Liberating leadership

In "Freedom, Inc." Brian Carney (Wall Street Journal) and professor Isaac Getz (ESCP Europe) look at some companies which have moved away from a hierarchical, bureaucratic mindset to a more freedom-based framework. The liberated leaders of these companies let workers self-direct in an environment of trust and equality.

	Title:	Freedom, Inc.
	Author:	Brian Carney and Isaac Getz
	Pages:	274pages
	Publisher:	Crown Business
	Price:	$27.5

The authors use the terminology of one of their liberated leaders, Jean-François Zobrist, to distinguish two forms of business organizations. The freedom-inspired organizations are called “why” companies as opposed to the more traditional, hierarchical sort called “how” companies. In “how” companies managers tell workers how to do their tasks and reward workers based on how well they follow those instructions. A “why” company replaces all those how instructions with a question: Why are you doing what you are doing? The liberated leader of a "why" company does not tell people how to do their job but invites them to do what best fits the vision of the company. Liberated leaders focus on ends not means, and help workers in their search for the best means.

The leaders of the freedom-based “why” companies studied by Carney and Getz take into account three desires of their workers. The first is the desire to self-direct – self-direction is enabled by the fact that liberating leaders do not derive satisfaction from dictating the hows. Secondly, there is the need to grow and explore new opportunities. Workers can move around the company, to the extent that they wish to do so, and the company does its utmost to provide the corresponding training support. Third, there is the yearning for equality. “Why” companies are not hierarchies which means that intrinsic equality and dignity are primary values and that various symbols of hierarchical privilege are shunned.

This obviously has consequences for the leadership style of liberated leaders. One is that liberated leaders are more intent on listening than on telling subordinates how to do their job. The communication of liberated leaders is focused on sharing the vision of the company and providing information that will help workers better self-direct. One of the leaders, Bob Toski of Sun Hydraulics, liked to use the term “universal information” as the defining characteristic of a company such as the one he founded. By universal information, he meant that information does not get lost in a hierarchy. Leaders are communicating with frontline workers – information is not lost or mauled in layers of middle management. Frontline workers are transmitting to the leaders information concerning the improvement of relations with customers, suppliers and other stakeholders.

Considering others
Liberated leaders believe that the people within the company hold the answers. The role of the leader is not to provide answers but to ask questions. She modulates the questions in hope that a particular phrasing will provide a hook to an answer. In other words the liberated leader believes that she does not have the answer, and that multiple brains are better at solving problems than just one. As Jeff Westphal of Vertex, an advanced tax software company, puts it: “We can either get an itty-bitty bit of leverage out of the incremental power of my little pea brain or we can get a ton of leverage by the incremental power of six hundred brains.”

Liberated leaders are often putting themselves in the shoes of their workers or customers or other stakeholders. Many of them are implicitly working within the “Do unto others as you would have them do unto you” paradigm. For example, John McDermott, the head of USAA, a large insurer with a big call center, wanted his representatives to serve the customer as they themselves would wish to be served. To achieve that goal he removed layers of bureaucratic procedures and allowed the representatives far greater latitude in self-direction.  In a similar vein, David Kelley of IDEO, an industrial design firm, explained that he implemented freedom practices for the firm’s associates “because that’s the way I would want to be treated if I were them.”

But as the authors do not fail to emphasize, responsible freedom is not immediately for everyone. In several of the companies, middle managers resisted the move away from command-and-control. Liberated leaders would first try to get them to see the value of the freer, egalitarian approach. For the managers who wouldn’t move from the “how” company mentality, one solution was to keep them at their salary level but remove command-and-control responsibility from them. In the most obdurate cases, firing served as the ultimate recourse.

The physical details
Many of the leaders were attentive to physical issues that are key to creating an environment of equality: offices, parking spaces and dress codes. Many of the companies forsook executive offices and installed open spaces which favor communication. In some of the companies, desks were open to all and worker property was limited to rolling file cabinets. Meeting rooms planted in the middle of the open space of some such companies could take on unusual forms: a summer cottage in the case of Finland’s SOL (a cleaning service company), a microbus in the case of California’s IDEO (a design firm). Elevators are notoriously bad for communication so the Richards Group (an advertising firm) has a large stairwell in which workers come across each other and in which Stan Richards holds his (stand-up) meetings.

Many of the leaders of these companies try to avoid suit and tie, as a way of reinforcing the equality mentality. For example, Quad Graphics, a printing company, uses a dark blue shirt that can withstand the rigors of the printing plant, for plant and office workers. Another symbol of hierarchical privilege is the assigned parking spot. Most leaders have done away with these. But executive privilege is longstanding and sometimes gets overlooked, even by attentive liberated leaders. As an example, for a long time, Quad Graphics maintained special parking spaces for some executives.

The psychological model
Worker self-direction is a key component of the freedom that these “why” companies seek to create. The authors call upon a psychological model to buttress this feature, a model which diverges from Abraham Maslow’s famous model. Maslow’s model foregrounded security over activity, with people seeking to resolve tension in their pursuit of peace of body and mind.

The authors point to a more recent model, proposed by Edward Deci and Richard Ryan which places far more importance on activity. In this model, humans derive satisfaction from mastery in the various activities they undertake. They also aim for the happiness that arrives from the feeling of vitality associated with those activities

Deci and Ryan see three nutriments feeding this growth process. The first is relatedness which they define as “a desire to love and care, and to be loved and cared for”. The second is competence or “the propensity to have an effect on the environment as well as to attain valued outcomes within it”. The third nutriment, autonomy, is “the desire to self-organize experience and behavior and to have activity be concordant with one’s integrated sense of self.” When they emphasize self-direction, communication and trust liberated leaders, are providing Deci and Ryan’s three nutriments.

The historical trend in organizations
In the early modern Western world, the predominant organization was the feudal one, featuring a strong hierarchical principle with patrons favoring their particular clients. With the Industrial Revolution, there was a turn to bureaucratic organizations that maintained hierarchy but moved away from favoritism through the use of impersonal procedures. It was only in the latter half of the 20th century that a small number of organizations have pointed the way to an organization that tries to combine personal freedom and fairness and moves away from the bureaucratic paradigm of fairness through impersonality. Organizations such as those studied in Freedom, Inc. eschew both hierarchy and anarchy in the pursuit of pursuit of freedom without anarchy, or responsible freedom.

It has become clear that hierarchical organizations are leading to high levels of worker disaffection. A 2006 Gallup poll found that 59% of American employees were not engaged by their work and 14% were actively disengaged. Over two thirds of workers were in effect just doing time in the company. In the authors’ view, such lack of engagement has three negative consequences. One is that unengaged workers are not likely to contribute much to the increasingly important innovation effort. When asked whether their organization brought out their most creative ideas only 17% of the unengaged responded positively. Secondly, one might think that bureaucratic organizations are good at cost control. But cost control systems don’t measure the opportunities foregone or the creeping inefficiencies that “how” companies foster.

Many bureaucratic companies succumb to the “managing for the 3% syndrome”. The expression, forged by Gordon Forward of Chaparral Steel, refers to the tendencies of companies to institute policies and procedures designed to prevent or punish regrettable acts by a small number (3%) of employees (e.g. supply theft resulting in locked supply closets). These companies fail to realize the huge demoralizing effect this has on the vast majority of workers (the other 97%). Such 3% syndrome procedures and others which lead to a loss of worker control all lead to high levels of stress. In a separate WSJ op-ed piece, professor Getz has linked the wave of suicides at France-Telecom to the command-and-control philosophy of the company.

In many ways, the employees in freedom-based companies resemble more the artisans of the pre-industrial era than the workers of the assembly line era. Artisans managed their own work and received recognition for the value of their work. Freedom-based companies are moving back toward artisanal self-direction and helping workers regain a sense of recognition.

On several occasions, the authors refer to Douglas McGregor, the man behind Theory Y. Freedom, Inc. is an important descendant of McGregor’s The Human Side of Enterprise (1957). This eye-opener of a book, with its extensive reference to companies and quoting of their leaders, is a rich, fast-flowing read (perhaps the imprint of its WSJ-based parent). Readers who would like to complement the book with a more academic and shorter presentation can turn to professor Getz’s article in the summer 2009 issue of the California Management Review, “Liberating Leadership: How the Initiative-Freeing Radical Organizational Form Has Been Successfully Adopted.”

Published December 2009