## Abilene’s Paradox and the Consequences of Self-Management: How the Trendy Management Myth of Self-Management is Destroying the Largest Companies

You all know that I am a huge proponent of classic management. That’s why I view “Teal,” holacracy, self-management, corporate agile, prydomes, and other so-called “flat” and matrix (misunderstood) organizational structures as utterly, absolutely, out-of-control nonsense.

This is not an emotional judgment, but rather the outcome of a football match in my mind. Every “goal” represents facts that confirm or refute effectiveness—kicking into someone’s net. And so far, classic management is winning with a score of 104,950 : 0.

Because any educated manager knows that in the absence of leadership and external management, any group is plagued by groupthink errors, the main one being Abilene’s Paradox. This paradox lies in the fact that often, decisions made within a peer group contradict the interests of all its participants.

Want a tough hit? We’ve got you covered. Once, self-management and “matrix” structures threw Nokia’s history against the wall. Let me tell you about it.

# What Are Effective Communications

Once, Nokia produced just a couple of perfect phone models each year and was seen as a premium brand. However, Nokia’s leadership decided that releasing two new models per year was no longer enough, and the company felt an artificial need to produce up to 40 or even 50 new models annually… An utterly insane number. Nokia’s management realized that developing such a volume of models was impossible within the old, product-oriented business structure. So, they chose to reorganize the company by introducing various divisions made up of self-managed teams tasked with creating standard components (like cameras).

As a result of the reorganization, Nokia’s mobile phone division was split into three parts. The architect behind this was Jorma Ollila, Nokia’s most successful CEO and an extremely popular figure—the man who took the company out of crisis in 1992 and led it to a leading position in the mobile phone market. In 2010, as chairman of the board, he initiated the departure of Ollie-Pekki Kallasvuo. It appears that his success gave him a sense of infallibility, during which he came across a book on holacracy. Consider this a speculative attempt to explain his subsequent managerial mistakes.

Ollila’s overarching strategy was to grant subordinates freedom and trust them without the need to control their decisions. As a result, business unit leaders, such as those in mobile phones and multimedia, were able to hire in their teams whoever they wanted.

It sounds cool and uplifting. In management terms, the accurate word for this is “disorganization.”

And the result, naturally, was the opposite of holacracy’s primary aim—to reduce bureaucracy. The number of managers at all levels ballooned to enormous numbers, and product development channels became clogged. After all, in a well-designed matrix structure, the amount of management increases proportionally with the number of projects. Therefore, it can only be safely implemented on top of a strong line structure.

As a result of managerial reshuffles by Ollila, Nokia transformed from a flexible, mobile, product-oriented company into a giant with an autonomous matrix management structure. The mobile phone division was split into three parts—multimedia, corporate, and telephone—and departments were encouraged to compete for personnel and resources, much like gladiators in a ring.

Previously, Nokia produced very few products with exceptionally high standards. After the reshuffles that took effect on January 1, 2004, an internal scramble began, and the company started to become increasingly bureaucratic. As a result, it became a living illustration of Dilbert comics.

Disorganized project teams tore the company’s business apart like blind maggots on a hamster carcass. Whose—perhaps not the most brilliant—mind once decided to abandon the “outdated” hierarchical system, grant self-management to internal departments, and build an organization based on the “progressive” ideas of holacracy.)))

# The Moral is Simple

1. Do not follow in business any superficially appealing and uplifting ideas promoted by stand-up speakers.
2. Successful managers of the past do not always make sound decisions for the future.
3. When discussing and making decisions about any organizational changes in your company, consult with management consultants. Although, among us, there are also plenty of fans of hype-driven ideas.

Wishing everyone profits and stress-free management!

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