Today, work in the rank-based organization is frequently packaged as individual eight-hour-a-day, forty-
The organization should be seen as a portfolio of goods and services, not as an assortment of jobs organized functionally and separated divisionally. Career success should be measured by results, not by one's ascendance on the ladder of rank-based positions. Management should be seen not as a permanent rank-based leadership position, but as a competency developed and practiced by each member of the organization. And managers should fulfill their role as promoter of cross-fertilization of ideas and best practices between councils and project task forces, not as
When an organization
To foster a sense of equal standing and
To allow everyone in the organization to contribute to strategic thinking and decision making
To ensure that everyone in the organization begins to think like an owner
To provide everyone in the organization knowledge-based skills that do not become obsolete
In striving to achieve these goals, peer councils become multiple centers of decision-making authority and responsibility. By distributing power and responsibility throughout the organization, they tap into the whole intelligence and talent latent within the workforce, giving the organization
Big Chief or hierarchical decision making might seem to be more expedient and efficient, and in some cases, might be. However, time saved by these types of decision making is often lost to correcting the inevitable mistakes that arise from the narrow range of vision of a single, rank-based decision maker. This is
Companies can be structured in innumerable ways. For example, a company can be organized into different business groups, which represent customers' needs and wants divided either by industry, geographic region, or some mixture of both. The business groups can be further divided into business units, which represent the portfolio of products and services of the company delivered to each strategically focused customer
Within this structure, conventional, hierarchical reporting lines could be drawn as
Individuals report to project task forces.
Project task forces report to a product line.
Product lines report to a business unit.
Business units report to a business group.
Business groups report to management.
Yet in the peer-based organization, the management of these reporting lines is not rank based, for each area is supervised not by a single rank-based leadership position, but by a peer council. This format allows for the stability of the familiar organizational structure and reporting lines, but adds the
In a peer-based organization, peer councils can be chartered to over-see all aspects of the organization. Following are a few of the many types of peer councils that could be chartered:
The company peer council
could oversee the company's strategic vision, values, and
The business group peer council could set the company's business objectives and make strategic market and product decisions by being attuned to the needs and desires of each group's customers. It would analyze future trends in business and key markets and design work structures and reporting lines at the business group level.
The business unit peer council
could oversee the geographic or industry sector focus for the entire portfolio of the company's products and services. It could make the necessary resource
The product line peer council
could make product line decisions, and oversee all product and process councils, within each business group. It could design work structures and reporting lines at the product line level. It could partner with major industry players by including them on their councils and task forces. It might oversee a specific product line or service and the
The employee skills council
could oversee individuals' portfolio of skills and competencies and ensure that all individuals within their function are meaningfully engaged on appropriate project
Each council is responsible for ensuring the execution and accountability at its own level. Councils must practice patience, as opposed to surrendering to the quick-fix
Here are a few other thoughts to keep in mind in determining council membership:
Councils should be organized across levels, functions, and rank.
Some council memberships should be voluntary, while others should be
Each council has the authority to charter cross-functional teams for specific projects at its level. There are no "
In the transition to becoming a peer-based organization, the single decision maker is
Chartering councils but failing to make them peer based, or not involving people from every level and function of the organization, is a big mistake. The first attempt I made at introducing councils was with a well-intentioned CEO of a company that was not performing as well as it might have. We chartered the councils in the critical decision-making areas of the company, but against my wishes no one below management level was allowed to participate on a council. The rank-based chain of command was left in place within the councils, so the organization
As I went around explaining the council model to different groups in the organization, they all were excited to have a part in the decision-making process. The idea of contributing to the organization's strategic vision and tactical execution was very motivating for them. This was a company of very bright employees, and most of their knowledge and most of their
The employees at every level of the company had good reasons to explain the company's relative lack of success, but their thinking was never solicited. They saw the councils as a possible way to finally make some impact on the success of their company, and so did I. But there was too much resistance from the senior executives, who did not want to give up power and privilege. The well-intentioned CEO was forced to compromise his vision and make the councils rank based. The Big Chiefs still monopolized all decision making and neglected the councils, which were only their traditional rank-based staff in any case, or used them as mere privileged "gofers." This in reality was the same rank-based model as before but with a different
The economic situation with this company did not improve. Although the rank-and-file employees would have made a tremendous difference, the rank-based leaders