The most important and inspiring business book I’ve ever read was written by a first-time author from Belgium who self-published his book in March. It’s called “Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness,” and the author’s personal story is nearly as inspiring as the content of the book.
In March 2011, Frederic Laloux, a management consultant who had spent 10 years working for McKinsey, and another four on his own, suddenly recognized that he was feeling a growing sadness and lack of energy.
“When I listened to the sadness, I realized it was a form of grief,” Mr. Laloux wrote me this week. “The work I had loved so much was work I simply couldn’t do any longer. I came to the realization that I was in a very different place than the executive teams of the large corporations with whom I had been working. I just couldn’t work with these big organizations anymore. They felt too soulless and unhealthy to me, too trapped in a rat race of just trying to eke out more profits.”
Nearly overnight, Mr. Laloux, now 41 and married with two young children, gave up his consulting practice and the healthy income that came with it. When he considered what to do next, a simple question occurred to him: What would healthy and soulful organizations look like?
For the next 2½ years, living frugally and mostly on savings, Mr. Laloux researched organizations that fit a series of criteria he developed, with the intention of writing a book about what he found. Over time, he settled on 29 principles that characterize a new model for organizations. Ultimately, he focused on 12 companies he considered models, seven based in the United States and five in Europe, 9 for-profit and 3 nonprofit.
The smallest had 100 employees, the largest 40,000. One was a secondary school another a nursing organization. The rest ranged across businesses as disparate as tomato processing, electricity production and distribution, technology consulting, and hydraulics cartridge valve and manifold manufacturing.
Mr. Laloux’s distillation of the common practices that characterize these companies provides a rich road map for organizational reinvention. But his descriptions of how these companies actually work — including the voices of their employees – are what make the book most compelling and convincing.
Take Buurtzorg, an organization founded in 2006 by a nurse named Jos de Blok, which provides home care to the sick and elderly around the Netherlands. The organization has now grown to 7,000 nurses, but there is almost no bureaucracy or middle management and few organization-wide policies for how to operate.
Instead, the nurses manage themselves, in teams of 12 or less. They monitor their own performance based on competency models the teams devise for themselves, and they take corrective action together if productivity drops. Coaches are available when specific problems arise, and the coaches may suggest solutions that other teams have used, but they have no power to impose these solutions.
To avoid creating a “caste” system, there is no central pool of experts in the organization. Rather, nurses are encouraged to build expertise in areas that most interest them. All the nurses are able to identify and access experts through the organization’s intranet. Rather than being treated by a rotating cast of specialized nurses, patients are able to develop a relationship with one nurse over time. It’s a more intimate, satisfying and humane experience for both parties — and, it turns out, a far more effective and efficient approach to nursing.
Compared with traditional nursing organizations in the Netherlands, according a study conducted by Ernst & Young, Buurtzorg’s patients heal faster, require only half the amount of care, experience one-third fewer emergency hospital admissions and have shorter average stays when they are hospitalized.
Ernst & Young estimated that the Netherlands would save nearly $3 billion a year if all home care organizations achieved Buurtzorg’s results. Scaled to the United States population, the number would rise to $50 billion in savings. “Not bad for just home care,” Mr. Laloux writes. “Imagine if the incomparably bigger hospital organizations were to be run in a similar manner.”
Or consider an even more unlikely example of self-management: FAVI, a successful French brass foundry which employees about 500 people. FAVI operates with teams of 15 to 35, most dedicated to specific clients. As with Buurtzorg, each team organizes itself with no centralized rules, no middle management and no regularly scheduled meetings.
When coordination is required — say to manage changing demand among teams — a meeting is convened that includes one member from each team to discuss where overstaffing and understaffing exists. It takes a few minutes, and afterward, volunteers are sought to move from one team to another for a designated period of time. At FAVI, workers neither clock in and out. Nor are they measured by production quotas. Instead, they are simply expected to do their jobs.
Trust, Mr. Laloux found, is perhaps the most powerful common denominator in the companies he studied. “If you view people with mistrust and subject them to all sorts of controls, rules and punishments,” he writes, “they will try to game the system, and you will feel your thinking is validated. Meet people with practices based on trust, and they will return your trust with responsible behavior. Again, you will feel your assumptions were validated.”
Mr. Laloux has tested precisely this assumption with his book. If you go on Amazon, you can download his book for $9.99 and purchase the paperback for $14.95. But you can also download it free, and then commit to “gift” back to Mr. Laloux whatever you feel it was worth after you read it. Ten thousand people have purchased the book in the eight months since it was published, even though he has done no marketing, and the book is only available online.
“The average amount people donate is $22,” Mr. Laloux told me. “Not everyone gives back, but some give $50 and others have given $100 or $200. They could have paid $10 or even nothing, but they want to give more, because the book means so much to them. This has played out wonderfully. Because of the book’s success, I can now spend half my time on projects that I feel are very valuable but don’t bring income. I’m beginning to believe this is what happens when you truly do your soul’s work.”