2/6: Rewrite the rules of management. Let your values and principles lead.

This is the second article on a series of posts on management of post-hierarchical organizations. Rather than debating whether or not we need managers in the future, the aim is to look into five elements of organizations and how through them we can rethink management to support e.g. innovation, adaptability, and employee engagement. Managers may or may not be included.

When talking about the future of work, management, and organizations, the question to focus on shouldn't be "do we need managers". Rather, the question "what are the elements to manage an organization" will yield more actionable insights to experiment with alternative forms of management. Any organization from the most hierarchical to the most self-managed one can be understood through five elements. These include: authority, goals, rules, participation, and motivation. This post will focus on rules.

Why values hold potential for leading?

In every organization and social setting, we encounter rules. Here, rules refer to an umbrella term of all sorts of principles that guide our behavior, both as individuals and collectively in teams and organizations. Rules can be formal: you need to get your manager's approval on your business trip itinerary, to take personal time off in the middle of the day, or on the price you are going to give to your client in your proposal. However, oftentimes these rules narrow our mandate to operate and make decisions, and in turn, burden our managers as they have to make decisions for us.

Alternative form of rules are the informal ones: values, principles, and norms. Every organization has its distinctive set of values, principles, and norms, whether they are explicit or implicit. Corporate misbehavior (e.g. Volkswagen emission scandal) and their societal repercussions as well as the growing desire for individuals to do purposeful work for companies with larger-than-profit-purpose has led to a resurgence of interest toward corporate values. Values support organizations in fulfilling their mission and executing their strategy; they are the backbone of organizational culture and set the direction for its development; they outline the behaviors that are expected; and they guide everyday actions and decision-making.

The latter of the roles of values - guiding everyday actions and decision-making - is actually an important leadership role that values have. To put differently, strong and clear values are at the heart of leadership: of how we lead others, but also of how we lead ourselves. By defining values and articulating them in principles and behaviors, we could enable people better to lead themselves, manage their work and workflow, and to make decisions, according to strategy. By having values guide everyday actions and decision-making, managers would have more time for customers, time would be freed from office life to innovation and agility, and employees feel would more empowered and engaged.

How values and principles help individuals and teams to self-manage?

Values are the standard for behavior: in an organization, they tell what kind of behavior is important or valued. Values are the behavioral compass, whereas principles give a more detailed set of directions or guidelines. For example, Futurice, has care, trust, transparency, and continuous improvement as its core values and the 3x2 principle to support decision-making. Everyone at Futurice has the power to decide on basically anything and the 3x2 principle - in addition that you can of course seek for advice - helps you in making those decisions. The principle truly reflects the values of Futurice.

Values and principles helps individuals and teams to self-manage in the following ways - given that values and principles are truly lived and no exceptions are tolerated:

1. They give the mandate and autonomy to operate and to make decisions for the best of the individual, team, business, and its customers.
2. They are a mirror against which to reflect on actions taken and decisions made.
3. They are a lens through which to give feedback to others and to monitor progress.

Managers and leaders can act as coaches and advisers for the individuals and teams in decision-making but as management's time is not constrained by making decisions for their people, teams and organizations will become more agile and novel ideas are not turned down by management. Also, as those who do the work become the actual decision-makers of their and their team's work, their psychological investment is likely to increase, thus increasing engagement. Furthermore, as those in the customer-facing roles are empowered to make decisions on the spot, this can increase customer satisfactions.

How to create values and principles for self-management?

Here's how we work with our clients in creating values and principles:

1. Start by defining the style of values that would be authentic for your organization. It's of course the set of values and principles that matter the most, but as people do need to have them in writing, think of what would help your people best to remember the values and principles. There are a multitude of different ways to express and make values explicit: an acronym, situational examples, corresponding behaviors to the values, and so forth.
2. Define the values that are behind valued and important behavior now and in the future. By asking, e.g. how do we work, act, and behave and what is important for us, you can get to the core values of an organization whereas asking how should we work, act, and behave in the future could reveal additional aspirational values. As values should also tell, what makes your organization distinctive, reconsider incorporating permission-to-play type of values to your set of values, such as ethical, teamwork, authentic, fun, or customer-oriented.
3. Make the values explicit in the form of behaviors and principles. Values, if only expressed in a word or two, easily remain vague and prone to multiple, possibly conflicting interpretations. Tell what the values mean in terms of behaviors and craft more detailed principles e.g. for specific situations to provide the people to guidelines to act and make decisions - according to the style defined in step 1.
4. Simulate the values in action. By having value discussions, you can discuss the values in actions: how and what kind of a decisions would you make in such and such situation, what does this value mean for our interactions with customer, and so on. My absolute favorite in terms of simulating the values in action is to have a gamified approach on the value discussions that relies on collective decision-making to commonly agree upon the appropriate behaviors associated to values.

All in all, values and principles hold a tremendous, untapped leadership potential that can support organizations in e.g. agility and innovation by strengthening their self-management capability. Do you dare to rewrite the rules of management?