Becoming Self-Managed: 2 Approaches, 100 Case Studies
In the summer of 2017, we flew to Bilbao (Spain) to visit one of the most inspiring companies we've seen in 4 years of travel. The company? K2K Emocionando. Their business? Turning traditional companies into highly progressive ones. Their success? Unparalleled.
If you haven't heard of K2K and their adventures, be sure to check out these earlier blog posts:
- The Liberation Of Factory Workers: From Near Bankruptcy To Double-Digit Growth: The story of founder Koldo Saratxaga, and how he liberated factory workers when he was CEO at luxury coach manufacturing company Irizar.
- A Radical And Proven Approach To Self-Management: The unusual transformation approach of Koldo's consulting company (K2K) has successfully transformed 50+ companies toward self-management.
If you've read those stories, you will know why we're so inspired by their work.
A few weeks ago, I caught up with Jabi Salcedo of K2K, eager to learn about their latest developments.
Turning it up a notch
Jabi starts with a short trip down memory lane. "Around the time you visited us in 2017 we started to rethink our work. The reason was we had been working from 2005 to 2017, and over this period we were only able to transform 50 companies".
I laughed. "Only 50 companies?", I responded, knowing damn well what their team of just 7 people had achieved was unique in the world.
Jabi: "Correct, it's only 50 companies. If you take the Basque Country, we have around 22,000 small and medium-sized companies. 50 out of 22,000 is not a big thing. So, you can see this speed is not the right speed. Two years ago, I was 57 years old and I estimated I was going to be working for another 10 years. So, if we continued working at the same speed, we would be able to transform another 50 companies. That isn’t enough to create a movement."
Another reason to rethink their approach was that they started receiving lots of requests from companies outside of their region.
Jabi: "We weren’t able to do much. We showed people who visited what we were doing by sharing our story. But this wasn't enough to change anything. People now understood that work could be organized differently, but knowing that wasn't enough for them to go back to their companies and successfully transform them.
"This created a situation that made us think. Why were we showing what we were doing if we couldn't continue to support them? We couldn't fly to the Netherlands or Portugal to support companies there with a team of only 7. Plus, training people so they can apply our radical approach takes a long time.
"All of this made us think."
Chef's special? Or a la carte?
After some deliberation, K2K adopted a new approach. It's less radical than their signature approach, but embraces a lot of the principles that make it so successful. Plus, it allowed them to scale more quickly and grow the team without degrading the quality of their support.
The biggest difference is that it's about co-creation, and not about an approach dictated by K2K. In the 'radical approach' K2K determines how things get done. Of course, employees are involved and, very importantly, vote for change, but once the transformation gets going it is mostly directive.
This, by the way, is an interesting paradox: namely, changing to a participative culture in a top-down fashion. Clearly, they've proven it works, as have other pioneers on our Bucket List.
Jabi compared it to going to a restaurant. You can go for the 'chef's special' or for 'a la carte'. When you go for the chef's special you don’t decide for yourself. You trust the chef to make a good decision for you. If you choose a la carte, you select from options the chef has provided.
You can compare K2K's original approach to the chef's special. The new approach, however, is more 'a la carte'.
Here is what it looks like.
The first step is to understand the current situation. They interview nearly everyone in the company. These interviews, plus K2K's analysis, provide a diagnosis of the significant tensions in the company.
Pretty standard consultancy stuff, right?
Jabi: "Yes. But there are two things important to mention. First, we create a safe area so people don't get into trouble because of what they say. We do that by asking to be alone with staff members during these interviews (i.e. without leaders or owners), and we make their input anonymous.
"Secondly, we present our findings to both owners and the entire company, making them transparent."
Based on the diagnosis, the K2K team defines several change areas. Obviously, the focus areas are based on years of experience introducing more progressive ways of working.
- Creating financial transparency
- Changing the organization structure
- Reducing hierarchy
- Closing the pay gap
The recommendations are presented by K2K to the board of directors. If they buy in, they are also presented to the staff at a general assembly.
At the general assembly, it's up to staff to vote. Through a simple question it becomes clear whether employees are eager to make this change happen, or not.
"Do you want to move forward in these change directions?" Potential answers are:
- Yes, but I have some doubts
- No, I have objections I want to clarify before the start
Voting is anonymous. If less than 80% of staff vote in favor of the change, the project will be stopped. If more than 80% vote yes, they move to the next phase.
4. Project work
The next step is to turn the suggested changes into projects. Each change is picked up by a different group of volunteers. The goal for project teams is to develop proposals that will help the company move in the desired direction.
For example, when it comes to reducing the hierarchical structure of the organization, it's up to the project team to come up with a proposed design. Or, if closing the pay gap is one of the change areas, it's a project team's responsibility to come up with a way to do that.
Before the project work begins, some conditions need to be met, for example:
- All teams consist of volunteers. Nobody is forced to work on any of the projects.
- Teams have a minimum of 6 and a maximum of 12 employees.
- All project work is done during normal working hours. It cannot be added to their normal workload. Time must be set aside for the projects.
- Project teams are allowed to get all the information they need. Complete transparency from the owners and leaders is given so they can make the best possible decisions.
The aim is to get as many as possible involved in these project teams. This is why people are only allowed to join one project team. Clearly, this increases ownership and support for the solutions.
The project teams have a set timeline to finalize their recommendations. Usually, this takes about 3 months.
5. Vote #2
The project teams present their recommendations to the board. Once the board approves them, they present to the rest of the employees. Then, it's voting time again.
For each project, teams again vote in favor of or against the proposed changes. Each project is handled independently. Some may make the cut (if >80% vote yes) while others might get rejected.
Change obstacles Jabi explains that at one recent client 2 out of 5 vital projects were rejected. These projects were about:
- A better balance of salaries and rewards (68% voted yes).
- The structure of the organization (72% voted yes).
Jabi: "We were shocked. What were we going to do? Both projects were extremely important if we wanted to make significant change. Without these, the rest would be not much more than make-up. We didn't know what to do. So, we told the general assembly we needed some time to think."
"After some thinking we proposed an extension of the two projects. The employees agreed that we would jointly run several sessions where everybody was invited. Those who showed up were trying to find a way forward for these two topics. We were especially eager to bring in the people who had voted against. Together we could try to improve the proposed changes."
The other projects were put on hold until these were discussed. The outcome? One received a 100% approval vote, the other 98%.
By doing this, it took K2K and the client more time (about 3 months) to get enough support for the changes. But as Jabi mentioned, these projects were so important in moving to a progressive organization that without them the entire change process wouldn't have been as profound.
The change projects approved by >80% of the votes are put in motion. Actions to be taken depend on the specific project and are detailed in the recommendations from earlier phases. (In a future blog post, I'll dive into an example of such a change project - changing the organization structure.)
The teams lead the execution. K2K is only there to facilitate and provide feedback. Jabi: "The implementation is a lot easier if you spend time co-creating with all staff. Most questions are already answered while you're in project teams preparing your recommendations for the company."
This is clearly a big advantage of this co-creative process. In the more radical (original) change approach of K2K, the company staff votes only once—at the beginning of the process. That vote is more like a vote of confidence in K2K, and the overall change direction. But it's not so clear on specifics. K2K provides most of the answers during the change, while in the new approach the staff create the solutions.
Growing the movement
So, what about the success of this new approach?
Jabi: "From 2005 to 2017 we transformed 50 companies. From 2017 to today, we transformed another 50 companies. Many of these 50 have not yet gone through a complete transformation. Many are still in the middle of the change process, but the results so far are promising."
An interesting paradox: changing to a participative culture in a top-down fashion. Clearly, these companies show that it works.
"To be able to support more companies we've grown the team. Besides the core team in Bilbao, we now have people in Barcelona, Madrid, Portugal, and Mexico. Someone from the core team works with people in those cities to jointly support our clients through change."
The movement is spreading, and K2K is delicately trying to balance quality of transformations on the one hand with speed of growing the movement on the other.
Jabi: "An important part of growing our impact is that we're currently running seminars to explain in detail how we work. We do this to get people inspired to start their own transformation and to share what we've learned over the past 15 years."
Soon, K2K will offer a free introductory masterclass on their approach. For more information, go to this link. In 2021, they'll run a 5-week seminar which explores the various topics in much more detail. More info here.
Plus, at Corporate Rebels we'll be collaborating closely with K2K to spread their unique transformation experience to our community and beyond. This is stuff more people should know about. And K2K will become part of the Online Academy that we are currently setting up. For some early-bird information, check out the Online Academy page.
Join the newsletter
Stay updated on all things Corporate Rebels. Subscribe to the newsletter:
The 2022 FIFA World Cup has been appearing in the news for all the wrong reasons and is already one of the most controversial sporting events that have been organized. There have been many concerns about Qatar’s suitability as a host country but even more touched on is the treatment of workers hired to build the infrastructure. This is something that FIFA should have been aware of when the decision was made to host the event in Qatar due to the knowledge that the country relies heavily on migrant workers and its exploitive labor system.
For the last two years, we've been working on a book about Haier, the Chinese manufacturing firm reinventing management as we know it. Writing this book was a long, interesting, and intense process, but we managed to wrap up the final manuscript of the book earlier this year, titled "Start-up Factory." Although the book will only be published in September 2022, we gave Corporate Rebels Academy community members early bird access to the final manuscript. Here is a selection of their reactions to the book.