A Handbook Of A Self-Managed Organization

Joost
Written by
- 16 min read

Recently, we visited P4Q and Panefisa in Bilbao to shoot footage for our Academy courses. Some of you may recall how I've already shared more about P4Q, including their handbook, several weeks ago. During our visit to Panelfisa, I learned they had also just created a handbook to document their unique way of working — and we received one straight from the source. Let me share with you what is in it.

Panelfisa's handbook consists of 4 main parts:

  • Introduction
  • History
  • Evolutionary Purpose
  • Self-Managed Organization

1. Introduction & 2. History

The first chapter describes some general characteristics about the company, while the second chapter provides a brief overview about the company's history.

There is no need to repeat those here, as we've already written about them a while back. We even made a short animation about them, which you can watch below:

However, I do think that the other two elements are more interesting to dig out in this post, so let's go over those.

3. Evolutionary Purpose

The third chapter covers the purpose of the organization. It describes that their purpose takes into account both what they want to achieve as Panelfisa and the why they want to achieve exactly this.

As such, the handbook describes Panelfisa as a shared project with a purpose that is defined as:

"In the automotive sector, when you're big, nothing is too small. We are Panelfisa with a mindset: be better than you were yesterday. A caring project with quality jobs."

The handbook then introduces two other concepts:

  • Strategic Thoughts
  • Plan of Ideas and Objectives

Strategic Thoughts

The handbook describes their strategic thoughts that guide what they are planning to do to make their purpose a reality and how they want to achieve this.

The what is defined as:

"Our product and market strategy takes into account the people, resources, and investments needed to be efficient and sustainable. We are always focused on our customers and our efficiency, with the aim to offer the best service, quality, and cost."

The how is defined as:

"How we want to achieve results is very important for Panelfisa. We organize our organization around people through our NER values and self-management, and we are committed to the society we are part of."

This is not included in the handbook, but the NER values are defined as followed:

"Trust, communication, solidarity, transparency, ethics, no dismissals for economic reasons, shared decision making, profit sharing, and commitment to society."

The last part of the NER values, commitment to society, deserves more attention, as it is an important part of Panelfisa. It is defined as:

"We want to contribute to a human, fair, and sustainable development of society. That's why, together with the other organizations in the NER Group, we assign part of our resources (profits, technology, experience, and personal time) to promoting, communicating, and developing social programs in the fields of childhood, the elderly, persons with disabilities, exclusion, immigration, education, health, and the environment."

Plan of Ideas and Objectives

At the end of this chapter, the handbook describes their annual practice called Plan of Ideas and Objectives, or simply IH (in Basque), as follows:

"Every year, we prepare a Plan of Ideas and Objectives (IH), which aligns with the purpose and strategic thoughts.

In the IH, each team defines their own improvement ideas that they will develop, and the goals they plan to achieve that year.

In addition, in the IH, we define temporary improvement plans that need the participation of multiple different teams.

In this way, we agree upon, and are able to track, the goals we want to obtain annually as Panelfisa."

4. Self-Managed Organization

The fourth and last part of the handbook is the main part. It covers the self-managed nature of the company. This section starts with an explanation of the company from an organizational design perspective. It describes how the company should be seen as a network of interdependent autonomous teams that self-organize.

The handbook shows that all these teams can be divided in three different domains:

  • The process domain
  • The coordination domain
  • The social domain

Process Domain

There are 14 autonomous teams that belong to the process domain. This includes teams with names of better known processes like 'Design', 'Quality', 'Maintenance', and 'Logistics'.

But the list also includes teams with rather technical names such as 'ND Presses', 'TX Presses', 'Threading Machines', and 'RPS-Assembly'.

These are all teams responsible for all the processes the company needs to deliver its products and services — and are all fixed teams.

Coordination Domain

There are two kind of teams listed in the coordination domain: customer-oriented teams, and the steering team.

The customer-orientated teams are again then divided in three teams:

  • Sample team: this autonomous team launches and develops innovations (related to customers).

  • Commitment team: this autonomous team takes care that Panelfisa honors its commitments to customers.

  • Ad-hoc improvement teams: these autonomous teams are created for specific projects and goals.

The steering team (or pilot team) consists of one representative of all the autonomous teams in Panelfisa. They represent all the teams, provide solutions, make major decisions, and guide the company towards its strategic goals.

Social Domain

There are also two different teams listed in the social domain: social team, and the society team.

The social team consists of representatives of different autonomous teams and the cooperation's ownership. This team takes care of all the decision-making related to social matters.

Furthermore, it is outlined that this team must always take people, the cooperative, and the purpose of Panelfisa into account when they make decisions.

The society team consists of representatives of different autonomous teams and represents Panelfisa in the larger NER Group, of which they are part of.

This team is responsible for "generating, promoting, coordinating, stimulating, and encouraging employees to participate in solidarity projects and initiatives that are benefiting society."

article photo

After the handbook describes all the different teams (and their roles and responsibilities), it then explains that the proper functioning of Panelfisa as a self-managed organization is built on three pillars:

  • Mutual trust
  • Shared decision making
  • Leadership with its own style

4.1 Trust

The handbook first starts with the topic of trust:

"Self-management can only develop if there is enough trust between people, teams, and leaders. We believe that we are all responsible people that are motivated to do a good job and can be trusted to do the right things."

It then says that Panelfisa took the first step by removing the time clock, and instead now trusts its people to act in a responsible manner.

They continue with listing four values and processes that must contribute to build trust:

  • Freedom & Responsibility,
  • Information, Transparency & Communication,
  • Mature Relationships
  • Conflict Resolution as an Opportunity

Freedom & Responsibility

"Freedom & Responsibility are two faces of the same coin. Trust between people and teams will depend on how we manage our freedom to organize ourselves and the responsibility with which we do that.

All of us take into account our personal interests and that of Panelfisa (purpose, client, efficiency) to act responsibly.

As such, compliance with agreements made is essential. For this reason, we take initiative, and then make and follow up on agreements with shared responsibility."

Information, Transparency & Communication

"We share important information in the different coordination teams and during general assemblies.

All information is accessible and available to all people in the organization, although in certain cases (clients, employees), it will be subject to data protection laws and confidentiality agreements.

We report daily on our main performance parameters: weekly during commitment meetings and monthly through the steering team, social team, and information assemblies.

Digital panels and screens allow us to communicate in a continuous way."

Mature Relationships

"As there is no hierarchy, coordination between teams and people occurs through mutual adjustment.

The mutual adjustment between people and teams will depend on:

  • The quality of our conversations.
  • The ability to let ourselves be influenced.
  • The ability to make proposals, and reach agreements that are being fulfilled.
  • The consistency with the ner values, the purpose, and the strategic objectives of Panelfisa in our agreements and decisions.
  • The level of trust between teams and leaders.
  • The acceptance of the diversity of people and the right to make mistakes.
  • Personal attitude: trusting yourself is the gateway to being able to trust others and reduce our need to control.
  • Being able to avoid or reduce toxic behavior: personal attacks, continuous complaining, killer phrases, triangulations (creating two-against-one situations), and uncompromising, defensive, or ironic attitudes."

Conflict Resolution as an Opportunity

"Conflicts show us symptoms or situations that we must treat as an opportunity to improve, learn and evolve.

Conflicts are inevitable, and the origin can be found in repeated patterns of behavior, the diversity of personal characters, the breach of agreements, the lack of shared goals, and in the level of co-responsibility when faced with client demands, etc.

When we have a conflict, the process of addressing it consists of the following steps:

We manage conflicts in teams individually or collectively with leaders (representatives), including the leader of the social team. When the conflict is between different teams, we manage the conflict between the leaders of the affected teams.

  • The leader identifies the conflict, and can request support from Panelfisa's internal facilitator.
  • We bring the conflict to the table, although it might bring some uncomfortable feelings.
  • We discuss the conflict with decency and respect. We listen to others and try to understand them.
  • When seeking an agreement, we take into account personal interests, the client, and the purpose of Panelfisa.
  • We define what each party can contribute to the solution, and then reach an agreement.

If there is no agreement found, the conflict will be discussed with the social team and Panelfisa's general coordinator. Together, they will assess the degree of seriousness of the conflict and try to find the best solution."

4.2 Decision-Making

"When we make decisions, we take the interests of all parties into account: people, teams, ownership, purpose, and the strategic thoughts. Therefore, we have:

Different areas for decision-making, depending on the type of decisions and the parties that will be affected by the decision.

An agreed decision-making process that should serve as a reference for each team."

Decision-Making Areas

"We defined four decision-making areas depending on the type of decisions, and for each area, we indicated the teams with the authority to make decisions in that area.

1. Strategic Decisions: These are decisions related to the general goals of Panelfisa in the medium and long term, as embodied in our purpose and in the strategic thoughts.

  • General assembly: Decisions related to the purpose and strategic thoughts.
  • Steering team: Decisions related to the annual IH, investments, budgeting policies, strategic decisions regarding the client, product, processes, and the potential recruitment of new people.
  • Autonomous teams: Decisions related to selecting and recruiting people into the team.

2. Organizational Decisions: These are decisions related to how we organize ourselves and evolve as a self-managed organization focused on the client and efficiency.

  • Steering team: Decisions related to changes that affect multiple teams or the entire organization.
  • Autonomous teams: Decisions related to changes that affect the internal organization of the team.

3. Operational Decisions: These are decisions related to the day-to-day operations of each person and each team. If a decision has a significant economic impact, or is related to the strategy, then advice must be sought from key functions of the organization.

  • An autonomous team: Decisions that affect the usual operations of the team.
  • By delegation to coordinations teams: Commitment team, sample team, ad-hoc improvement teams, meetings between representatives, steering team, and social team.
  • A person: Leaders of people with a certain degree of autonomy due to their relationship with other teams, clients, suppliers, banks, institutions, and those whose judgment is trusted by the team or the organization. Experts, or any team member, who due to urgent matters, makes operational decisions when faced with specific demands.

4. Social or Governance Decisions: These are decisions related to social issues that affect people and the cooperative system.

  • General assembly: Approval of financial documents, distribution of profit, salary levels, the election of the governing council, and decisions related to the cooperative's bylaws.
  • Governing council: Proposes decisions to be made during general assemblies and decisions related to hiring the general coordinator, admission of partners, and the cooperative's bylaws.
  • Social team: Decisions related to the annual calendar, conflict resolution, working conditions, and social issues."

Decision-Making Process

"Decisions made during the general assemblies are made by majority vote. Decisions made by and between teams are made by consent.

In a decision-making process, everyone must be flexible in their personal opinions to be able to contribute to a common and shared opinion. Thereby, we must overcome the 'fear of making mistakes.'

Taking our purpose and strategic thoughts into account during our decision-making is vital. Likewise, in team decisions, the team leader is just one member of the team."

Advice Process

"Being an interdependent organization, we ask for advice to improve our decisions. Teams are open to questioning or modifying decisions as long as they consider the advice of affected parties and people with expertise.

  • A proposal is made, and the teams affected by it are identified. The affected teams, and people with subject-matter expertise, are asked for their advice on the proposal.
  • The team, or person, allow themselves to be influenced and try to look for another point of view on the proposal to improve the decision.
  • Taking the advice into account, the proposal is updated so it can be made by consent.
  • The individuals, or teams, whose advice was sought are informed about the decisions."

Consent Decision-Making

"The principle of consent says that a decision can be made as long as no one has a reasoned and substantial objection. Consent does not mean that we all agree with a decision, but that at least we all 'can live with it.' That is, the decision is good enough for now or safe enough to try.

The goal is to reach agreements with nobody objecting. In practice, it means that the decision is blocked if a person shows a clear objection or is against a proposal. When this happens, those who make the proposal and those who disagree must seek a solution to the situation by modifying or improving the proposal.

Objections must be reasoned because we will not consider the "no’s" without reasons.

There are operational decisions that are made more informally. Team decisions must be recorded in meeting minutes or in agreement notes. For more critical decisions, you can use the document, "Propose a Decision.”

Consent Decision-Making Steps

  • Prepare the proposal: Indicate under what criteria it is proposed and what the economic impact is.
  • Request advice from affected parties: The team must let themselves be influenced to the extent that the decision affects the client or other teams. Advice is sought from the affected teams and people with expertise. The more important the question is, the broader the consultation must be. After the advice is received, the proposal can be revised and improved.
  • Present the proposal to the team: One person presents a tension, problem, or question and presents a proposal to solve it. This person might request a reflection from the team on the proposal to help improve it without further discussion.
  • Clarifying questions: Anyone can ask a clarifying question to receive more information or better understand the proposal.
  • Reaction time: Each person can react to the proposal in the form of a comment without starting a debate.
  • Modification and clarification: The person making the proposal can further clarify or modify the proposal based on the team's reactions.
  • Consent round: A round is made in which all people can indicate if they are in favor of the proposal. This means if 'they can live with it' or if they object to it. Objections and reasons for objection must be gathered and presented.
  • If there are objections: A debate is opened to try to integrate the objections and modify the proposal accordingly to end up with a new version of the proposal. If the objections remain, the decision is blocked, and a new proposal must be made to be able to reach the 'consent round' again.
  • If there are no objections: The proposal is approved, and the decision will be made. It will then be agreed upon whether the decision requires follow-up steps and if communication to the affected parties is needed."

4.3 Leadership

The leadership section has two headings: meaningful agreements, and mutual commitments.

Meaningful Agreements

"Leaders take care of internal participation of team members, ensure an information flow to and from coordination teams, set an example, and act accordingly to our purpose, strategic thoughts, and NER's values.

Through transparent and honest conversations with their team, leaders promote agreements with the goal of strengthening their teams. The evolution toward a strong team can be specified in the following aspects:

  • The level of autonomy of the leader.
  • The level of autonomy of the team members.
  • The decisions made by the team.
  • Consent decision-making where the leader is one of the team.
  • The tasks to be done by the leader include at least: contributing to the annual IH and monitoring the progress, making proposals for improvement and investments, taking care of internal reorganizations, training and selection of new team members, meetings with own team and other teams, and other operational tasks."

Mutual Commitments

"The boss-subordinate relationship is replaced by mutual commitments. There is a clear understanding of the concept 'Give, Ask, and Receive' among all the people and teams of Panelfisa. This is specified in the following behaviors:

  • Clarity about information and accountability.
  • The capacity of people to point out and manage non-compliance through respectful confrontation.
  • Focus on solutions instead of blaming.
  • The right to make mistakes, to learn, and to evolve.
  • Confidence of the leader in their team and the team in their leader.
  • Co-responsibility."

The end

Alright! That concludes all that is in their handbook (for now). Yeah, I know, this was pretty extensive. Still, it provides a good image of how extensive a handbook can (and maybe should) be.

I hope it provided enough inspiration to kick off your own initiative to create your own handbook.

Ready?

Are you ready to create one? Then take a look at our Academy and explore what you can learn from pioneers such as Panelfisa to make your organization more progressive.

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