The bossless office: Is it the wave of the future or an idea that will always be a utopian dream, given the inevitable intrusion of human nature?

Recent articles in the business press have extolled the benefits of work environments where there are no bosses and no titles, where employees decide among themselves which projects to pursue and which people to hire and fire, and where each employee is responsible for deciding his or her own salary, raises and vacation days.

Reactions to the idea are varied. Even proponents of bossless offices note that decisions can take longer to make when there is no hierarchy. In addition, human nature suggests that someone will most likely rise to the forefront of any group and, even without the title, assume the role of leader — not always in a helpful way. But these proponents also say that a flat organization allows employees to work more creatively, more productively and more independently, and feel a greater stake in the success of the company.

A bossless office “is a very democratic way of thinking about work,” says Wharton management professor Adam Cobb. “Everyone takes part in the decisions, so it’s not being directed from above. The idea is that the people doing the actual work probably have a better sense of how to get it done than their bosses do. It’s a matter of distributing the expertise to where the expertise actually lies.”

Peer Pressure

On the other hand, Cobb says, an office with no boss or manager overseeing the work flow can be disastrous. He cites an academic paper from several years ago that examined the fate of a small company whose owners decided to try and stave off bankruptcy by letting the employees run the company. “Over time, the workers became more oppressed than when the bosses were there,” notes Cobb. “Everyone became a monitor, constantly checking up on their fellow employees, even setting up a board to track what time people came into work and when they left.”

At a minimum, Cobb says, bosses do provide one valuable attribute: “They are a common enemy. Workers know the opposition. When employees become self-managed, it’s hard to tell if you are all working together, or if everyone is working against you.”

During the 1980s and 1990s, adds Wharton management professor Matthew Bidwell, experiments were done that centered around pushing responsibility down onto horizontal self-managed teams. “Some people felt these were actually more coercive, because rather than having one manager you could ignore, you have all your colleagues on your back all the time. The peer pressure can be very tough.”

Such observations raise the question of what role bosses should play in organizations in the 21st century, given the dramatic growth of the knowledge-based economy and advances in technology that have changed the way employees experience work: They can now communicate with others faster, more easily and without being in the same room or on the same continent.

“There are many ways to be a boss,” notes Wharton management professor Nancy Rothbard, who has recently been researching a company where the bosses are 26 years old and the oldest rank-and-file employee is 25. “I don’t think the bosses were comfortable with the command and control style of management because they didn’t feel they had the credibility for it,” she says. In such situations, the “boss as coach” model can work rather than “boss as dictator.”

The big challenge for a bossless company, she adds, is the way decisions get made. “The speed of decision-making is often slower if you need consensus.” If the decision is an obvious one, then sharing common values will help the group arrive at the right conclusion; if not, eventually one individual must step in and decide. “The buck has to stop with somebody.” 

Bosses play other roles that may be hard for groups to perform. They are often responsible for establishing the company’s mission; they may be necessary for presenting the face of the company to the outside world, especially when it comes to IPOs or other forms of raising capital; and they help prevent what economists call “free riders” — employees who shirk their responsibilities and need to be monitored. Social pressure from peers may prevent this, but it may not.

A bossless office also raises the question of how introverts will fare when the group dynamic requires people to step up and participate in decision-making. “One of the advantages of hierarchy is facilitating efficient coordination,” says Wharton management professor Adam Grant. “When people know who’s in charge, it’s much easier to assign roles and delegate tasks. In a boss-free office, people often face uncertainty about who has authority, status or responsibility for a given project.”

Research shows that in response to uncertainty, “people tend to express their natural personality traits,” Grant adds. “This creates a risk that extroverts will gravitate toward being dominant and assertive, with introverts resorting to quieter, more reserved roles. The downside, of course, is that if boss-free organizations don’t manage norms carefully, they may end up missing out on some of the valuable ideas and contributions that introverts offer.”

The influence of extroverts versus introverts “depends on how decisions are made in the company,” says Cobb. “If it wound up that the loudest people dominated, then it would very quickly be a de facto hierarchy. If the decision process is that everyone has a vote, that might be less of a problem.”

Cobb points to another attribute that is necessary for bossless offices to function well — employee self-motivation, which is hard to screen for in the job hiring process. “Do you have to be motivated by extrinsic factors, or are you motivated by what you do?” asks Cobb. “Do you take pride in your craft, or your job? That would be the type of person to hire.”

Poor Grades for Bosses

John Hollon, a vice-president at TLNT.com and former editor of Workforce Management magazine and workforce.com, is a skeptic of bossless offices. “We have known for a long time that the layers of management are thinning,” especially during the current recession, he says. “But it’s virtually impossible for a company to get along without a few people who are in charge to do things like make sure employees get to work on time, decide that everyone will get a 3% raise instead of a 4% raise” and, above all, “tell Joe that he isn’t pulling his weight and it’s not fair to the rest of the team.”

For decades, Hollon adds, organizations were built on the military command and control model. “It offered a structure for getting decisions from the top down to the bottom and it had a chain of command that could get things done. What businesses found is that there are big downsides to how that chain of command can operate in anything less than life and death circumstances, which is what the military dealt with.” In the aftermath of the recession, “a lot of companies are waking up and saying they can do things differently. They don’t need as many layers of management.”

In a blog post last month titled, “The Bossless Office Trend: Don’t Be Surprised If It Doesn’t Last Long,” Hollon refers his readers to a skit by the British comedy group Monty Python from their movie, Monty Python and the Holy Grail. He notes in the post that “human beings usually don’t make group decisions all that well. Someone — anyone — needs to be the final arbiter if you ever want to get something decided and keep things moving ahead.” For most organizations, he adds, “a bossless environment would soon turn into a corporate version of Lord of the Flies.”

Bosses, on the other hand, don’t always get good reviews from the rank and file. A Towers Watson Global Workforce Study earlier this year surveyed 32,000 employees at mid- to large-size companies about such issues as workplace stress, work/life balance and the value of bosses. Bosses didn’t come out well. According to a preliminary summary of the findings reported by The Wall Street Journal, less than 50% of employees have confidence in their senior managers, and only 44% believe their managers care about their well-being. In addition, managers are seen as untrustworthy, they don’t provide adequate guidance and they “fail to inspire good work.”

Thomas Davenport, a senior consultant with Towers Watson and co-author of a book titled, Manager Redefined: The Competitive Advantage in the Middle of Your Organization, says the model of being a boss these days is evolving into what he calls “offstage management.” The idea, he notes, is that “nobody comes to work in the 21st century and says, ‘Please manage me.’ They say, ‘Create an environment where I can be successful.'”

In this scenario, managers provide the necessary resources, deal with office politics, make sure information gets channeled to the right places and so forth. The dissatisfaction comes with what Davenport calls “the manager death spiral,” which occurs when an organization promotes an employee to the position of boss based on the fact that she does her current job better than anyone else — rather than because she has demonstrated any leadership or mentoring skills. At the same time, no training for this new boss is available because the training programs have been eliminated and the HR staff has been downsized. “Essentially, the company has promoted the wrong person,” says Davenport, an action which does not suggest to employees that the company cares about their interests.

Davenport is skeptical that self-described bossless environments are truly bossless. If one walks around and observes how a company operates, he will see “natural leadership coming out in every meeting. That’s how humans work. The people may not have the title, but someone is emerging to direct the conversation and come up with ideas…. When the issue is moving an organization from point ‘a’ to point ‘b,’ someone has to have a vision and [inspire] the internal motivation to get there.”

He cites a study that analyzed game companies in an effort to find out which group was most responsible for the prosperity of those firms: talented producers, great project managers or great executives. “Great project managers were the most important pivot point,” Davenport says. “Emergent leaderless groups” do not make the necessary decisions about resource direction, product pricing and other issues. But the key is to handle these issues in a way that allows employees to be autonomous and self-determining. “That’s where bosses have historically fallen down,” he notes.

Another key element in a successful bossless environment is “a very strong value-driven culture,” adds Rothbard. “This, in a way, substitutes for the boss. Decisions are then inspired not by someone above you saying, ‘Here is how we operate,’ but by the presence of a group of employees who are fairly homogenous in terms of their values.” Once again, hiring is key. Companies screen employees to ensure that their values are consistent with the company’s, and then “do tremendous socialization” of these employees once they join.

Rothbard and others cite parallels between bossless offices and the new world of crowd sourcing, where companies come up with ideas and then put them out to the public for input. “It used to be that R&D was totally in-house,” says Rothbard. “Now some companies are trying to use the collective wisdom of the crowd to help with decision-making,” similar to the way that some companies rely on their groups of employees rather than on one top-down decision-maker. 

Yoplait and Southwest Airlines

In addition to encouraging creativity, bossless environments also increase efficiency, according to Stephen Courtright, a management professor at Texas A&M’s Mays Business School. He cites the example of Southwest Airlines, which allows baggage clerks the freedom to decide how to solve a customer’s complaint on the spot, without having to say, “‘Wait while I consult my boss.’ In a service-oriented environment, it can foster greater customer satisfaction,” says Courtright.

Flatter organizations also foster “intrinsic motivation,” he adds. “When employees have a degree of self-management, and therefore a greater sense of accountability, it means their motivation is based not on their standing with the manager or boss, but because they identify with the work.” 

Problems can arise when self-managed teams are launched but are not given guidelines about what they should be producing. A large engineering company Courtright advised had experimented with self-managed teams but had neglected to give them guidelines on production. The teams were so efficient that they ended up with stockpiles of unused inventory. “The highest performing teams are those that have a strong sense of autonomy but also receive high levels of feedback, including the setting of goals, from management,” he says.

Bossless environments work best in organizations where creativity is absolutely essential, adds Courtright, who co-authored a paper titled, “Peer-based Control in Self-managing Teams: Linking Rational and Normative Influence with Individual and Group Performance,” published in The Journal of Applied Psychology earlier this year. That includes more than just technology-based companies. Yoplait, for example, has a history of relying on self-managing teams charged with launching new flavors and products — one of the more creative sides of the business.

Courtright doubts that even staunch advocates of self-managed teams would say it’s the “cure-all for organizational problems. But a substantial body of research shows that humans have an innate need for autonomy. They don’t like being micromanaged. One of the things self-management helps employees do is [feel] a degree of control over what they do.” Corporations apparently have caught on, he adds, citing surveys showing that while less than 20% of Fortune 1,000 companies had team-based structures in 1980, that number rose to 50% in 1990 and 80% in 2000.

The Democratic Ideal

Bidwell suggests that “levels of ‘bosslessness’ already exist in professional services firms and academia where a lot of decisions are made by committees. At universities, there are deans, but when they want to make major changes, they usually put things up to the faculty for a vote. So I think a lot of organizations have been making decisions without a clear hierarchy for a long time.” He would be surprised, he says, if bossless environments become “the way of the future, but I think they can work in some situations.”

As for Cobb, “in the U.S., we like to think of ourselves as living in a democratic society, with the idea that everyone is represented, that everyone has the right to have a say and be heard,” he says. “So how do you create economic structures that can leverage that? People have experimented with it forever, with varying degrees of success.”