Treating employees like adults can have amazing results
At Nearsoft, no managers and complete freedom create responsibility, not anarchy
Leaders at Nearsoft believe that when you give people complete freedom, it makes them even more responsible, not less. It's counter-logical, but actually very intuitive.
Superman Need Not Apply
Nearsoft in San Jose, Calif., is a fast-growing software development company with nearly 200 developers in the U.S. and Mexico. Roberto Martinez and Matt Perez, the co-founders, aren't the kind of heroic activists who get featured on the front of business magazines by force of will, command and control, or by building an emotionally charged personality cult. They've figured out none of that is a good idea for building a great company in the emerging work world of the Participation Age.
Nearsoft promotes self-management and runs their company without any managers. Everyone decides for themselves what needs to be done. Roberto says, "Lack of control is the illusion people have. But when you give people true freedom to make decisions, become leaders, or solve problems, it makes them more responsible, not less. This is a very powerful statement. Everyone at Nearsoft is completely free to take care of the important things."
Nearsoft is an early adopter to the idea that the last 150 years of top-down management was a bad idea when it worked and an even worse idea in a technology-driven world where participation and sharing attract the best people.
In 2006, Nearsoft built their company around two simple but profound assumptions: everyone is an adult and should be treated that way, and everyone wants to be responsible, not just a very few who are "in charge" of others. Julio Gonzalez, head of operations says, "At Nearsoft, leaders encourage everyone to ask questions, not permission. Trust in their desire to be responsible adults is key to our success."
Managerless, And More Organized
Nearsoft has done a great job of grasping that the profound things are almost always simple. Nothing is complicated in the way they have built their company. But that lack of complexity is many times mistaken for lack of organization. Matt Perez emphasizes the point, "We have a governance structure. That fact that our company is very flat and democratic actually means we are MORE structured than the traditional management model. We have very clear processes for everything we do."
Ownership By Decision-Making
Clear roles and well-defined processes are consistent with self-managed companies in every industry. The difference is that instead of having roles, responsibilities, and processes foisted on them by top-down command and control structures, the staff themselves determine who will do what and how it will get done. Development of roles and processes by those who will have to carry them out, guarantees ownership of the result. Traditionally managed companies only hope for such "engagement".
Julio adds, "We even have people get together and form leadership teams to discuss any topic they want, and make decisions. Our entire profit-sharing structure was changed from the bottom up because people took initiative to meet and decide how to make it better. We simply facilitated the process."
Values Actually Mean Something
Nearsoft runs on five core values: leadership, commitment, teamwork, long-term relationships, and being smart and getting things done. And they have two corresponding principles: transparency and honesty. These are not filler for annual reports, but values that everyone at Nearsoft believes in. Most companies have similar lists, but Nearsoft makes all their decisions based on whether they are aligned with these five values. Very few companies like Nearsoft truly function on an everyday basis from a list of values.
When There is No Manager, Few People Leave
Consistent with all self-managed companies, Nearsoft has extremely low employee turnover. Matt says, "One guy left to be a manager at a traditional company and was miserable. He's back, because here, even though he isn't a manager (no one is), he has responsibility and authority. There he was just a spokesperson for upper management. Another woman came back because her employer made her get permission to pick up her mom from an appointment. Here everyone is an adult and doesn't need permission to take care of their families."
Work From Anywhere
Part of being an adult is deciding where to work. Sometimes working at home is best and other times coming in to the office to collaborate is more effective. Nobody manages that, the teams decide for themselves according to Nearsoft's working from home manifesto. Nearsoft adds to that trust in adult behavior by giving everyone the option to work from anywhere in the world for up to a month, twice a year.
Employee engagement is an ongoing buzzword problem with most companies. Nearsoft advances the idea of self-management as a key to solving that problem. And thousands of companies like them, in every industry, are moving quickly in this direction.
Give People Their Brains Back
Nearsoft's story is a powerful lesson for all companies. If you want to grow quickly, increase profits, reduce unproductive middle management layers, and keep your best and brightest people, you might want to give them their brains back and require that everyone become a self-managed adult at work.