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Knowledge Bank Workplace Innovation

Best practices and other information about Workplace Innovation and Smart Working

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  • Author: Stein, Philip;
  • Publication date: 8 September 2014
  • Date added: 8 September 2014

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Rating: BK Bodem: democratic decision making and self-directing teams

BK Bodem: democratic decision making and self-directing teams

2014 - BK Bodem (BK ‘Soil’) is part of BK Ingenieurs (BK Engineering), an all round engineering consultancy firm which employs approximately 250 people. BK Bodem mainly offers services in the area of soil research and soil sanitation. BK Bodem employs approximately 85 people. 

Workplace Innovation

In BK Bodem, work is organized in self-directing teams focused on different customer groups (in total there are three customer groups per location). Teams are responsible themselves for the provision of services and for their financial performance. They work according to the ‘principle of minimal critical specification’: only goals are specified so that team members can decide for themselves how they would like to achieve their goals. Teams execute and organize their tasks autonomously as much as possible. This means that coordination of tasks and activities takes place within the team. In this way, team members learn to solve tasks and problems independently. Decision making is decentralized  and democratized, so that team members can have a say on the organization’s strategy and goals. Decisions are made on the ‘level of impact’: those who are impacted by the consequences of a decision will be the ones to take it. Anybody who wants to change something or has a specific proposal can bring his/her ideas forward. Decisions that impact BK Bodem as a whole are taken by the ‘core team’ (‘kernteam’), a team which consists of 15 employees plus the managing director of BK Bodem. The core team is democratically elected on a yearly basis. 

Motives & Goals

In 2011, BK Bodem took over UDM, a fellow industry member, thus going from 40 to 85 employees. Since UDM was much more hierarchically organized than BK Bodem and employees’ ideas were not taken into consideration, BK Bodem’s manager decided to completely change the organizational model. In this new model, employees would receive freedom and trust to organize their work by themselves, and their ideas would be seriously considered.

Before taking over UDM, BK Bodem’s manager was close to having a burn-out, because, in his own words, he felt ‘exaggeratedly responsible’, and consequently took on too much work. In the new organizational model, he wanted to see all employees running the organization together and sharing responsibilities. He believes that the old way in which the organization was structured, with a director and team leaders that would tell employees what to do, does not fit in the current zeitgeist. This vision was inspired by Ricardo Semler’s book ‘The seven-day weekend”, which inspired BK Bodem’s manager to organize the company in a new democratic manner. In the new organizational model, the following goals were set: (1) teams have to work in a more customer-oriented manner in order to achieve a good return; (2) employees’ skills and potential need to be better utilized; (3) employees have to take responsibilities and show entrepreneurial behavior. 

Implementation

The change to the new organizational model took place in two months. The new way of organizing work was designed, implemented, and communicated to BK Bodem’s branches by the ‘core team’ (constituted by the director and 15 employees from all branches). This process was facilitated by two external advisors. These advisors met with the core team in different occasions to discuss what core values and goals BK Bodem should have and where responsibilities should lie. This lead to the following guiding principles: give trust, get freedom, take responsibility.

In order to reach an agreement about the most important goals, both the core team and the stakeholders (the owners of BK Groep) researched the interests of stakeholders, customers, and employees and ranked them in order of importance. This research showed that different parties’ interests largely match: everyone thought that the continuity of the company was the most important.

Additionally, a framework for the distribution of power was set. The manager and the external advisors drafted a list of issues, such as opening a new branch or determining profit-sharing, on which possibly had to be decided. Then employees and stakeholders were asked who has the power to make a decision on certain issues. Decision-making power can be in the hands of the stakeholders & management of the BK Groep, BK Bodem, or both parties together). Concerning issues in which BK Bodem has decision-making power, such as hiring personnel,  it was decided on which level (management, core team, branch, customer group team, individual employee) the decisions should be made.

In order to reach the goal of working in a customer-oriented manner and in order to give the teams as much responsibility as possible, the teams are organized in customer groups and not according to functional specialization, so that a whole team become responsible for the service to a customer group.

In order to reflect on this new way of working, evaluation sessions were set up. A delegation of the core team went around the branches to ask how the work proceeded, what issues they encountered and what needed to be adjusted. If something did not work in practice, than adjustments were made. At a certain point, for example, there was fragmentation, because teams were too focused on their own work. As a result, teams did not know what was occurring outside their own branch, so that there was no optimal use of capacity planning and of knowledge sharing. This lead to the organization of monthly meetings with the whole branch in order to coordinate the activities of different teams. Furthermore in the meeting they take decisions based on the level of impact of the branch: they discuss proposals and vote about them. The results of these meetings are communicated to the core team, which coordinates the activities of all the branches, and sends further feedback to the branches. 

Working Approach

As above mentioned, the principles of the new organizational model are giving trust, getting freedom, and taking responsibility. In practice, in BK Bodem, there is trust that people do what is agreed upon; and employees have the freedom to find the best way to achieve results along with colleagues (principal of minimal critical specification). Therefore, employees do not need to conform to strict guidelines, but they have to think for themselves. Consequently, employees become accountable for their own choices, and, in turn, become more responsible:  they have to check that the way they chose to achieve a goal is successful. This responsibility is further strengthened by the fact that performance is evaluated on the basis of results, rather than effort. If an employee underperforms and does not respect agreements, measures need to be taken. If necessary teams can propose to shareholders and management to dismiss a team member.

Decision making in BK Bodem takes place in a democratic manner. Everyone, employee or manager, has one vote. This is both in the ‘core’ team as in the branch as in the customer group teams. The core team, which takes decisions for all the employees in BK Bodem, is chosen by the employees themselves. Elections for the core team are held yearly.This allows employees to have a say in the decision making process through a chosen representative.

In the new organizational model the role of team leader has been abolished, leading to the fact that employees  carry out a wider range of tasks, including those previously carried out by the team leader.. Teams jontly elaborate a budget and set their own targets. All employees indicate what turnover and profit rates they think they will achieve, and how much they think to spent on training costs.  Also, teams are responsible for the recruitment and selection of new team members. Teams are purposefully made small (3-5 people), so that it is easier to distribute tasks and to take responsibilities.

Along with the abolishment of the figure of the team leader, a number of new roles have been established in each branch and in the core team. These are treasurer, secretary and a chairman. These roles are without any ‘official’ power but they come with certain tasks and responsibilities. Furthermore, every month the core team comes together to take decisions and to brainstorm about the future of the organization and its strategy.

In order to continue to innovate, the core team organizes audits. A delegation of the core team visits the different branches to discuss with employees what goes well and what does not. They discuss whether everyone uses their skills optimally, whether people enjoy their work, and what opportunities of improvement BK Bodem has.

In order to ensure that this new working method functions properly, control mechanisms have been set up. It is extremely important that information about sales, profit, salaries, and expenses is transparent. Therefore, the teams’ ratio of profit and losses is published on the intranet every month. Every employee can access this information, which helps the teams to check whether they are in line with the rest in terms of budget. The progress of the teams is also discussed in the branch meeting. Teams are accountable to each other and to the core team about their financial- and sales results and their quality of services. Because the financial reward depends on the results, teams try to learn from each other and help each other. Consequently learning is stimulated. Additionally transparency also ensures that employees limit their working expenses. If, for example, an employee eats in an exceptionally expensive restaurant, the team can address the issue. 

Results

Two years after its implementation, the organizational change has achieved its goals. From a financial point of view, BK Bodem has achieved positive results. There is more customer contact than ever before, many orders are secured, and the average contract value has increased. This led to the hiring of 12 extra employees in 2014. The new organizational model has given employees more space for participation and autonomy. In turn, they take more responsibility and show entrepreneurial behavior. Since the role of team leader ceased to exist, employees carry out a more dynamic and diverse range of tasks, which enables them to develop themselves more than before. Indeed, in the previous organizational model, none of the employees was aware of the financial situation or had the knowledge to create a budget. In the current organizational set up, employees do draft budgets and identify targets by themselves, which enables the teams to better make use of each employee’s individual competencies.

The possibility to make decisions independently, and thus to have a say and more autonomy, has led to innovations. For example, members of a field team have developed a new app which allows them to carry out their work on an iPad, and not on a desktop computer. Consequently, they can work more efficiently, by staying connected with the office and exchanging live information through the internet. Earlier, the managing director would have had to approve  the decision to develop such an app, which would have probably been low in his or her priority list. Perhaps, the app would have been eventually developed, but the creation process would have been much slower than in the current organizational model. Another innovative proposal regarded the manner in which money available for a salary increase can be differently shared. After the implementation of this proposal, extra money is currently shared on the basis of two criteria. Firstly, 50% of the salary increase is awarded on the basis of personal development and individual results. In order to ensure that employees continue to actively function as team players, the other half of the salary increase is assigned according to the number of votes that a team player receives from others. Everyone can give a couple of votes, depending on the size of the group, thus those who are not proactive in the work of the team are less likely to win many votes.

According to an interview with BK Bodem’s manager, employees express satisfaction with their work, as they enjoy their activities and feel more involved. This is also valid for the manager, who can now do more what he is best at. The change has also enabled him to find a better balance between his work duties and his private life.

All in all, both the employees and the manager indicate that the organizational change has been succesful. The organization is steadily innovative and achieves good financial results; employees are involved, enjoy their work, and experience a high quality of work. 

Lessons learned

After an organizational change, it is necessary that the follow-up care of employees is taken care of in order to make the change last. Before the implementation of the change in BK Bodem, it was overlooked to come up with a well designed plan for training employees to prepare them to the new way of working. Consequently, many employees developed late all the skills that were required for functioning well in the new organizational model. This shows the importance of having a plan for training employees before the change takes place in order to train employees as quickly as possible after the change takes place. 

Source: cases

Sector: services

Theme: self organisation, co-determination, team working