Pete Martin: The boss is dead - but think before you give him the bullet

Across the street, the trees sparkled white with fairy lights. As the black Lincoln sedan pulled up outside the Sparks Steakhouse in midtown Manhattan, it must have felt like Christmas.

The days of the all-powerful boss could be numbered as self-organising grows in popularity

Goodwill and warmth were posted missing, though, around 6pm on 16 December,1985. It was so cold that the assassins wore Russian-style fur hats. As the head of the Gambino crime family ‘Big Paulie’ Castellano emerged from the car, mobster Johnny Carneglia shot him in the head. The don’s bodyguard Thomas Bilotti – with a well-earned reputation for brutality rather than brains – got out of the driver’s side, unarmed. The killers gunned him down too.

The hit was ordered by John Gotti who watched the murders from his car. Unsanctioned by the syndicate, the killings were a coup in every sense of the word. Unpardoned but unopposed, Gotti soon became boss of America’s most powerful mafia organisation.

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If we jump back in time over 500 years from midtown in Manhattan to the middle ages in Perth, we can see a similar scene unfolding. King James I is stabbed to death. But this time the conspirators are not so lucky. Just like a mafia don, you’re not meant to murder a king without consent. The coup fails and the assassins are hideously tortured, before being beheaded and quartered.

These violent episodes show the most basic and regressive form of ‘management culture’ in which force and fear predominate. Like the men who operate them, such systems are dangerously unstable. Each iteration tends to be short-lived – and produces little of enduring value. For obvious, blood-soaked reasons, they’re described by organisational theorists like Frederic Laloux as ‘red’ organisations.

What’s less obvious is that the nature of any organisation reflects the mindset of its community. In turn, participants find themselves in thrall to the usually unwritten codes.

That’s true even as societies evolve – from warring tribes to agrarian settlers to industrialism to ‘knowledge working’. Different organisational structures emerge from different ways of thinking and create different ways of being. The organisational structures with more effective, evolutionary outcomes win through.

The next evolutionary level in system thinking creates ‘amber’ organisations with formal roles, standardised processes and reporting. The Catholic Church would be a classic example. Obeisance and hierarchical stability are achieved by promotions and punishments, spiritual and otherwise. Less lethal than the mob, this ‘command and control’ approach is also more sustainable.

Yet, ‘amber’ organisations also have a fixed view. Innovation is unwanted. They follow the rules and repeat what worked in the past. These stolid institutions – typical of government bureaucracies, armies, traditional schools – may not be popular or effective, but they are good at persisting. You may find yourself working with them, even today.

What they are not, of course, is meritocratic. You rise by compliance. But in the competitive context of 20th century capitalism, just doing what worked in the past gets you killed, commercially-speaking. So more modern ‘orange’ organisations arose, seeking profit and growth through innovation and accountability. What works gets rewarded. You can see this mindset among the ‘intellectual barbarians’ of investment banking. It breeds cynicism and short-termism. The aim is to ‘get-rich-quick’, and hang the consequences and costs for society.

As we’ve found across different industries, the pursuit of loot as an end in itself tends to turn out badly in the long run. The individual freeloader may make off with personal gains, but larger private sector losses and lay-offs tend to be ‘nationalised’ and met by the public purse.

The way that titanic captains of industry have been dragged over hot coals in public inquiries suggest that society is losing patience with industrial-scale selfishness. In response, we’re seeing the evolution of ‘considerate capitalism’ or ‘profit with purpose’ across many businesses.

You may be lucky enough to work for such a ‘green’ organisation. The approach is driven by wider considerations than the short-term interests of shareholders. And, since people tend to work better when they don’t feel like a cog in a faceless machine, the company does better too. A large scale study published in 2015 by the Harvard Business School suggested that a stock portfolio composed of firms which invest strongly in key sustainability issues such as human capital can outperform their less evolved counterparts by 2.5 per cent to 7.5 per cent annualised.

As a result, the motivation within these more evolved organisations is often commercial as well as cultural. Indeed, you sometimes find ‘orange’ organisations painting themselves ‘green’. The business pays lip service to their ‘internal culture’. However, the dead giveaway is the formality with which ‘vision and values’ are mandated top-down rather than growing out of a softer, more individualistic mindset.

So, what’s next in the evolution of the organisation? What kind of structure will be best adapted to this strange new world where there’s too much information, too many complexities and not enough time for any ‘big boss’ to be consulted, never mind to do all the deciding.

A new breed of ‘self-organising’ organisations is emerging, colour-coded as ‘teal’. In these set-ups, the old-fashioned idea of the boss really has been killed off. Serious decision-making is pushed down the organisation, so that each colleague is encouraged to do what they feel is right.

If this seems like fanciful nonsense, or merely a recipe for chaos, consider this. The company which controls about 40 per cent of the USA’s tomato paste market is self-organising. Sure, it has a $700m turnover and a board of directors, but there’s no supervisory management. Workers define their own job responsibilities. They work and innovate independently, and can even invest in equipment. And they’re not alone.

In Holland, Buurtzorg employs 8,000 community nurses across 700 self-organising teams. The nurses provide better levels of care. But they’re also 40 per cent more efficient than the prescriptive ‘time and motion’ management which had previously demoralised staff and blighted patient services.

The secret is that self-organisation is not the same as disorganisation. In fact, all of these ‘teal’ organisations have stumbled upon remarkably similar operating systems. The mutual responsibilities which are often unspoken among colleagues are made explicit. Through highly developed concepts such as holacracy, distributed decision making isn’t just possible. In a pinch, it’s also more practical.

More surprisingly perhaps, under self-organisation the most senior and talented people re-discover themselves. Freed from endless meetings and making up numbers to appease the City, they can concentrate on what matters to the business: developing skills, talking to stakeholders, ensuring the company’s commitment to a higher path.

And that seems to be the difference. Higher level thinking shapes a better class of organisation which, in turn, creates a cooler way of living, and of making a living.

So, before you decide to give your boss the bullet, perhaps it’s time to evolve our own thinking.