Several decades ago companies produced standard products while their flexibility was limited to the adjustment of the production volume and was aimed at the maximization of the profit. Administration of such organizations required planning and strict management hierarchies, while employees performed simple functions, and were easily replaceable. In order to protect their rights, they created trade unions. All heard about trade unions of miners, but does anyone heard about the trade union or strike of programmers? Times have changed – in the knowledge economy the human capital is key, and the task of entrepreneurs is to use its potential to the full extent. There is a belief that “turquoise” companies are the best in doing this.
The world is changing fast – companies have no choice but to follow trends
The speed of changes is astonishing. Today, not everyone will remember such company as Polaroid with over 50 years’ history, global product, top profits in 1991 and bankruptcy in 2001. The speed of decision making is the ultimate priority under such conditions. Companies with cumbersome hierarchical and bureaucratic structures not only spend money for their administration but also fail to rapidly adapt to technological challenges and changes of customers’ needs. Furthermore, people become more independent and inclined to value their liberty, family, and free time. Thus, traditional methods of motivation are getting less and less efficient.
Managers are expensive. It’s time to get rid of them
In the book “Discovering Organizations of the Future” Frederick Lalu scrutinizes the evolution of organizations from strict hierarchical structures to self-governing entities. In general, he names 5 stages and assigns a color to each of them. According to the author, companies working in compliance with principles of self-governance are “turquoise”. Management is absent in such organizations – any employee can influence any decision. It provides maximum freedom to the staff, as well as saves their time and efforts which otherwise would have been spent on “pleasing the boss” instead of achieving peak performance.
“Turquoise” companies are quite successful
Companies apply self-organization methods are quite numerous. The “20% of the time rule” in Google probably was the most famous example of an approach which allowed all employees of the company to work 1 day per week on their own projects. Google News, Gmail, and AdSense appeared thanks to this. Even though this initiative was terminated, “turquoise” companies are operating. For instance, Buurtzorg Nederland, which is engaged in patients’ care after switching to “turquoise” business methods, increased the number of employees by 700 times, while the speed of patients recovery became 40% higher compared to the competitors. Employees are united into teams. Every team independently decides with whom and how to work. Ukrainian “turquoise” company UPTech working in IT-outsourcing sector, reiterates that after the introduction of the new approach it has low employee turnover, the perfect atmosphere in the team as well as high rate of customers’ satisfaction.
“Turquoise” doesn’t suits everyone
Ultimate transparency and freedom are dominating “turquoise” companies. UPTech provides its employees with access to financial reports, salary sizes’, contacts of customers as well as information about faced challenges and mistakes. It was a complicated move, taking into the account that employees can influence their salary, but in the end, it didn’t cause any tensions or a considerable increase in expenses. It demonstrates the high level of consciousness and responsibility of staff, but do all companies have this? UPTech employees mention that one of the major challenges for them is finding people which will be able to work in this atmosphere and share the company’s philosophy. At the same time, a “turquoise” organization isn’t a universal remedy and won’t protect you from strategic miscalculations and fails.
Implementation of “turquoise” approaches requires confidence and trust. There’s still lack of experience
A lot of companies are created as “turquoise” – a family or friends are getting together, and establish an enterprise where everyone has the right to vote. Such companies may be highly successful. While the company growths the hierarchy emerges and founders have to delegate responsibilities to the employees. Though, very few of them are ready to give all employees the right to make decisions regarding all issues in the company. Those who are ready to delegate such responsibility has to establish rules of the game in the organization which they have to observe themselves. Experience can facilitate the operation of such organizations, though there is still lack of information about the “turquoise” companies. UPTech representatives confirm that except for the Lalu’s book the information is very scarce.
A lot of companies are hunting for talented employees but very few of them are able to develop their potential to the full extent. “Turquoise” companies try to do it. The experience of these companies still requires time to prove its efficiency but won’t the current “traditional” leaders become redundant if they neglect strange newcomers, who don’t bear any management-related expenses and can adopt any decision within several seconds?