How Do You Run a Business Without Managers

Ask the CHO: How do you run a business without managers

It seems that a lot of the problems seem to come from low to middle management and as someone who is looking to start my own software company I don’t want this to happen in my organization. A no managers approach seems pretty appealing.

So rather than have presidents, vice presidents and managers, all employees had an equal say in running the company. This was backed up by the fact that all employees were also co-owners, every new hire being offered a stake in the company after six months on the job. While I and my two co-founders retained a majority of the shares, this gave us no greater power in making day-to-day decisions.

Obviously this is a fairly special situation. Still I think it is a symptom of poor management practices that leave many wondering what value added “management” provides. Interesting read.

I realize that this experiment worked for an IT company of just 20 people and that you can’t possibly generalize from that to larger companies in other fields. And yet I believe that this is certainly a viable way to go. That what companies really need is leadership that is dynamic, distributed and entirely voluntary. Leadership that switches from person to person, depending on who has the will and the energy, rather than what it says on somebody’s business card.

I still believe it makes sense to have a good management system and managers filling their roles but a poor management system with “managers” may not be better than no managers. Management needs to improve.

One thought on “How Do You Run a Business Without Managers

  1. I agree that this probably wouldn’t scale beyond a small company or a partnership type scenario where everyone had an equity stake in the firm.

    I agree with you, John, that you need managers (look at Toyota). But, bad managers probably cause more harm than having no managers would. If you have bad managers, you should call them “administrators” and let them fill out the time sheets and paperwork (and pay them as a clerk).

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