10 Elements Of A Self-Managing Company

Joost
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- 19 min read

Earlier this year, I was contacted by Aitor Alapont, the CEO of P4Q, a Spanish manufacturer of electronic systems for things like solar trackers, windmills, and medical devices. The progressive company employs over 200 people in Spain, about 50 in New Mexico, USA, and another 30 in Shanghai, China. Their unique way of working is worth sharing, as it provides plenty of inspiration on how to structure and organize progressive companies.

P4Q's way of working is based on the 'ner (nuevo estilo de relaciones) philosophy,' as pioneered by the NER Group — a group of highly progressive companies around Bilbao, Spain.

This animation video explains the basics of NER's approach to self-management:

P4Q's handbook

P4Q adopted the NER way of working in 2018 after they ran into organizational problems when they grew the firm to about 120 people. The move was approved via a 83% vote during a company-wide assembly.

After adapting NER's way of working, they subsequently adapted it even further to fit their own particular needs. They have documented their way of working in a handbook called P4Q OS 1.0.

In the introduction, they write, "We have baptized this handbook 'P4Q OS 1.0.' It is named after the operation system (OS) of a computer, as these act as the basis of each computer on which all its applications run."

P4Q's handbook operates in a similar fashion. The handbook acts as the basis on which they define the practices and tools to bring their way of working to life. It also guides all the activities and interactions of the people at the company.

As such, everyone in the company must agree to work according to the handbook. The handbook, however, is not a static document. It evolves over time, as they are in a constant search to develop ”an organization that uses self-management as a tool to manage the dynamic future with decentralized decision-making."

"We assume this handbook is alive and evolving, it continues. "It is continuously defined and updated by the people and teams themselves — just as operating systems moved from MS-DOS to Windows in order to keep running newer applications."

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10 important concepts

The latest version of the handbook highlights at least 10 important concepts:

  1. The Common Project
  2. Plan of Ideas and Objectives (PIO)
  3. Client-Chain Organization
  4. Central Teams
  5. Fixed Roles
  6. Evolving Roles
  7. Role Responsibilities
  8. Regular Team Meetings
  9. Integrative Decision Making Process
  10. Team Culture Meetings

Let's dive into each of these concepts, one by one.

1. The Common Project

The common project is the reason for the company to exist. It can be seen as its purpose — the identity of the company. This is what makes the company unique and different from any other.

In 2019, the company stated the reason for their existence as follows:

"The people of P4Q want to participate in a common project. The common project is based on people and focused on customers and efficiency. This is achieved through self-managing teams that act with transparency and trust. The teams work autonomously, but with responsibility and commitment to the project. All people share in the profits of the company, and try to involve as many people as possible to the project, as we are part of society and the community we live in. We also promote equality and respect diversity among people."

2. Plans of Ideas and Objectives

Each year, the entire team at P4Q formulates a strategic plan called Plan of Ideas and Objectives (PIO). The interesting thing here is that all the people within the organization are invited to work collaboratively on the development of this annual strategic plan.

During the development of the plan, anyone can participate in the process by contributing, discussing, and improving the ideas that come from their own teams — or from the teams they are working with.

There is always someone appointed as the facilitator of this process. This person is supposed to guide the interactions between people and also provide the necessary tools to promote interaction between the different teams.

The strategic plan must always start from the client's wishes, and must also contain data about the necessary investments and resources needed to make the plan a reality.

As a final condition, the plan must be ratified by all teams before it is valid.

3. Client-Chain Organization

The Client-Chain Organization is a concept that dictates how the company must be organized so that teams work in one chain towards a particular client.

Each team is required to understand its function within the chain so the chain never fails. Teams should also prioritize the tasks related to satisfying client needs over the needs of internal teams.

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The handbook describes it as follows:

"All of our activities must maximize our relationship with clients to force us to be in continuous alignment with their needs, and to always seek maximum efficiency in all our activities. We must also ensure the quality of our services in a sustainable way, with the lowest possible cost, but within the terms that the client requires from us. We must also innovate the products that clients demand from us."

P4Q regards a team as a collection of different roles, being either fixed roles or evolving roles (more on this below). Anyone fulfilling one or more roles is considered a team member.

4. Central Teams

Next to all the decentralized teams that work in their "client-chains", there are also three "central teams": the pilot team, the commitment team, and the P4Q project developer team.

4.1 Pilot Team

The pilot team consists of all pilot representatives (more on this below) from all teams in one 'Client-Chain'. The team meets every month for approximately two hours in pilot meetings to discuss the firm's monthly performance and makes any decision that impacts the entire or a large part of the firm.

It's important to note that the pilot team is not your average management team. It has the same functions (i.e., analyzing data and making decisions), but the nature of the team is completely different in at least five different ways:

  • The pilot team is made up by people that represent their own respective teams. This means that all teams of the firm are represented in pilot meetings.
  • The members of the pilot team are chosen by their own teams.
  • The pilot meetings are completely transparent to anyone in the firm. All people in the organization can attend the meeting — if they wish to do so — either in-person or via streaming. Moreover, the minutes of the meeting are distributed to the entire workforce.
  • The topics that are discussed during the pilot meeting are defined by the entire workforce, not just the pilots that lead the firm.
  • Decisions by the pilot team are made by consent — not by hierarchy or voting.

The pilot team includes a role called the project coordinator, who leads the pilot team and acts as a sort of CEO of the firm. However, this person does not have the final say in the decision-making of the pilot team, as decisions are supposed to follow the Integrated Decision Making Process (more on that below).

The handbook outlines the following responsibilities for the pilot team:

  • Presents the PIO to the entire workforce, makes sure it gets approved, and distributes its final version among all members of the firm.
  • Discusses and decides on things such as investments, hiring, serious expenses, important projects, etc. In short, they decide on all things that have an impact on the overall organization.
  • Regularly monitors the relevant performance indicators of the organization, as well as its financial statements.

4.2 Commitment-Planning Team

This team, comprised of all the commitment representatives (more on this below) of all teams in one 'Client-Chain', meets weekly to develop weekly planning proposals for production based on the order book, resource availability, and other relevant parameters. The team needs to ensure that the commitments made by P4Q’s teams are in line with the planning of when orders and projects are delivered to clients.

The commitment-planning team meets for approximately one hour a week to plan future work and commitments to ensure the company can deliver their weekly goals and gauge if they are still on track to reach the strategic goals as defined by the PIO.

The handbook states that this team must have knowledge about the long-term workload of the organization, whether they are able to meet the deadlines as written in the order book, and whether there is a need to hire more people or invest in new machinery. They must also ensure they have knowledge about process and production costs and times, what deadlines to provide clients, and whether the organization is profitable or not.

4.3 P4Q Project Development Team

This team, comprised of the team developers (more on this below) of the different teams, exists to support and promote the evolution of all people in the organization. They are there to promote diversification and competitiveness within the firm.

The handbook outlines the responsibilities as follows:

  • Supports change within the organization. Spreads the foundational values of the organization and facilitates training related to self-management and distributed decision-making for each and every team.
  • Spreads financial knowledge about all aspects of the organization to all people in the organization.
  • Interacts with the P4Q Board and Ownership to monitor the progress of the firm’s strategy.
  • Promotes the competitiveness of all P4Qs plants by developing collaborations and synergies between them.
  • Promotes the diversification of new products and business that will allow the organization to evolve further.
  • Promotes the public image of P4Q to attract new talents and clients.
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5. Fixed Roles

Each year, P4Q teams elect members to four fixed roles: the pilot representative, the commitment representative, the team developer, and the facilitator.

These are all part-time roles that are supposed to take about 10% of someone's workload. Also, no person can take on more than one fixed role.

5.1 Pilot Representatives

All teams at P4Q must select a member that represents the team during pilot meetings. The handbook outlines the following responsibilities for this role:

  • Represents the team during pilot meetings. This includes decision-making on behalf of the team to ensure the proper functioning of the entire firm.
  • Participates during pilot meeting. This includes bringing proposals to the agenda, participating in decision-making, and positively contributing to agenda items by sharing knowledge, needs, and ideas.
  • Prioritizes tasks and clarifies the distribution of tasks and roles within their team.
  • Prepares for meetings in advance and facilitates the preparation of proposals.
  • Shares information inside and outside its team and shares relevant agenda items for the pilot meetings with own team.
  • Appoints a substitute representative when unable to attend meetings.

5.2 Commitment Representative

The teams must also elect a team member that represents them during the commitment meetings. This ensures the team can optimize its productivity and facilitate the alignment, coordination, and exchange of ideas & knowledge with the other teams.

The handbook outlines the following specific responsibilities for commitment representatives:

  • Represents the team during commitment meetings. This includes participating in company-wide decision-making on behalf of the team, identifying and sharing potential team challenges, and sharing knowledge with other teams.
  • Tracks team data (such as deliverables, customer orders, deadlines, etc.) to remain informed about the performance of the team regarding meetings its commitments.
  • Guarantees that goals and commitments are met.
  • Prepares for meetings in advance.

5.3 Team Developer

Teams also need to elect somebody to the role of team developer. This role is responsible for optimizing the team's culture and the development of the team and its members.

It must be noted that this role's responsibilities do not cover any operational decisions of the team. Instead, responsibilities are outlined as followed:

  • Represents the team during the monthly meetings with the other members of the P4Q Project Development Team.
  • Promotes best practices within the team. This includes the promotion of best practices related to the purpose and responsibilities of the team, how roles are distributed and fulfilled, and how the team collaborates and shares knowledge. If training is needed, the team developer is responsible for the organization of it.
  • Supports the growth and development of all team members.
  • Welcomes new members to the team. This includes onboarding, providing support during the first working period, and periodically evaluating the progress of new team members.

5.4 Facilitator

Each team at P4Q is required to hold regular team meetings (more about that below) where they make decisions and plan future tasks to make sure the team commits to its objectives.

The facilitator is elected by team members as the one that must ensure these meetings run smoothly, that the team dynamics stay healthy, and that decisions are made in an effective, efficient, and enjoyable way.

The facilitator has a few concrete responsibilities outlined in the handbook:

  • Acts as facilitator in team meetings and ensures a healthy and harmonious course for each meeting. This includes coordinating the setup of a meeting agenda, managing the meeting time, and taking care of any follow-ups after the meeting. It also includes the responsibility to ensure that all team members receive equal speaking time, and the facilitation of an evaluation at the end of each meeting — in the spirit of continuous improvement.
  • Enables adequate communication between team members.
  • Appoints a substitute facilitator when unable to attend meetings.

6. Evolving Roles

Team members choose and assign roles in their own teams as they see fit — as long as each person takes on at least one explicitly defined role.

Each role needs to be named in a way that clearly describes its function. The following three criteria must be defined for each role as well:

  • Its purpose, i.e., the reason this role exists for organization to function well.
  • One or more fields, which are the areas the role is the main owner over.
  • One or more responsibilities, which are the main activities this role will engage in.

Moreover, each member of the organization has the following responsibilities for each role they agree to perform:

  • Projects. These are larger projects that require multiple tasks to be executed in order to be completed. People are required to periodically examine the best way to complete larger projects, which includes defining, synchronizing, and prioritizing next actions to bring the project forward.
  • Next actions. These are the relatively smaller tasks that people can execute immediately; tasks that are useful to be completed in the absence of other priorities.
  • Develop challenges. These are possible tasks that can be executed efficiently and effectively and add more value to the organization. This asserts that people are required to identify opportunities for improvement and innovation within their field(s).
  • Improve role. Team members are also required to identify and develop opportunities for the improvement of their own role(s).

The person that fulfills the role enjoys the authority to perform any other tasks or actions they think are reasonably helpful for the organization. Perhaps more importantly, no person in the organization can command people or exert control over people in other roles unless the person who fulfills that role has provided explicit permission to do so.

7. Role Responsibilities

At P4Q, a role comes with three main responsibilities: transparency, processing, and prioritization.

7.1 Transparency

The person in a role has the responsibility to provide transparency whenever another team member inquires about something in the following areas:

  • Projects and next actions. Roles must share any projects and next actions they are responsible for in their team.
  • Relative priority. Roles must share how they prioritize their projects and next actions in respect to other pending activities that may require their attention or resources.
  • Projections. Roles must provide a timeline that states when they plan to complete a project or the next action they are responsible for. Only a rough estimate of a timeline is expected here, detailed planning can come later.

7.2 Processing

Roles have the responsibility to promptly process any message or request from team members in the following manner:

  • Processing requests. Team members can request a role to further develop the work within their responsibilities to bring that role to the "next level". If there are no projects or next actions planned for that role, the person fulfilling that role must develop and execute next actions they consider to be reasonable.
  • Requests for project and next actions. Team members can make a request for another member to add a new project or next action to the role they are responsible for. As the one fulfilling that role, you must take this into consideration. When you think it is reasonable you must accept it and act upon it. If not, you have to explain your reasoning, or propose an alternative next action or project you believe can meet the requester's need.

7.3 Prioritization

Roles have the responsibility to prioritize their focus, attention, and resources as follows:

  • Process to execute. First, roles need to adhere to all the responsibilities as described. This includes dealing with the requests made by other team members by defining and executing the next steps regarded as reasonable. This does not mean that requests by others need to be executed directly — the person can come up with a timeline and plan of action outlining how to deal with the requests.
  • Requests for enforced meetings. A team member can request a meeting with the entire team to deal with their request. People must prioritize attending these "enforced meetings" above their regular work. However, people can still decline this request if they had other plans previously scheduled during the proposed meeting time.
  • Team needs over individual goals. Roles must always prioritize team needs over their own needs. In addition, the role is also responsible to plan its own time, attention, and resources in such a way that the needs of both the team and the role are satisfied.

8. Regular Team Meetings

Teams are supposed to organize regular meetings to facilitate the alignment of the goals and work of different team members.

All members of the team are invited to participate in each meeting. However, when somebody is not able to attend, the facilitator can cover for that person.

Team meetings are facilitated according to a fixed format following six steps:

  • Opening round. The facilitator asks each team member to check in by sharing any thoughts, feelings, or any other comment. No responses to these comments are allowed.
  • Review of previous actions. The facilitator asks each team member to report on the tasks that have been done, and any that are still in process.
  • Review on project progress. The facilitator asks each team member to share data on the progress of the projects their role is responsible for.
  • Plan and prioritize. The facilitator then produces an "agenda of challenges" on the fly. The challenges are subsequently dealt with according to the “Integrative Decision Making Process” (more on this below).
  • Closing round. The facilitator asks each team member to share a final reflection or any other thought that has been prompted by the meeting. No responses to these comments are allowed.

9. Integrative Decision Making Process

Team members are supposed to make decisions during meetings, as well as dealing with conflicts, according to the Integrative Decision Making Process.

The process involves six steps:

  • Submit proposal. The process starts with a team member (the "initiator") who wants to bring in an item (a "challenge") for discussion. The initiator presents a proposal to deal with this challenge or may ask other team members to help them in preparing a proposal. In the latter case, it is essential to note that the jointly developed proposal should only address the initial challenge raised by the initiator and therefore cannot address other challenges or concerns raised by other team members.
  • Clarifying questions. Once the initiator has presented their proposal to deal with the challenge, other team members have the opportunity to ask clarifying questions to better understand the challenge and proposal. The initiator can either answer all questions or refuse to answer them. The facilitator must make sure that other team members do not express their personal opinion about the proposal and avoid discussion of any kind.
  • Round of reactions. Once there are no more clarifying questions, all team members (except the initiator) can share their reactions to the proposal. The facilitator must make sure that team members share their reactions in turns, one by one, without involving other team members in a discussion or any other kind of exchange. Moreover, responses should be focused on the proposal — not on the reactions of others.
  • Amend and clarify. After the round of reactions, the initiator may respond to the comments made by other team members and make any necessary adjustments to their proposal. However, the idea here is that the adjustments should be focused on improving the proposal to better address the initiator's challenge — adjustments should not be made to address issues raised by others.
  • Round of objections. Now, each team member can share any objection against the proposal's adoption. The facilitator must ensure that no discussion occurs in this round and that each objection is valid and related to the conflict or decision being dealt with. If there are no valid objections, then the facilitator records the proposal as adopted, and the process comes to an end.
  • Integration. In the case of a valid objection, the facilitator must conduct a discussion between the team members to make the necessary adjustments, thus resolving the objection. The facilitator can only mark an objection as resolved when the objector confirms that the adjusted proposal will not raise a new objection. This process must be repeated until all valid objections are dealt with. Proposals at P4Q are adopted only when all team members consent to the proposal — not by consensus or majority vote.

10. Team Culture Meetings

Regular team meetings at P4Q are focused on discussing operational needs of the team. But the teams are also required to hold another kind of meeting — one that aims to improve how they relate and work with each other.

In these team culture meetings the members will:

  • Define, modify, or eliminate roles
  • Define, modify, or eliminate team policies
  • Elect new people for the fixed roles

Anyone in the team may propose the change of something in the team culture by submitting a proposal as prescribed by the Integrative Decision Making Process.

The team developer is responsible for scheduling these meetings, and is therefore also responsible for the promotion of a healthy team climate.

The facilitator should ensure that these meetings are solely focused on the culture of the team — not on any operational aspects or other unrelated issues.

The end

Alright, that concludes the 10 points. Yeah, I know, this was pretty extensive. Still, it provides a good image of how structured and well-organized self-managing organizations are in reality.

I hope it provided enough inspiration to kick off your own organizational experiments to become more progressive.

Ready?

Are you ready to become more progressive in your way of working? Then take a look at our Academy and explore what you can learn from pioneers such as P4Q to make your organization human-centric.

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