Self-Organization Discussion 1 – Why?

I believe in the power and importance of human dignity captured through the value created by their work. I also believe that self-organization is a powerful method for ensuring that human dignity is there.

Let’s start with the foundational idea about value:

Only that which the customer pays for is value. All else is waste. — Paraphrasing Taiichi Ohno

The customer would be just as happy pulling a copy of Orléans or Scoville out of a replicator as opposed to our existing system. Everything except for the deliverable is not what the customer is paying for.

Sure enough, we live with waste because we do not understand how to generate the value without some waste. Seeking the reduction of waste to 0 is like seeking perfection, we will never get there regardless of the scale of our improvements.

At TMG, we believe that a customer can pay for a product with cash, and they can pay for content in the form of attention (and this attention will increase the likelihood of future cash purchases). In the case of a game, the customer is paying for the game and all of the materials required to successfully play the game. All else is waste.

Therefore, of all of things that TMG pays for in its operation, only the manufacturing cost, game design costs, and artwork cost are connected to the actual value that the customer pays for. The things listed below, and more is waste:

  • Management of the following: manufacturing, logistics, pre-production, game submissions, company organization, and other types of management.
  • Transportation. Shipping from China to the USA to the distributor to the retailer to the customer.
    Customer Service (Replacement Parts). This is rework associated with a manufacturing defect.
    Sales. The customer is paying for the game itself, not for us to work the existing system to put it on the shelf that they buy it from.
  • Distributors exist because they aggregate the creators and the retailers while putting themselves in the middle for the purpose of reducing the total aggregate waste that would be in the system without them. It is from this reduction of total waste that they derive their profits.

Self-Organization Reduces Management Waste

Empowered by an understanding of value, it is easier to see management as waste. If a manager is just there to tell you what to do, make sure it happens, and then apply the carrot or the stick, then there is no value created. If a manager is instead more of a coach and working with an employee generating value to improve, then it is the cost of waste now in exchange for the reduction of waste in the future.

In my imagination of the optimal self organizing company, work just happens.

Production flows and value it created. Everybody in the organization actively contributes to the creation of projects from which value is derived. This is not how it works in reality, to which we should consider why:

Self-organization is rare and when previously (or currently) accustomed to a boss measuring you against a specific metric, then you know what to do. Additionally, when you have the specific metric, how often are you working outside of the scope of that?

TMG has always been self-organized, and we have been dealing with the consequences of it since the first full-time employee (other than myself) was hired January of 2014. Those consequences make it difficult, but it is very worth it.

In that school of fish pictured above, there is no manager dictating organization. It is the responsibility of each fish individually and as a group. Thankfully for the fish, how and why to do this is so deep inside of them. For the fish, how and why has not been removed from them by the existing traditional command and control system.

3 Items Self-Organization Requires Most

In my experience, self-organization requires these 3 items the most:

  1. Clarity. Each individual needs a deep understanding of why the company operates and their area of responsibility executing on that vision.
  2. Inspiration. Each individual needs to to be inspired about accomplishing the work within their area of responsibility. Self organization will not work if employees require manipulation (carrot/stick) to work.
  3. Authority to act autonomously. Self-organization is certainly not going to work if individuals are not given the capacity to act.

Additionally, self-organization seems to benefit from a caring community within the organization, inter-related work (such that slacking will be noticed by other non-manager employees), coaching, people development, flexibility to work on multiple things, and safety from judgement or termination.

Ultimately this means that each person added to the team has to be a very particular kind of special.

Self-Organization Is Hard, But Who Wants Managers?

It is seriously hard. At TMG we were flailing around for quite awhile. Heck, we are getting things working and it still feels like we flail around.

However, I believe that we are on the correct track and that we are really starting to figure this out… Even if we don’t quite know it well enough to explain it simply yet.

Have you tried something that looks like self-organization or seen somebody else doing it? How did that work out?

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