“The key to management is to get rid of the managers,” advised Ricardo Semler, whose TED Talk went viral, introducing terms such as “industrial democracy” and “corporate re-engineering”. It’s important to point out that Mr. Semler isn’t an academic or an expert in management theory, he is the CEO of a successful industrial company. His views are unlikely to represent mainstream thinking on organizational design. But perhaps it is time we redefine the term “manager”, and question whether the idea of “management” as it was inherited from the industrial era, has outlived its usefulness.
The World Bank estimates the size of the global workforce at about 3.5 billion people, and by no means would I expect, much less advocate, that those who are employed today will transition into a management-free structure in the near or even medium term. The vast majority of work involving human labour is still best carried out in a traditional organisational structure.
In a world of VUCA (volatility, uncertainty, complexity and ambiguity), it is the tech unicorns that will be the early adopters of a post-hierarchical model. In fact, some have already embraced it. Today’s competitive landscape is defined by one word: disruption. The ideas of incremental progress, continuous improvement, and process optimizations just don’t cut the mustard anymore; those practices are necessary, but insufficient. It is now impossible to build enduring success without “intrapreneurship” – creating new ideas from within an organisation.
The organisational dilemmas faced by ambitious disruptors are best exemplified by Netflix. Their human resources guru, Patty McCord, identified a problem that appears obvious in retrospect: as businesses grow, so does their complexity. But that comes at a cost of shrinking talent density: the proportion of high-performers within an organisation.