Whoever has grown up with classic pyramid-type organizations, whoever has studied business administration and traditional management, can hardly imagine that companies can do without leadership roles such as team leader and department heads – or that they even can be successful that way.
I have to admit that it is bold to just think about eliminating management levels. It is even bolder to do so. This is what happened at Alois Heiler GmbH in Waghäusel in the German state of Baden-Wuerttemberg. The company manufactures individual glass solutions for interior fittings. When Stephan Heiler took over the family business in 2012, he very much thought about his understanding of leadership. He simply wasn’t able to imagine himself as someone who spends his entire time instructing employees and subsequently checking whether they had followed his instructions. He was also uncomfortable that employees would never be fully committed to processes and workflows that had been designed by managers for them.
Then, in 2014, the time had come: He started to transform his company with the support of consultant Gebhard Borck. In the process, Stephan Heiler and Gebhard Borck conducted the transformation project with an open mind at all stages and used various operational systems as guidance. They developed concepts, methods and tools on the path of transformation – predominantly together with the employees. This path of transformation was a bumpy ride. Stephan Heiler describes this stony path very honestly in his book “Being the boss? Better get things moving!”.
Five of his then seven managers left the company – three already during the initial stage of the transformation, two others quit their jobs two years later. From that moment, there actually was no longer any formal hierarchy. The company also lost the expertise of the managers who had left.
The employees had to take their time to learn new things and tasks in order to be able to take responsibility for their work. They had to learn that they were not only responsible for their day-to-day business, but also for structural improvements and new strategies because there was no manager anymore who could have carried out these tasks for them. During the transformation process, Stephan Heiler realized that he would need moderators, facilitators and coaches to support team decisions. He calls the role that caters for these various aspects “business catalysts”. The company has also gone through economic crises in recent years: At the very beginning of the transformation process, the main glass supplier became insolvent, earlier employees copied the business model and lured customers away. Nevertheless, Stephan Heiler swears by this self-managed organization without formal hierarchy. He is convinced that this organizational form is more powerful, resilient and adaptable than a classic pyramid-type hierarchy. He even says that his company wouldn’t exist today if he had not transformed his company many years ago.
I met his business catalyst, Caroline Hess, in a training course. It was actually Caroline who made me aware of this bold example of transformation at Heiler Glas in the first place. When I asked her when transformation at Heiler would be completed, she replied: “Never, because we constantly adapt our organizational structure to market changes. We also do not believe that there is a blueprint for a one-size-fits-all structure, but instead believe that each organization has to create a suitable operational system for itself – similar to what we did.”
Stephan Heiler was very courageous; he went on a path on which hardly any other company in Germany had gone before at that time. Today, I would presume that a similar step would be subject to less risks as there is currently a number of successful practical examples as well as a number of conceptual designs to structure collegial leadership in an easy-to-digest manner for all people involved.
In terms of true-life examples, I would like to refer to Weleda AG (natural cosmetics – Germany/Switzerland), Buurtzorg (outpatient healthcare – Netherlands), Favi (metalworking industry – France) and Morning Star (food production – USA). The interested reader will surely ask himself now: Does this only work for small and medium-sized enterprises or also for larger organizations? The companies mentioned above as examples include everything from around 60 up to seven thousand employees.
There is a sheer wealth of publications regarding concepts such as collegial leadership and self-organization, some of which are listed below. In this context, I would like to highlight the works published by Claudia Schröder and Bernd Oestereich. They switched their own company oose GmbH to collegial leadership as early as 2012 and have developed additional concepts based on lessons learned that they share via books and seminars. My deep understanding of this issue is essentially based on the input by Claudia and Bernd.
In a nutshell: Collegial leadership is nothing straightforward. Anyone who embarks on this path needs staying power. But it is well worth it. A company that is managed based on collegial leadership has employees who assume responsibility, develop their own ideas and make use of them also in the interest of the company. An enterprise managed on the basis of collegial leadership is future-proof!
This text first appeared in my newsletter 'Innovation on Wednesday'. It is published every other Wednesday. For subscription click here