The world’s leading expert on business strategy, Gary Hamel, has talked about how important it is for businesses to be reinventing the bureaucratic structures and procedures of management in their organisation. Traditional management principles have worked well for companies that value production efficiency but not so well for those that focus on constant innovation and employee engagement. The following is an except about how E-Web Marketing radically changed their company structure, the full article can be found here.
Six months ago, Australian web-marketing firm EWeb Marketing got rid of all its managers. Its 42 workers are now split into ‘pods’. Each pod operates as a small company, managing its own clients and revenue. For example, the pay-per-click marketers work together. As do the search engine optimisation people. But these aren’t regular departments. They aren’t hierarchical. Workers report to each other, and across to other groups. If there is a chain of command, it’s one of influence and expertise, rather than position.
..“We remember when we employed four or five people,” Ng says. “It was so mobile, and there was so much synergy. But when we grew and had department heads, we found people blaming others for their problems.” The pods are an attempt to recapture the firm’s early energy.
But management exists not just to make sure workers don’t slack off. It’s also there to ensure the organisation works together as a whole. One of the key benefits of large business over small is the ability to avoid duplication, to pool resources to achieve greater economies of scale. Managers, through feeding information up the chain, allow these decisions to take place.
When the change occurred I could immediately feel and see the buzz around the office. Pods were excited and coming up with their own names, desks were being moved, workers were writing their own job descriptions and not only were people extending their skills and expertise by seeking advice cross-functionally, they also started seeing themselves as key stakeholders of the business and were stepping up to take charge. It was truly inspiring to witness.
The most important element of this transitional phase for us was also communication. In the initial pod stages, we established a leadership committee which offered guidance to each business unit, however, we have since abolished the concept as employees were more open to simply asking their co-workers for guidance. To avoid duplicate communication, E-Webbers also reach out beyond their business units by sharing information and news during our Friday Family Meetings or posting a message on one of our communication channels such as Yammer, our internal equivalent of Facebook.
Although many companies will debate that management should exist to oversee the business and work that is carried out by the employees, I find that having managers can imply that employees are incapable of doing their job correctly and I’m glad to not make this assumption of my E-Web Family. Does your company still operate using traditional management principles? What synergies and results could your company achieve with an innovative flat structure?