What if you would organize your company without any management? Without any rules? Would that work? A company, where you decide on your own salary together with your team? Utopia? It is not. At our company – Finext – in the Netherlands, we make it work for already 20 years. At the beginning of 2016, the company has about 150 employees. And about 100 owners.
Finext, a Dutch company based in Voorburg, The Netherlands, provides consultancy services in Holland and it uses the organizational principles of Brazilian management guru Ricardo Semler. Successfully. Finext used to be a part of The Vision Web; an IT company taken over by Ordina in 2004. As off that date, Finext was an independent subsidiary of Ordina. In 2011, 90 colleagues bought the company; probably the world’s first PBO (Professional Buy-Out).
Ricardo Semler, before becoming famous for his ideas on management, took over his father’s company. He says that early in his career, he was mainly concerned with the ‘why’ question. Why are my employees able to read their email on Sundays, but unable to go see a movie on Mondays? Why do we have these horrendous everlasting meetings? Why do employees take their work home, but they don’t take their children to work?
At Finext, everything is questioned. And everything is democratic. The financial consultants that work at Finext have found their own way in using the principles of Ricardo Semler. Each team at Finext has a team ‘captain’. But this role is not a privilege, it’s just part of the work that needs to be done. And next year, another team member might be the team captain.
Values, instead of rules
From the start of Finext about 20 years ago, we have governed ourselves based on principles. No managers; because professionals are perfectly capable of running their own business. No staff departments; each team does their own HR, marketing & sales and monthly financial overview. We don’t want to end up in a situation where ‘somebody from HR’ decides who is going to be our next new colleague. Neither do we want to be evaluated by somebody who doesn’t actually work with us. So we evaluate ourselves. Talents above structures: the talents of professionals can never be less important than the structure of the company. So if professionals want to switch to another team, or want to leave; no problem! Responsibility and freedom are very important; so everybody has the key to our office building. And of course, we breathe transparency. Why keep information on salaries, team sales turnover, costs, etc. hidden from other teams? Aren’t we all here for the same goal and purpose?
No job titles
This is not exactly a common working practice yet, so how do we like it? We have seen traditional organizations, but we are working for Finext for more than 8 years now and very happy about it. There is no job title on our business cards, neither is there on the business card of any of our colleagues. The most important values of the organization are trust, responsibility, freedom and transparency. No rules, but values, which means that we talk about what they mean in any given situation.
The Semler method has not been detrimental to us. In 1999, our organization started with 10 people and, at this moment, about 150 people work at Finext. They continued to grow during the economic crisis of the past years. Other companies tighten the rules; we try to remain flexible by eliminating them. Especially in times like these.
Organic
There are no staff departments and all teams are completely responsible for their own business. They find their own customers and hire their own colleagues, and thus grow organically. Our company’s office in Voorburg, The Netherlands, is a beautiful building with a coffee machine in the middle. That’s the place where colleagues meet and create new products, new ideas. And no manager is telling them that it’s a bad idea. We believe that the more you exercise control, the more people will resist. So don’t do it. Give your employees trust, and let them have the possibility to do something good. Then, they will.
Problems
Now, a big question of course: what happens in case of problems? The key criterion for solving any issue is quite easy; interact and connect. Share your values, talk about them, provide feedback, be transparent, and continue. And another implementation must-do: buy a coffee machine, and place it in the middle of your office.
Naturally, we are bound by Dutch law. It always puts a smile on our faces, that time of the year when the accountants arrive. They find our company weird and funny. And although the Chamber of Commerce has a few Finext ‘directors’ listed on paper, it’s not important inside our office, there are no privileges or special arrangements for them. Inside our building, they are part of a team just as any other colleague.
Lessons
And of course, we still learn. What works, and what doesn’t. Recently we have been researched by a PhD student, who looked at our level of self-organization. Yes, we can still improve. But at the same time, we are happy that more and more similar companies become well-known examples of management innovation: Semco from Brazil, Valve from the USA, Buurtzorg from Holland, and the list is growing.
Results
Somehow, the majority of the world still believes that management is essential for getting results. They continue to search for the ultimate ‘truth’. But the assumption made by Frederick Taylor that an extra layer of management would increase productivity, has been falsified. On the contrary; research has shown that there is an inverse relationship between productivity and the number of managers. This also goes for the number of innovations and the number of managers in organizations.
But what is worse than all that, is the fact that the attention for productivity has diverted the attention from what it’s really about: genuine products and customers. That is where we should care about. And that is what we try to achieve at Finext. We don’t use this model just because it’s fun. Self-organization is a means to an end. It’s not our objective to use this model. Our objective is to be flexible and provide our clients with the best we have to offer.
Would you like some old-fashioned proof? Metrics such as employee satisfaction, illness-related absence and Net Promotor Score are significantly better at Finext, compared to other organizations. Furthermore, according to us, our customers acknowledge the fact that we as a company are a little different and find it something positive, often not knowing the background of it. During the years of economic crisis, Finext has managed to stay on top of things and remained profitable every year. Another indication that this flexible model provides a solution for the world in 2016.
Frank is one of the 90 consultants that took over Finext from Ordina in 2011. He is a social innovator, portfolio management consultant and trainer of Management of Portfolios™ at Finext. Frank specializes in Value-based Project Management. One of the foundations of this scientifically proven method is self-organization. Recently, Frank helped organizations such as RWE Essent, T-Mobile and Royal Flora Holland in the area of project portfolio management and portfolio control.
Jan is one of the 90 consultants that took over Finext from Ordina in 2011. Jan is a project management consultant and trainer, providing training such as value-based project management, PRINCE2®, P3O® and Agile/Scrum. He is also project management lecturer at Windesheim University in Zwolle, the Netherlands. His background experience includes project management, PMO and portfolio management at large companies such as KPN and Philips in the Netherlands. Jan uses the ideas of self-organization at Finext to improve project teams and their way of working.