A major change eCommerce has brought to business is increased transparency. It has moved the markets closer to perfect markets by making information available at a click of button. Take sites like Trivago which make price comparisons so easy and help consumer choose best option at lowest price. People can compare brands and choose the best deal. The competitive market also ensures that companies are under tremendous cost pressure and hence cannot make super normal profits. The companies have to redesign and re-work on their strategies as mentioned earlier in https://rajneeshrastogi.wordpress.com/2017/06/21/changing-management-paradigms/.
The classical management solutions will not help companies beat markets in this new age. The companies would need better products and cost-effective operations. More importantly the companies would not be able to beat the market using their strategic advantages but will also have to rely on making use of tactical or short-term opportunities in the markets. This would call for faster decision making. Many of the decision calls may not allow sufficient time for the people in the field to wait for while the information goes up and decision comes down. This makes a case for devolution of decision making to the people in the field. Since, teams collectively take better decisions than individuals, it would be better to delegate decision making to teams.
These self-managed teams would take responsibility for their performance and take their own decisions. The responsibility of the senior managers would be to provide conditions that facilitate such decision making. Some of the enablers for empowered teams are ( please also see https://rajneeshrastogi.wordpress.com/2017/03/18/building-football-teams-at-work/)
- Access to information
- Roles based teams with psychological safety
- A performance appraisal system that supports collaboration and cooperation within team members instead of rewarding for meeting requirements of the role. (https://rajneeshrastogi.wordpress.com/2014/12/28/teams-and-performance-appraisal-systems/)
- Acceptance of decisions taken by the team.
We are now seeing a trend where some of the companies have adopted this. Harvard Business Review in its recent edition has carried the story “Harnessing Everyday Genius” and explains how Jean-Michel Guillon, head of personnel department and Bertrand Ballarin worked together and launched their project MAPP (Autonomous management of performance and progress) in summer of 2012 with the aim of redistributing authority and creating empowered teams.
Some of the other companies, mentioned in HBR are
- Nucor: An American steel maker that allows operating crews to take responsibility for business development, capital planning, product innovation, process improvement etc.
- Buurtzorg: Dutch health care service provider which is organized into more than 900 self- managing teams.
- Svenska Handelsbanken: A Swedish bank that treats each of its branches as standalone business. Branch teams take on decisions on credit, loan rates, deposits, customer communications and staffing levels.
Holacracy is another concept that operates with similar organizations. Lot of companies today are adopting Holacracy. Zappos is one of the largest companies to adopt Holacracy. Some other companies that have created self-managed teams are Morning Star, a ketchup manufacturing company and W.L. Gore, a material science company that specialises in PTFE (Teflon). The movement is now gathering critical mass and snow balling into a revolution.