A Google search of the phrase “organizational self-management” yields around 216 million search results — a testament to the term’s dissemination in the popular business press. But what exactly is organizational self-management, and what are the ramifications for corporate learning and development?

Organizational self-management is the business design philosophy expressed by individuals freely and autonomously performing the traditional functions of management (i.e., planning, organizing, coordinating, staffing, directing and controlling) without mechanistic hierarchy or arbitrary, unilateral power over others. Self-managers often replace traditional hierarchy with voluntary peer-to-peer commitments, whether long- or short-term, formal or informal, written or verbal.

The Challenges of Bureaucracy

Traditional bureaucratic management emerged in the 1800s to serve a breathtaking confluence of historical circumstances: a gigantic emerging national market for industrial goods, new technologies and the demands of a quickly growing transportation sector dominated by railroads. Emerging industries, including automobiles, telecommunication and aviation relied heavily on hierarchical managerial systems that drew a clear demarcation between managers and laborers and between jobs that required specialized skills and jobs that didn’t.

Bureaucracy worked, in a sense. It allowed corporations with a valued product or service to scale up in size; to maintain a semblance of control; and to make a profit given a decent strategy, stable markets and reasonable execution. Today, however, the bureaucracies that served people so well a century ago are terminally ill. Professor Gary Hamel and Michele Zanini of The Management Lab estimate that unnecessary bureaucracy burdens the U.S. economy by around $3 trillion per year.

Welcome to the new world of work.

Employee engagement surveys routinely find that roughly two-thirds of employees are disengaged at work and that disengagement is related to poor leadership on the part of managers and supervisors. Most employees are not emotionally invested in their workplaces, do not give extra effort and are open to leaving for more money. This disengagement represents an enormous cost in productivity and human happiness. It’s also a huge risk for learning and development budgets; companies waste education resources on detached employees, and those employees often take their freshly-minted learning to other companies.

Self-management: The Solution to Employee Disengagement

Fortunately, organizations are not condemned to succumbing to the numbing reality of soul-crushing bureaucracy. Organizational self-management is an elegant solution to the challenging engagement puzzle. It makes obsolete the idea of a worker’s depending on a higher-authority manager for recognition and encouragement and removes all inherent, structural barriers to full engagement. It gives human beings the space to learn, develop and thrive.

Organizational self-management goes well beyond traditional empowerment programs, where managers spoon-feed subordinates with designated slices of power while retaining the ultimate power to discipline or terminate. Self-management provides people with all the power they need, from the first day of work, to build relationships, acquire resources and do their best work. It also provides substantial checks and balances to restrict the exercise of arbitrary and capricious power over others.

Organizational self-management allows people all the autonomy they need to achieve purpose and meaning at work: to make the decisions that they are in the best position to make, to manage business processes, and to decide for themselves what they need to learn and do to be successful. If employees have free will, it’s not a leader’s job to motivate them. People will either motivate themselves or not. In the same way, people are responsible for determining their own personal learning and development paths at work. No one knows as much about an individual’s intent and learning needs as the individual himself or herself.

Free will, exercised in an organization of self-managers, is powerful and should be tremendously liberating for traditional managers. A corporation should, by all means, make work-related learning opportunities available to employees. Ultimately, however, people themselves have to choose to develop themselves if they want to grow. Some have called this philosophy “organizational adulting” — another term for recognizing the exercise of free will at work.

Leaders in a Self-managed Workplace

Organizational self-management also represents an acid test for prospective leaders: Since no one necessarily has command authority in a self-managed work environment, no one has an obligation to obey anyone else without question. Leadership roles must be cultivated and earned. The employees who are willing to develop high-quality work relationships and model exemplary behaviors with courage, ethics and vision will be viewed by their colleagues as natural leaders. The reverse is also true: Minimal investment in relationships will not pay leadership dividends.

Leadership in a self-managed system tends to devolve to the subject matter expert or experts able to shed the most light on a particular topic. Organizational self-management embraces the concept of dynamic hierarchies, with self-organized teams forming (with or without leaders) around the problem, process or project at hand. Leadership then rotates to the person with the expertise most relevant at a particular moment in time.

Practitioners of organizational self-management are sharing their ideas and practices and helping to create momentum for new ways of working that are better suited to a workplace characterized by Generation Z, the blockchain and light-speed communication. Vanguard companies like W.L. Gore, Haier Group, Buurtzorg, Zappos and others are lighting the path to a new frontier of innovative self-management and reaping the reward of reduced bureaucracy: a rich, sustainable source of strategic competitive advantage.

While the exigencies of a developing railroad industry across a young and raw continent may have demanded one type of management approach, the type of management demanded by a networked world, shaped by surging floods of information-rich electrons, creates demands that no one could have foreseen when Samuel Morse invented the telegraph. It’s time to design learning organizations that are worthy of the resourcefulness and intelligence of the human beings who invest their working lives in them.