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“It’s beautiful”: Mutual management at Morning Star

10 Feb 2015 - Blog, Case Studies

“It’s beautiful”: Mutual management at Morning Star

Morning Star, the world’s largest tomato processor, has 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.

Personal Commercial Missions

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. 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

Accountability takes 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.

Original article by Leigh Buchanan at:

http://www.inc.com/audacious-companies/leigh-buchanan/morning-star.html

 

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