zone – not bored, burned-out, or overwhelmed.

Practical Impact

  • Benefits for employees: freedom/autonomy, engagement, dignity, fun, empowerment, more leadership opportunities, easier to demonstrate your value and be rewarded on merit instead of politics or biding your time until the next promotion opportunity
  • Benefits for managers (who shift to being mentor investors and/or project team leaders): a lot more opportunities to be the ‘good guy’ instead of the ‘bad guy’, healthier relationships with colleagues, reduced politics, easier to demonstrate your value and be rewarded on merit instead of politics or biding your time until the next promotion opportunity
  • Benefits for the organization: innovation, adaptation, continuous improvement, risk mitigation, less turnover, motivated and engaged employees, fuller talent utilization

Challenges

  • Processes to handle conflict resolution: probably an escalating process from mediation to arbitration to a small jury to the board of directors (if appealed to that level).
  • Allocating funds to mentor investors: rather than giving each a piece that adds up to the total available, it may make more sense to have a single pool of resources that any mentor investor can draw from it up to a limit assigned to them (based on their experience, trust within the organization, historical performance, etc.).  The limits should add up to much more than the total resources available, but when the pool runs out, it runs out (maybe the pool refreshes quarterly?).  The reason for this approach is to allow more successful and popular mentor investors to draw more from the pool, while more ineffective ones may draw well below their limit.  In other words, we want to avoid having bad mentor investors with a pool of money that they – and only they – control.  There has to be a way for the better mentor investors to draw on that money.
  • Evaluating the value-added and RoI on projects mentor investors sponsor.
  • Balance of long vs. short-term investments.
  • How self-organized project teams choose to handle their own internal management, accountability, and coordination.  There is a lot of literature on high-performing and self-managing teams.
  • Incentive compensation structures (cash and equity).
  • What parts of the organization can be fully transparent vs. more controlled access (like, for example, role compensation, confidentiality, security, and trade secret protection) – although we definitely have a strong bias for transparency.

First Steps

  1. Educating all employees on the new vision.  Coaching existing bosses on the transition to mentor investors.
  2. Build as much of the open source operations model as possible.  Operational roles are defined.
  3. First Phase: Bosses keep current jobs/departments while also mentor investing on a trial basis.
  4. Second Phase: Bosses keep supervisory role over their operations domain, while discretionary project resources shift to internal free market.  Mentor investing expanded.
  5. Third Phase: Operations shift to fully self-organizing based on the open source operations model.  Bosses finish transition to mentor investor role (as well as being project leaders and contributors).

You can read an extended blog post about the contest and the winners here : “Announcing the M-Prize Winners: Audacity, Imagination, Experimentation”

Credits

Inspired by the writings of Hamel, Malone, and too many others to list, as well as practices at W.L. Gore, Morning Star, Semco, and others.

Helpful Materials

Blog: http://openteams.blogspot.com/

Ron Conway and the Technology Ecosystem, TechCrunch: http://techcrunch.com/2010/04/08/ron-conway/

Despite the title focused on performance reviews, this NYT blog post mainly talks about how common and problematic “toxic bosses” are: http://well.blogs.nytimes.com/2010/05/17/time-to-review-workplace-reviews

Author:-


Tory Gattis – Founder, President, and Social Systems Architect at OpenTeams. Tory can be reached at tgattis(at)openteams.com and see his LinkedIn profile here.

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