Doug Kirkpatrick served as the first financial controller for Morning Star, now the world’s largest tomato processing company. Kirkpatrick was a member of the startup team that was introduced to the core principles of self-management, which they immediately adopted. At Morning Star, Doug learned that organizational self-management is real, it works, and it drives superior business performance. He is now sharing the benefits of self-management and how companies both big and small can implement this new way running a company today.
Lisa Williams: Today I’m with thought leader, sought-after speaker, and accomplished business consultant Doug Kirkpatrick. How are you today, Doug?
Doug Kirkpatrick: Super fantastic. But I’ll try to get better.
Lisa Williams: You’re a contributor to The Huffington Post, and you’re clearly a leading voice in changing how we do business. Let’s delve into this topic of self-management. I understand that you’re a pioneer of the self-management approach in the workplace, and you’ve spoken on the topic and implemented this way of doing business yourself. Is that correct?
Doug Kirkpatrick: That is correct. I fell into it, I suppose, as a result of working for a company that happened to be a self-managed enterprise as started by the founder of the company, and I was just fortunate to be there when we started. We experienced that and learned from it, and I’m now simply sharing that information with the rest of world.
Lisa Williams: What company was that, and what is self-management?
Doug Kirkpatrick: The company is called Morning Star; it’s a tomato processor. Many people have not heard of it because it doesn’t have a branded presence on the retail shelves but it’s currently the largest tomato processor in the world. We started the company in 1990, and I was the original financial controller. From our early start, we grew to become the largest tomato processor in the world. I believe everyone in North America has consumed our product, which goes into everything you can think of in the grocery store shelves, including ketchup and salsa. We export worldwide.
When we started the company, our founder, Chris Rufer, operated our core team with the opportunity to be a self-managed enterprise, which means that we would be completely absent from and devoid of command authority. No one would have any authority to direct the activities of others. Zero command authority. No one would have any unilateral authority to fire anyone else. Everything would be accomplished by request and response, and the company would rely on the flow of commitments between individuals. I define self-management as the absence of command authority or the ability to direct the activities of others, where each person is self-directed and his or her activities in support of the mission of the enterprise.
Lisa Williams: I read that the era of hierarchical management is coming to a close. What do you mean by that?
Doug Kirkpatrick: We think of hierarchical management as having been here forever and having to stay here forever, but it’s really an artifact of the industrial age in terms of our businesses and organizations. When we started in the industrial age with the railroads and the steel companies in the mid-1880s, we needed some hierarchy and bureaucracy because managing industrial enterprises with the primitive communication systems of the time was very difficult. It would have been impossible to have large self-managed organizations at a time when information literally moved at the speed of one character at a time via Morse code. Imagine trying to run a transcontinental railroad or a large steel company with a self-managed type of organization.
I don’t begrudge the management systems at the time because railroads needed a manager for every 100 miles of railroad track just to make sure trains didn’t collide with each other. That was that was what we started with in the industrial age. The problem is that we’re in a different world today. Information gushes through fiber optic cable everywhere at the speed of light. What we need today are people who are free to act on the information that they have at their disposal. The idea of top-down, rigid, brittle, bureaucratic hierarchies really is coming to a close. People don’t want to work for those kinds of organizations anymore, especially generations Y and Z. The costs are enormous, the frustration is enormous, and the cost of moving the information up and down the chain of command through multiple permission s steps is enormous.
Enterprises that figure out how to accomplish their missions absent costly top-down bureaucracy are going to be the winners in the 21st century, and they’re going to lead the way in the next century. A hundred years from now, the way organizations are constructed may be completely different. The future is calling, and there are better ways to do business that are faster, more agile, more flexible, and more respectful of human dignity.
Lisa Williams: That an excellent approach. What would you say organizations and companies can gain from implementing this self-management business approach?
Doug Kirkpatrick: There are myriad gains; I’ll describe three of them. First is engagement. Engagement is the willingness of people to apply their discretionary brainpower to the challenges and opportunities presented by the workplace. Gallup, for example, did a survey of the American workplace, and they also did an international survey. They found that about 70 percent of workers are disengaged, meaning they don’t really care about their particular jobs. They found that 20 percent of American workers are actively disengaged, which means they’re actively undermining their own workplaces. They laid the blame for this active disengagement on suboptimal bosses, managers, and supervisors that cause people to dislike their jobs in a very serious way.
The costs of this active disengagement are staggering. Gallup puts estimates the costs to at about $450 billion a year in the U.S. alone. If a company can move its engagement levels from 70 percent disengaged to 70 percent engaged, that’s enormous. It represents a huge competitive strategic advantage in the marketplace, and it also results in happier people inside the organization.