Hierarchy, control and self-management: the Buurtzorg example
A common misconception about organisations that successfully apply self-management principles is that they have neither a power hierarchy nor central control processes. It’s an understandable error, but a fundamental one.
Take Buurtzorg Nederland, among the best known such companies, having grown from a single neighbourhood care team 20 years ago into a €400 million turnover group today, with some 15,000 employees.
Over years of collaboration with Buurtzorg and several visits with its neighbourhood teams all over the Netherlands, I met many of their people and became close to a few. None (including the boss) had any doubt about who was the boss.
But they knew also that founder and CEO Jos de Blok wouldn’t challenge their professional autonomy unless he had a high level of concern about a serious risk to the standards underpinning Buurtzorg’s success. A boss need not be bossy.
Buurtzorg’s standards are expressed in a framework of ground rules about care quality, teamwork and productivity within which the company’s professionals are trusted to manage themselves in accordance with their training, craft and vocational ethics.
Some of those rules are quite general but others are linked to specific performance indicators, such as the percentage of team time spent directly on client-facing (and, therefore, revenue-generating) work.
When I was last collaborating with Buurtzorg that percentage was 62 per cent, being the team average needed to generate enough aggregate revenue to meet the company’s costs and provide a modest surplus for reinvestment.
As the original Buurtzorg company alone has grown to some 900 self-managing teams, as well as spawning a number of sibling enterprises, how could the CEO be aware of any transgression that might warrant his intervention?
Part of the answer is a home-grown IT system with a dashboard that makes it easy to spot, for example, if a team is persistently falling short of that productivity indicator.
Another is that Buurtzorg has 20 or so regional coaches, each responsible for monitoring and supporting the work of around 45 teams. Like the CEO, by whom they are appointed and to whom they are accountable, they have digital access to detailed performance data.
Although they take a hands-off approach in the main (and being responsible for so many teams ensures that), their role is not only to respond to requests for help but also to notice any ongoing underperformance and to work with the team concerned to deal with it.
Teams have to cooperate with their coach, and, while committed to supporting them to find their own solutions, the CEO, perhaps on a coach’s advice, can in the last resort override their autonomy, even to the extent of disbanding a team.
While that is a highly exceptional outcome, its possibility obviously affects Buurtzorg’s culture. Far from undermining the self-management of its teams, however, Buurtzorg’s central control processes and unequal power distribution underpin it.
That is why it is misleading to say, as some do, that Buurtzorg has no hierarchy and has replaced control with trust. In reality, control is synergised with trust through the ways in which different levels of authority and responsibility are exercised and interact.
None of this means that emulating Buurtzorg’s success requires duplication of its accountability arrangements, or for that matter any of its ways, even if that were either possible or necessarily desirable in all respects.
It does illustrate, however, that to successfully enable and support professional autonomy and responsibility an organisation requires shared understanding of who has authority for what, as well as simple standardised administration to sustain overall coherence and stability.