One Company's Audacious Org Chart: 400 Leaders, 0 Bosses
BY Leigh Buchanan
At Morning Star, the world's largest tomato processor, employees make all the decisions--from how they'll do their job to what resources they need to do it.
Headquarters: Woodland, CA
Year Founded: 1970
Revenues: $700 million
Morning Star, the world's largest tomato processor, is flatter than a pancake leveled by a steamroller. There are no managers. No directives from above. No promotions. No titles.
Instead, there is the philosophy promulgated by Morning Star's founder (don't dare call him CEO), Chris Rufer. More than 40 years ago, Rufer launched a trucking company to haul tomatoes to canneries. The work did not lend itself to the management theories he had learned as an M.B.A. student at UCLA. "How do you manage truck drivers, anyway?" Rufer muses. "Put a supervisor in every truck? It was just, I do my thing; everyone else do your thing. That seemed to work."
What worked then for a one-truck business works today for a company that swells to more than 2,400 employees in tomato season. "Quite good, high-performing people love it here, and they flourish," says Rufer. "That is our competitive advantage."
"It's a beautiful way of structuring a workplace. Management is not nearly as necessary as it thinks it is." --Ben Cohen
Morning Star calls what it practices self-management. But it is also mutual management. Employees' decisions about what they will do are determined largely by their commitments to others. You know what you need from me to do your best possible work, and I know what I need from you to do mine.
Those commitments are embedded in peer-to-peer contracts known as colleague letters of understanding, or CLOUs. The keystone of each CLOU is a "personal commercial mission," crafted by each employee to describe her contribution to Morning Star's success. (Rufer's PCM is "to advance tomato technology to be the best in the world and operate these factories so they are pristine.") The terms of how everyone will work with everyone else are negotiated by the people doing the work.
When he first learned of Morning Star's bossless model, "I thought it sounded pretty cool," says Brian Hagle, whose job involves evaporating water from tomato juice. Twenty-two years later, he still feels that way. "It's almost like every one of us is manager or CEO," says Hagle. "We set our goals high, and they're our goals, so when we meet them, there's a real feeling of achievement."
Autonomy extends beyond deliverables. Need equipment to do your job? Buy it. See a process that would benefit from different skills? Hire someone. Colleagues consult one another and then simply act.
The ballast to autonomy is accountability, which can take many forms. Perhaps most important, employees want to perform because reputation is the coin of the realm. In a company with no promotions, people earn more by getting better at their jobs. Employee-elected compensation committees set pay levels after measuring colleagues' performance against their CLOUs and other metrics. Morning Star can pay 15 percent more in salaries and 35 percent more in benefits than the industry average because it's not paying managers and productivity is so high.
"We take our cues from the world," says Paul Green Jr., a colleague at the Self-Management Institute, a research division within Morning Star. "In society, you have individuals essentially pursuing their own deals but figuring how to come together in a relatively organized way. It's beautiful."
LEIGH BUCHANAN is an editor at large for Inc. magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture. @LeighEBuchanan