The Liberated Company

COVID-19 brought about a lot of change to people’s lives and how businesses operated. Working from home was a mandate across the US and many other countries. Working from home was uncharted territory for many and companies expected to see a decrease in productivity, but instead many saw an increase. This has sparked discussions about other ways to get the job done and the exploration of changing operating models to support a more flexible approach to increase employee satisfaction, retention and attracting new talent. One of these ways is the Liberated company.

A liberated company is built on a set of basic principles and of consensus. It is about working as a team, all of the employees within a company are important and have a part in the creation of value. This structure aligns with Maslow’s hierarchy of need. In addition to feeling valued and a sense of belonging, people want to enjoy their work, so all that needs to be done is give employees an environment that allows them to do just that. It is about creating a virtuous circle of autonomy through responsibility.

The liberated approach isn’t revolutionary. It is simply part of a transformation trend that began several years ago with the goal of creating more agility, autonomy and shared leadership within corporations. This model is based on a theory put forward in the 1960s by McGregor: Theory Y (“have confidence in people”) which was popularized by the book Freedom, Inc. by Brian M. Carney and Isaac Getz.

For this model to work, companies have to believe and commit to two things:

1. People are trustworthy, so they must be put at the heart of the business
2. People long for freedom, even within their work

Unlike more traditional operating models, employees in liberated companies are free to choose what actions to take in the best interests of the company. For example, they are not directed by management or locked into following processes. The result is two-fold: they are fully committed to delivering the business’s strategic vision and enjoy enough autonomy to innovate and structure their time in a way that works best for them. As a result, the company becomes more agile and efficient.

First you need a Liberating Leader to spearhead the effort and be the change agent. This leader must have a strong and compelling vision of the business that aligns to a value system and brings together the entire company. Communication skills, particularly listening skills (listening to understand, not to respond) are critical to make it possible for the employees to speak. For example, the head of one organization turned the company over to the employees for a year to open up the space for people to take the initiative. For them “the Liberating Leader” tries to make themselves dispensable in an effort to build confidence and enable self-realization and self-direction. This method may not work for your organization, but it’s interesting to consider.

Next you need adjust the management layer:

• Removing the traditional management structure is a key component. It involves the obliteration of bureaucracy, the transformation of roles and sunsetting of existing governance models.
• Re-evaluating the need and scope of the management layer has an immediate impact on the organization. First, it will help its agility, the fluidity of communication and decision making. An impact can also be seen on the wellbeing of employees and on the economic model: agility translates into time and cost savings.
• Reinventing the role of the manager, it is a greenfield (it’s time to think outside the box). Generally, it consists of supporting individuals and their teams while they make decisions. The role may be more traffic control, making sure there is coordination across the company or more long-term strategy building. 

Human Resources and Talent Acquisition will also need to be reimagined. Hiring for culture is a priority, as all employees need to embrace being self-managed and working in a consensus driven environment.

• Empowered to make decisions is realized and employees are able to reach their full potential and become self-managed. Remember the key concepts are trustworthy and freedom.
• Accountability for the outcomes of their work is given to the employees, including letting them self-organize. They have to prioritize the objective over the means of achieving it. Being agile makes it possible for employees to take control of work products and creates space for them to find their own solutions.
• Creativity is often born from this freedom and more/greater innovative ideas and products are produced. 
• Employees embrace freedom and responsibility of action because their psychological needs are met (respect, trust, self-realization, and self-direction).
• Attract and retain the employees as Liberated companies are attractive to candidates looking for work and have shown to have minimal absenteeism and turnover.
• Training is driven by employees rather than enforced by HR (though this doesn’t preclude HR managers from offering opportunities).
• Promotion is guided by individuals’ interests (an engagement is chosen not assigned), so everyone has an equal opportunity to tackle challenging work.

As with every model, there are challenges. Here are a few worth considering. 

• Teams may get stuck when dealing with a complex problem they haven’t experienced before without a manager to help drive to a solution.
• Employees may take on too much work to show they are ready for promotion, which can result in burnout.
• The concept of the liberated company can hide what is actually cost cutting (especially in the reduction of support functions). It implies an increase in the capabilities of the employees without any real premium or financial advantage. The only compensation is the feeling of empowerment.

As appealing as this new model is, companies don’t need to make the transition to a liberated model to show employees they are respected, have confidence in them, and to seek to improve the quality of their working environment through responsible management. 

Interested in learning more? Please contact marci.marra@sia-partners.com.