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What is a Liberated Company, Really?

Summary by NextGen of the research publication “Liberated Company: Proposal for Characterization Criteria by Michèle El Khoury, Annabelle Jaouen, and Sylvie Sammut.”

Synthèse par NextGen de la publication de recherche “L’entreprise libérée : proposition de critères de caractérisation par Michèle El Khoury, Annabelle Jaouen et Sylvie Sammut”

Despite its recognition for its managerial and social innovations, the liberated company is the subject of many debates regarding its essence and modalities. Many companies identify as “liberated,” but research has not been able to clearly define the boundaries of this term, partly due to related concepts such as Holacracy and the opal organization. Researchers Michèle El Khoury, Annabelle Jaouen, and Sylvie Sammut conducted a systematic review of literature concerning the liberated company from 1992 to 2021.

Liberation from hierarchical constraints and encouragement of initiative-taking

The term “liberated company” was popularized by Isaac Getz and Brian M. Carney in their book “Freedom, Inc.” These companies are characterized by their flexibility, decentralization, and a more informal project-based approach to management. They appear as organizations where the majority of employees have the freedom and full responsibility to take actions they deem beneficial for the company, without strict directives from leaders. These companies promise to improve quality of work life and innovation. Indeed, with the declining effectiveness of traditional management methods, companies are seeking new approaches, hence the attraction to the liberated company.

Liberated Company, Holacracy, Opal Organization, and Management 3.0

The publication examines the different terminologies used to refer to organizations that have adopted non-traditional management models.

  • The Liberated Company is described as a company where the majority of employees have the freedom and responsibility to act for the benefit of the company, without directives imposed by hierarchy or strict procedures.
  • Holacracy is a management method focused on agility and the distribution of authority among fluid organizational circles. It emphasizes a complex constitution for governance.
  • The Opal Organization is described as an entity where employees are encouraged to remain authentic, considering the organization as a living organism.
  • Management 3.0 focuses on balancing relationships between managers and collaborators, promoting collective responsibility, and placing humans at the center of concerns.

Common Principles and Specificity of the Liberated Company

Different in their terminology, these concepts share many underlying principles, such as employee autonomy, responsibility, and decision-making. However, these principles are interpreted and implemented differently according to each specific model. According to Isaac Getz (2017), the Liberated Company resembles a philosophy. He believes they cannot follow a single model because each company is unique, and it is the employees who are best placed to indicate the organization that suits them best. Nevertheless, the study’s results reveal characteristics that help better understand the concept of the liberated company.

The 12 Criteria of the Liberated Company

The researchers identified 12 criteria to characterize the liberated company and distinguish it from similar concepts. These characteristics are:

  1. Flattening of the structure and removal of intermediate management levels.
  2. Culture focused on humanistic values.
  3. Presence of a liberating leader.
  4. Autonomy in decision-making.
  5. Measures promoting equality and elimination of symbols.
  6. Implementation of collaborative devices.
  7. Reduction of hierarchical control.
  8. Implementation of R&D policies and support for entrepreneurship.
  9. Promotion of empowerment and employee accountability.
  10. Fostering transparency.
  11. Mutual trust (vertical and horizontal).
  12. Division into small autonomous teams.

In summary, the liberated company is an organizational model that seeks to eliminate traditional hierarchy, value ethics and transparency, and empower its employees for greater efficiency and innovation.

Towards a Dynamic Approach to the Liberated Company?

It appears that not all identified characteristics of the liberated company are always present at the same time, and they can evolve to different degrees. Hierarchical levels, for example, may vary. Depending on internal or external needs and conditions, companies may choose different combinations of these characteristics. The liberated company must therefore be seen as a process, with its characteristics serving as steps toward implementation. The ultimate goal is to optimize employee freedom and responsibility while considering contexts and limitations. Some steps backward are also possible depending on the context.

Towards a Satisfactory "Liberation Threshold"?

There might be a “liberation threshold” for each company, a point at which the disadvantages of liberation outweigh its benefits. Pushing liberation beyond this threshold can entail risks. For example, removing too many hierarchical levels can complicate communication, and the absence of hierarchical control can lead to power struggles. Good communication is crucial, and some companies can even function without managers while succeeding. Thus, it is essential to understand the liberated company as a process to minimize risks.

Managerial Contributions

This study, one of the first to define the liberated company, does so exclusively through “operationalizable” criteria. These elements can help leaders understand where they stand in relation to the liberated company, clarify the concept, and provide tools to implement a liberation process. Beyond these elements, managers are advised to create participatory spaces to co-construct the practical implications of the liberated company. By perceiving it as a process, managers can assess the company’s evolution by comparing different moments in this journey.

Author: Luc bretones, Founder of NextGen