The Cost of Having a Boss

Management guru Gary Hamel provides an excellent explanation as to why only 21% of employees are highly engaged at work.  Contrary to common belief, it is not the type of job or salary level that determines the extent of one’s motivation, which is why companies such as Wegman’s Food Markets and QuikTrip convenience stores in “unglamorous” industries like retail consistently rank among the best places to work.

“The real damper on employee engagement is the soggy, cold blanket of centralized authority. In most companies, power cascades downwards from the CEO. Not only are employees disenfranchised from most policy decisions, they lack even the power to rebel against egocentric and tyrannical supervisors. When bedeviled by a boss who thwarts initiative, smothers creativity and extinguishes passion, most employees have but two options: suffer in silence or quit.

“In a well-functioning democracy, citizens have the option of voting their political masters out of office. Not so in most companies. Nevertheless, organizations here and there have taken steps to make leaders more accountable to the led. HCL Technologies, a progressive Indian IT services company, encourages employees to rate their bosses, and then puts those ratings up online for all to see. Bullies and bunglers have no place to hide. And W.L. Gore, the Delaware-based maker of Gore-Tex and 1,000 other products, lets its highly decentralized teams appoint their own leaders. These are interesting aberrations from the norm, but in most organizations, power is still allocated top-down.”

Until people are free from a system where their boss wields compete power over their livelihoods, companies will find it difficult to harness and benefit from the full potential of their most valuable asset.

The key to unlocking employee engagement lies in flattening the organizational hierarchy and democratizing the decision-making powers.  A good place to start is to allow employees to set their own salaries.  Teams of employees must also be trusted with the power to hire and fire their leaders and coworkers. 

More and more people are coming to the conclusion that command-and-control is no longer an effective way to manage a company.  There is no reason why responsible adults should be treated like irresponsible and dishonest children as soon as they arrive to work.  In a later post, we will explore additional democratic policies that companies can implement in order to cultivate a more innovative and engaged workforce.


Gore’s Democratic Culture Drives Innovation

The CEO of W.L. Gore & Associates recently gave a lecture at MIT titled “Nurturing a Vibrant Culture to Drive Innovation.”

Gore is a highly successful and innovative company that has developed a unique democratic environment.  Gore’s culture, which despises bureaucracy and hierarchy, has been credited as one of the key enablers of its explosive growth and market leadership over the past several decades as well as its expansion into entirely new product areas. 

At Gore, there are no job titles, bosses, or chains of command.  Instead, everyone is an “associate,” and team leaders are chosen by their coworkers.  New associates, who are interviewed and hired by groups of their peers, are assigned a “sponsor” to introduce them to Gore’s team-based culture.  New associates are then encouraged to join groups whose projects are best suited to their skills and interests.

Innovation and experimentation are encouraged, and mistakes are not punished.  It is therefore not surprising that Gore, which was started out as a small chemicals company in 1958, has been able to invent numerous industry-leading technologies that have dominated their markets, such as GORE-TEX fabric and Elixir guitar strings.  The 8,000 associates working at Gore’s 45 locations around the world currently generate over $2 billion per year.

Gore has been named to FORTUNE’s list of “100 Best Companies to Work For” in each of the past 12 years.