AES's advice process: no rules or approval chains — 40,000 employees decide

Dennis Bakke and Roger Sant founded AES in 1981 with an unusual ambition for an electricity company: they wanted people to have engaging experiences at work every day. That meant power could not sit with a small headquarters staff. AES grew without a conventional hierarchy, without approval chains, and even without functional departments — no corporate marketing division, no human-resources department — while employees organized themselves into small teams responsible for operations and maintenance.

The practice at the center of the model became known as the advice process, a term Bakke coined. Any employee could make any decision — from a plant repair to a large investment — as long as they first asked for advice from everyone affected and from people with relevant expertise. The bigger the decision, the wider the net: peers, other plants, the home office, even the board. After taking that advice, the decision maker acted and bore responsibility for the results. Bakke, as CEO, tried to restrict himself to one significant decision a year.

The experiment scaled: by 1999 the HBR interview with Sant and Bakke described all 40,000 AES employees as truly empowered, and Corporate Rebels later recorded peak revenue around $8 billion with roughly 50,000 employees. Bakke argued the advice process produced decisions at least as good as traditional management, and that it turned everyday work into accelerated, on-the-job education — every decision a real case study with consequences.