Morning Star, the world’s leading tomato ingredient processor, is probably one of the most fascinating companies in the world. They aren’t even located in the Silicon Valley, but rather in the Central Valley of California.
Although it’s not too far geographically speaking, it’s really a world away in term of perceived innovation. Yet, Morning Star has created what is certainly the world’s largest and most successful self-managed company, meaning there is no structural hierarchy.
Readers of the Wall Street Journal, The New York Times, Harvard Business Review and other fine publications will certainly recognize Morning Star. But here’s what you may not know.
To outpace its competition, Morning Star decided to shoot for the stars, forever looking for perfection in everything they do, understanding that’s obviously not always possible. But by setting that goal, they can measure their performance and continually improve.
What seemed like a good fit for massive capital equipment such as tomato processing, turned out to be a very bad fit when it comes to knowledge, workers and management. They realized how costly waste is, whether dealing with tomatoes or management. So, they decided to cut down on waste in both arenas.
It is fairly straightforward to measure the financial cost of hundreds of pounds of tomatoes going to waste due to defective machinery. But how do you measure the waste produced of a middle manager going home feeling that his/her job doesn’t mean anything, since every idea is perceived as being shot down by upper management? Their solution might rub you the wrong way at first glance, but it’s working for them and just might work for you, too.
Think about your own situation as a CEO or Executive. You need to get some stuff done, so naturally you call a meeting. You open the door of the conference room at the appointed time and no one is there. People have voted with their feet and chosen not to show up because you failed to make a compelling argument that your meeting was worth their time. Ouch!
I was fortunate to have Paul Green, Jr. from the Self Management Institute and The Morning Star Company as a guest of our “Second Friday’s Alchemy with CESSON 3.0” Google Hangout. And boy did Paul deliver!
Please spend 30 minutes of your busy day watching the broadcast and you will forever challenge assumptions you take for granted about your role as a CEO or Executive. You will also learn how to realistically forever look for improvements in everything you and your people do.
For example, each employee of Morning Star, from the assembly line production worker to the knowledge-based worker, has to create and sign a CLOU or Colleague Letter of Understanding. The document, which is available on the company’s internal site for everyone to see, specifies the objectives of each worker and who in their environment can hold them responsible.
Their principle is Direct Communication and Gaining Agreement, implemented through the CLOU, Steppingstones and Peer Regulation and Feedback. The benefits are higher individual performance (productivity), quicker decisions and an overall responsive environment.
No wonder Morning Star was selected as one of Inc.‘s Magazine 25 Most Audacious Companies in May 2013. This and other fascinating facts and case studies about Self Management can be found on their institute’s website.