Are Managers Even Necessary?

Do knowledge workers need to be “managed?” Many will tell you no. This view says that if workers are smart enough to be “knowledge workers,” then they are smart enough to organize themselves. This thinking is also consistent with the view of networks as living organisms capable of self-organization.

There are a few interesting examples of a “leaderless” approach to management. One is the Orpheus Chamber Orchestra, which has no conductor and fills all other leadership roles on a rotating basis. Another example was Ternary Software, a small development shop that was run democratically from 2001 to 2006 through consensus (one of the founders has since left the company to productize and evangelize this management approach). Read more

Smart Companies Avoiding Lay-offs

There is an article in this morning’s New York Times that reports on a new trend in this recession: companies avoiding lay-offs by cutting back hours and benefits to their employees. This is happening across the economy, not just in traditional manufacturing. The Times reports:

A growing number of employers, hoping to avoid or limit layoffs, are introducing four-day workweeks, unpaid vacations and voluntary or enforced furloughs, along with wage freezes, pension cuts and flexible work schedules. These employers are still cutting labor costs, but hanging onto the labor…The rolls of companies nipping at labor costs with measures less drastic than wholesale layoffs include Dell (extended unpaid holiday), Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada casinos (four-day workweek), Honda (voluntary unpaid vacation time) and The Seattle Times (plans to save $1 million with a week of unpaid furlough for 500 workers). There are also many midsize and small companies trying such tactics.

This is a very smart strategy in the knowledge economy where your intellectual capital is your “factory” and where firing a productive worker is akin to selling off your production lines piece by piece. Companies with a strong labor force can use their employees smarts to cut other costs (see my thoughts on this here) and will be much better prepared when the recession ends.