Morning Star: Pioneering Self-Management in Manufacturing

This blog post is part of 50+ case studies of self-managing organizations we created for the 2024 inaugural ZeroDX awards. These organizations embody the principles of RenDanHeYi in their work structures:

• Zero Distance to customer: Decision what to build is based on insights from the marketplace

• Autonomy: Small teams with full decision-making autonomy enable speed in execution

• Shared Rewards: Everyone in the micro-enterprise participates in its financial success.

Introducing Morning Star

Morning Star, founded in 1970 by Chris Rufer, is the world’s largest tomato processor, based in California, USA. The company processes tomatoes into a variety of products such as paste, diced tomatoes, and purees. With a permanent staff of around 500 year-round employees and an additional 2,000+ seasonal workers, Morning Star operates across three processing facilities in California. The company is renowned for delivering superior customer value through its focus on teamwork, reliability, innovation, and sustainability.

Morning Star is an excellent example of RenDanHeYi principles in the food processing industry, a philosophy the company has embraced for over 30 years. The company is unique in its approach, with no traditional bosses and an organizational structure based on two guiding principles: voluntary interactions and honoring commitments. This self-managed, agile structure allows Morning Star to thrive with a workforce driven by personal missions and peer-to-peer accountability, making it a leader in its field.

Organizational Structure

Morning Star operates without traditional hierarchical roles or titles. Instead, the company functions on a self-management model, where employees are treated as professional colleagues with high autonomy and responsibility. At the core of this innovative structure are two fundamental principles:

• Voluntary interactions: Employees should not impose their will on others; all interactions must be voluntary.
• Commitment honoring: Employees are expected to honor the commitments they make to others, fostering trust and mutual respect.

This structure empowers employees to take full ownership of their roles, promoting a culture of accountability, transparency, and continuous improvement. The dynamic nature of roles ensures that employees can adapt and innovate as needed, driving both personal growth and organizational success.

Customer Centricity and Autonomy

At Morning Star, customer satisfaction is at the heart of everything the company does. Each colleague has a personal mission aligned with the company’s mission, vision, and principles. This alignment fosters a culture of ownership, where employees take full responsibility for their work and continuously strive to meet customer needs.

Colleagues exercise their inherent power to address customer needs promptly and innovatively, ensuring a high level of responsiveness and personalized service. This autonomy helps Morning Star maintain strong, long-term relationships with its customers, enhancing loyalty and trust.

An excellent example of customer centricity is the way a member of the team at Morning Star responsible for obtaining new sales opportunities influenced the company’s distribution network. Through conversations with customers, he learned that customers located in remote destinations felt they were paying too much for Morning Star products. After consulting a few colleagues, it became clear that multiple distribution centers could solve the problem. Fast forward to a few months later, this team member and his colleagues were setting up distribution centers around the country.

Internal Culture and Colleague Engagement

Morning Star’s culture is deeply rooted in principles of self-management, transparency, and mutual accountability. The company’s Colleague Letter of Understanding (CLOU) outlines personal missions and responsibilities, fostering a sense of ownership and alignment with organizational objectives. It makes expectations around roles explicit and makes it easier for everyone to know who does what in the company.

The process for activating a CLOU includes the following:

1. Each colleague negotiates a CLOU and documents the corresponding ongoing commitments affecting the work of their colleagues. Most colleagues self-select between 7-12 fellow colleagues with whom they work closely and negotiate CLOU commitments.

2. Each CLOU identifies the commitments by and between colleagues: services, deliverables, resource requirements, goals, and performance metrics called Steppingstones (considered steppingstones toward perfection whether or not perfection is ultimately realized).

3. Colleagues reference the CLOU to hold themselves and others accountable for agreed-upon commitments. It is a dynamic instrument that can be re-negotiated at any time.

Compensation at Morning Star is determined through an annual self-assessment and feedback process where colleagues negotiate their own salaries with local compensation committees based on their contributions and peer feedback. The compensation process promotes transparency, fairness, and candor by providing a forum for full and open discussion of performance.

Another key collaborative process is Gaining Agreement. Whenever a conflict, disagreement, or problem arises, Morning Star colleagues have an affirmative obligation to engage in direct communication. The process is simple:

1. When a colleague senses a difference with another colleague, they directly approach that colleague with a request for change in a private conversation. If desired, colleagues may consult with a chosen ombudsman to provide private, confidential advice.

2. Difference not resolved? The colleagues may engage the services of a third colleague to provide a fresh perspective on the request for change. The singular role of the third colleague is to give his/her opinion and advice, not to judge. It's still up to the two original colleagues to find common ground.

3. Difference still not resolved? A panel consisting of 3-7 people with various perspectives gets involved to provide additional opinions and advice. Once again, they are there to offer their best advice, not to render judgment.

4. Difference still not resolved? The colleagues have agreed in advance, by subscribing to the Morning Star Colleague Principles, to document their differences in writing and submit them to the company president for possible further investigation and decision.

5. Most colleagues we spoke to believe it is rare that disagreeing colleagues engage the company president (or a designee) as a final decision maker. Interestingly, there is no published information about this, since colleagues only engage in disagreements that directly affect them as participants, willing mediators, or ombudsmen. The vast majority of disagreements are handled exclusively by the people involved.

Conclusion

Morning Star is a forward-thinking organization that has successfully integrated self-management principles with a relentless focus on customer satisfaction for over 30 years. Their innovative approach to organizational design has allowed them to lead in the food processing industry while proving that self-management can thrive even in traditional sectors. By fostering a culture of autonomy, accountability, and transparency, Morning Star continues to excel in delivering high-quality products and building lasting customer relationships.