Meet Centigo: A Prime Example Of A Bossless Organization

Pim
Written by in Bucket list

We find ourselves crossing the wet streets of one of those rainy afternoons in Stockholm. An hour before, we arrived at the airport for a two day visit to this beautiful city. The reason we're here: to visit yet another pioneering organisation listed on our ever-expanding Bucket List.

This is a remarkable organization of 280 employees, 33 of whom are owners. But none of them is the boss!  Indeed, they have no managers. There’s no one person in the organisation with authority over another. This is a prime example of what academics call a bossless organisation.

Centigo

Centigo is one of the pioneers on our Bucket List. It is a management consulting company, and a subsidiary of the Business Wellness Group (BWG). Founded in 2002, Centigo consults on business development, change management, project management, and sustainability.

Designing a bossless organisation

Fredrik Palmgren (co-founder and board member) and Mikael Balkö (chairman) greet us. We tour the premises and get a feel for the Centigo culture. We note none of the employees has an office, including Fredrik and Mikael. We settle in one of their meeting rooms to learn more them.

In 2002, Fredrik and co-founders quit their consulting jobs to set up their own firm. The underlying principle was to design an organisation where everyone felt, and acted like, an entrepreneur.

Fredrik: “When we started Centigo and the Business Wellness Group we decided to build a platform for growth; a platform for people to grow on. The platform is first and foremost designed for people who dream about being an entrepreneur, or at least being free to make one´s own decisions as much possible. Which includes taking personal responsibility for the consequences (good or bad) of their decisions.”

Mikael continues: “We wanted to build a platform with as many possibilities for entrepreneurship as possible, and a structure in which people think of the company as their own. We wanted to eliminate the paradigm of employers on the one hand and employees on the other; a hierarchy where power is concentrated at the top, and where people sooner or later end up with corruption.”

“Instead we wanted to create a way to learn from one’s colleagues and from experience and thereby, step by step, grow to a full-blown entrepreneur and co-owner of the company. This means that everybody can become a co-owner if they want, and if they are prepared to contribute at a certain level.”

They saw they needed to create an operating system to handle issues a management team would normally handle. Mikael: “This operating system must be considered fair and transparent to all. To do this, we used democratic society and parliamentarianism as a source of inspiration.”

Long conversations produced interesting outcomes. That is when the foundation for how Centigo currently works was laid. Below, we share the most inspiring elements of their way of working.

Long conversations produced interesting outcomes. That is when the foundation for how Centigo currently works was laid. Below, we share the most inspiring elements of their way of working.

An internal market place

One unique aspect is Centigo’s structure. There are no bosses, and no managers. No one has authority over another. There are no functional departments. So, what do they have? Well, the organization resembles a market place. And employees act like entrepreneurs in that market.

It’s complex. Fredrik and Mikael explained it in great detail in a recent visit to our office in The Netherlands.

Fredrik: “Mikael and I realized that we created a company designed to the last detail. We had to do that to scale our company beyond the control of any one person.”

Fredrik: “Our operating system creates an inner market where people, and groups of people, can interact to exchange opportunities. In this way, we create a company that acts on a free market basis (in a market economy)—and that is a market economy in itself. In fact, it’s quite funny to realize that most large corporations in the “free world” are planned economies, similar to that of the former USSR.

“While we’ve created a market place, we don´t want a raw and capitalistic market with winners and losers depending on who are the strongest and the weakest. Instead, we want fair trade and a sense of fairness when it comes to dividing the fruits of the good business we all are part of creating.

“Here’s where our culture plays an extraordinarily important role. The fact is everyone is more or less is dependent on others to succeed. We have created a community and a harsh economic reality. It’s a balance within a caring culture where people know that if you give to others you will sooner or later receive.”

Roles and responsibilities

Each employee is part of a Business Unit and at least one Customer Team. Business Units are self-managing entities organized around an area of expertise (like, say, Retail, or Digital Transformation). They can also be organized geographically. Business Units consist of one or more self-selected teams. Employees choose the team they want to work in, based on their interests.

Customer Teams bring together employees from various Business Units (and thus areas of expertise) to deliver on a specific client project.

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Let’s explain the structure via the flow of work.

The Client Partner role at Centigo is responsible for sales and clients. Once they’ve secured a new project, they bring together a Customer Team with the required skills.

This is where the market place element comes in. Negotiations take place to link supply to demand. Consultants offer their services and Client Partners offer their projects. Team Leaders (coordinators) facilitate the process. They negotiate the scope of work and the accompanying compensation.

Fredrik stresses the importance of long-term thinking for both parties: “If Client Partners offer unacceptable compensation to consultants, there’s a big chance the consultants will say no to the project. But let’s say there’s not enough work and consultants do take the project – even for low compensation. In that case the consultants won’t be happy and they will surely remember that. In times with more projects they probably won’t be working with that Client Partner again – they will work with someone else. The Client Partner will then feel the natural consequences of not having done business properly.“

Consultants are never forced to accept a project.

As employees are responsible for selling their skills on the internal market, they also need to be aware of the accompanying aspects of entrepreneurial activities. From personal branding, to nourishing relationships, from training to personal development. All these aspects need to be managed by the employees themselves. Nobody else is responsible. While this may sound harsh, there’s a network to support each employee’s growth. This is part of the so-called network-based leadership.

Network-based leadership

This pioneering element of Centigo’s way of working replaces the traditional leadership role. They refer to it as network-based leadership. Each employee (including the owners) has three formal roles within the company.

  • One is as the Employee Responsible. This person has legal responsibility for the employee, and steps in if something involves the company in a legal responsibility.
  • The second is the role of Sponsor. This person coaches the employee based on his or her ambitions to grow—like an athlete’s trainer.
  • The third is the role of Pilot. This person coaches the employee in how to navigate within the organization. For example, what would be a smart approach if the employee wants to leave one Customer Team and join another, without damaging the relationship with his/her current Client Partner?

Every employee can (and is expected to) assume any of the three roles for 2-5 colleagues. These are based on a handshake. The employee chooses, the other accepts. This network-based model means all employees are connected via three connection points, covering all directions.

Bosses? No! Managers? No! Leaders? Yes!

At Centigo, you won’t find any bosses or managers, or titles like vice-president or managing director. But this doesn’t mean there are no leaders.

It is a common misconception about self-managing companies that there are no leaders. But this overlooks the natural leaders—people who accept responsibility, and people who motivate and engage others in pursuit of a certain outcome or vision.

As with any group of people, natural leaders emerge. And Centigo is no different. One only becomes a leader if there are followers.

For example, anyone in the organisation can take an initiative—from developing new products or services to finding new clients. The more one takes the lead in such ventures, the more he or she is regarded as a leader. As they say at W.L. Gore: “If you want to be a leader, you’d better find some followers”.

Base salary for all

Another thing that differentiates Centigo is the way they pay. All employees have the same base salary—whether a consultant, a client partner, or even a co-founder. This base (~3,000 EUR/ month) is not normal in the consulting industry.

But now comes the interesting part. Employees can add to their monthly base by extra effort. This is possible via the internal market place. Extra work/effort earns extra pay. From executing client work to bringing in new projects, extra effort leads to additional pay. Some employees earn several times their base pay, based on effort and value added to the organisation.

While financial rewards play an important role in the organisation, the culture does not focus only on money making, alone. For example, each year some employees take part in organizing the company retreat. This is a full-blown, conference-holiday mix that takes a huge amount of effort to organize. Those who organize it do so simply because they love the company or the opportunity. Others might contribute by opening up new opportunities in the market.

Entrepreneurship at Centigo is rewarded, in social and financial value.

A proven approach

The financial aspect is not the only benefit of Centigo’s organisational model. From the beginning, the company has been on a remarkable journey. Even in tough times, it has shown constant, well-balanced growth.

They were recognised as Sweden’s best employer in 2011 and also won “The Gazelle of the Year” in 2007, 2008, 2009 and 2010 for being the fastest growing company in their category. Below are some more results on Centigo’s development (source: Beatrice Elman):

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Organisational architects

While the above practices and structures are central to Centigo’s way of working, one thing underlies all of this—strong core values. Professionalism, entrepreneurship and balance are these underlying factors. It became clear during our conversations that values are the foundation on which they have build this remarkable organisation.

Besides laying the foundation, Fredrik, Mikael and other key figures play another important role. They are architects of the system in which they and their colleagues operate. They refined the system that led to these outcomes.

Via continuous adjustment, and a reliance on the core, they have created a playing field on which employees can become flourishing entrepreneurs.

All of which adds up to Centigo—Swedish, Bossless, Amazing.

Pim
Written by Pim
1 year ago

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Replies (1)

Pascal

Pascal

Sorry guys, I just started the article and one question came to my mind. Maybe you mention it later but if not maybe you can help me with that: How is the compensation model (btw. I hate that word "compensation") set up within the Centigo? Are there clever approaches or best practices in other companies you already visit? Looking forward to hear from you.

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