Can you imagine your company without management, where the employees run the company together? When the CEO is more of a coach than a director and people respect each other more and work better together. Or even that the employees are more important to the existence of the company than the company’s profits?
We already have companies like that. Some are founded with this idea in mind, others are transitioning to turquoise management principles from the “traditional management process”.
The principles of turquoise management of a company are good intentions beyond mere profit, respect for people as whole beings and the development of self-management and involving people in decision-making.
What kind of character should such management have? What are the risks of failing to do so? And for which companies is this style appropriate?
The first reactions are generally the same: employees whose companies switch to “no-boss” management want an immediate pay rise and extended holidays. They discuss and agree together but then look at the internal financial results. They find that the company simply can’t afford such benefits and back out of the plan. The model where all employees decide on the direction of the company and the CEO just advises them is becoming more and more common in the Czech Republic. Owners praise the greater loyalty and satisfaction of people and say they are more resilient in times of crisis. At the same time, they warn that there is definitely no place for slackers in such companies, nicknamed turquoise.
Michal Šrajer from Happiness at Work, for example, has observed a more frequent shift to collective management. “It’s definitely becoming a bigger issue than it was two or three years ago.” Šrajer sees interest from about four dozen IT companies, as well as non-profits and service companies.
The reason, he says, is the changing society and the more frequent crises it is going through. “In a more traditional organisation, all the external pressure is on the top of the hierarchy – on top management, which has to deal with it.”
Indeed, the main principle of the turquoise organisation is self-management. In the traditional sense, such companies don’t have bosses, and all employees are involved in decision-making together. “A turquoise company has a flat structure and the line of middle and senior management is eliminated. That is why these organisations are called ‘bossless firms’. But appearances are deceiving. Even such a company must be clearly managed by the top management,” says Lucie Sedláčková, headhunter and owner of the recruitment agency Fenix Search. But she has different tasks than a regular boss.
“The CEO is more of a coach than a director,” adds entrepreneur Vratislav Zima. He decided to reorganise his development studio MeguMethod two years ago, according to the turquoise principle. Now, apart from the top management, there are only separate groups that are formed for a specific purpose, for example, to develop a product. “They decide on their direction and discuss it with other groups.”
Zima is then approached by his employees for advice. Every decision they make, the founder says, must be based on data and they must be able to defend it to their colleagues. According to Zima, employees are far more respectful and collaborative in a turquoise-driven company.
Martin Bazala, CEO of software firm Raynet, which has been running in turquoise for eight years, agrees. Even his forty employees work independently and have divided competencies among them – marketing, development and customer support. In addition, each of these teams has its own “caretaker” who gives feedback to all of them on their work three times a year.
In addition, they also give each other irregular feedback on their failures. “Any failure or drop in performance is felt terribly,” says Václav Prak, who is in charge of marketing at Raynet. Anyone from the company will have a frank discussion with a person who has failed. “But of course, it always depends on who it is and what it’s about. If he’s in the company for a short time, he can be fired. But man is not a machine and has some fluctuations, so sometimes it’s natural.”
According to Páral, they don’t even count on someone slacking off. “That is unacceptable. We just have to have people who live it and are not just here to work.” In the time they have been operating under this regime, Bazal said they have had virtually zero employee turnover. In fact, if someone is unhappy, they have the space to say so at regular meetings where they give feedback to the company, including whether their salary is satisfactory. In addition, everyone in the company has access to the company’s financial results and business plan, as well as the salaries of all colleagues.
However, the responsibilities that employees have in these systems may not be comfortable for all of them. “Companies often come up against this regime in times of transition. Not all the people who were there before are willing to accept so much responsibility alongside freedom. So often some people have to leave the organisation,” says Šrajer.
In addition, the transition to collective management usually seems profitable at first. “But if they stick it out and succeed, it will pay off in the long run,” the expert believes. For the time being, however, it is possible to operate under this regime rather within small and medium-sized companies, while Šrajer cannot imagine it for larger ones at the moment. “It’s not a completely simple change. I think that these organisations will emerge, gradually grow and then perhaps take over from the traditional ones.”
However, it is still a rarity in the Czech environment. “A lot of people want to work without bosses, but few people can imagine how it works in practice,” says Jan Klusoň, a corporate culture expert and CEO of the Czech and Slovak branches of Welcome to the Jungle. In the future, however, he believes that more and more companies will start trying this model. In addition to IT companies, which by their nature are better at adapting to change, turquoise leadership can also be imagined in education, communication services or smaller manufacturing companies.
The answers can be found in this article in the magazine Hospodářské noviny, to which we have contributed our experience on 14.04.2023: Hospodářské noviny
Lucie Sedláčková, owner/Headhunter