#1 Democratic, Self-Managing Teams
Companies implementing the NER model get rid of any hierarchy and top-down management or decision-making. Then they redesign the organization into a network of teams, organized around products, services, regions, clients, or processes. The specific team organization depends of course on the type of company, its priorities and the environment it operates in. However, what's crucial is that these teams become fully self-managing, meaning no higher team or executives tell them what to do. Every team elects a team leader about every 6 months who represents the team in cross-team meetings that serve to align plans & objectives across the company. Other types of cross-team meetings can of course also be formed with other elected team representatives. However, a team representative or leader is typically only allowed to serve as such for a maximum of two years in order to avoid any "boss-like" behavior.
#2 Shared Purpose & Values
For NER companies it is particularly important to have a strong focus on a shared purpose and a list of shared values as this bonds together the more independent, self-managing teams. Think of the purpose as the overarching, common project across the network of self-managing teams while the shared values act as the key elements of the network's overall identity.
#3 Yearly Plan of Ideas & Objectives
Each year the entire company is working on a strategic plan for the year which lays out priorities and to-dos for the entire year. Objectives are then reviewed (sort of OKR style) three times per year with the entire staff. This is a crucial part of turning the shared purpose (see #1) into actionable goals and plans and allowing everyone in the company to participate. There is always someone appointed as the facilitator of this process who coordinates the interactions between different teams and people.
#4 Radical Transparency
This part is all about building trust and responsibility by creating a fully transparent environment. For NER companies, this means that company financials, salary levels, team commitments and results are made fully transparent and accessible to everyone in the organization. Wanna know what your colleagues make or the expenses of another team? At NER companies everything is transparent.
#5 Fair Salaries, Ownership & No Privileges
One of the first actions of implementing a NER system at a company is lowering the gap in salary levels. At NER companies the rule is that the highest earning 10% can earn no more than 2-3 times the salary of the lowest 10%. Lower salaries are increased to adhere to the rule. Then, employees are also provided with a financial stake in the outcome, meaning that 30% of additional profits are spread among all workers. Lastly, all privileges such as closed offices, bonuses, paid overtime, and special access to information are eliminated.
#6 Control Turns Into Decentralized Trust
NER companies move by purpose, goals and commitments (see #2 and #3) not by hours. There is no company-wide time-clocking, new project approval forms or individual performance reviews. Each team is responsible for its own team members, culture, and work objectives. The company basically becomes a network of small, semi-independent communities. In many NER companies, so-called weekly commitment meetings across teams help align teams and clarify work priorities whereas so-called team culture meetings help teams define, modify or eliminate team roles and policies. Any member of the team is able to propose a change or new idea for the team by submitting a proposal.
#7 Integrative Decision-Making Process
So, how are important decisions made and conflicts resolved at NER companies? Through a democratic, six step process, coordinated by the team leader:
- Proposal: A team member who wants to discuss a specific challenge, idea or topic submits a proposal to the team.
- Questions: Other team members have the opportunity to ask clarifying questions which the initiator of the proposal can choose to answer.
- Reactions: Team members can then, one by one (!), share their reactions to the proposal.
- Amend & Clarify: The initiator may respond to comments by others and use these to improve the proposal.
- Objections: Now, every team member can share any objections they have regarding the proposal.
- Integration: In case of objections, the facilitator conducts a discussion between team members to make adjustments to the proposal that resolve any objections. Proposals are only adopted when all team members approve the proposal.
#8 Fully Inclusive
NER companies emphasize the inclusion of every person giving everyone the space and opportunity to have a say. In meetings and decision-making, team members are asked one by one to share their comments and ideas, rather than just letting those speak who raise their voices loudest. And at any time, any person can submit a new proposal to a team with all proposals having to be discussed.
As you can see, NER is a radical but tested approach to business that focuses on the empowerment of employees, full transparency, fairness, democratic principles and shared responsibility. It's an innovative, more purpose-driven way of working together.
If you are interested in learning more about the NER model, here are a few resources we highly recommend:
10 Components That Successfully Abolished Hierarchy
The 'new style of relationships' (in Spanish)
P4Q - 10 Elements of a Self-Managing Company
NER vs. the TEAL model (in Spanish)
What are self-managed teams (and how can you create them)?
NER Group, Walter Pack’s model for social justice and sustainable development
NER Group
NER by K2K
Interview with Koldo Saratxaga
