Organizations are the most powerful force of change on the planet — yet they’re held back by outdated operating models. They tend to be haunted by internal politics, strong emotions, infighting and bureaucracy, which slows down the proper and swift development of projects. Meetings can be boring and time consuming, and employees might feel drained and unmotivated. Adding to this, the newest generation of workers, Millenials, find it hard to accept a top-down management. The ‘Just do what I say’ approach to management just seems not to be in tune with our times any more.
What can be done? Shall we cross our arms, and accept organizations as they are, with the not so comforting thought that hierarchy is the only way, since “flat management” alternatives lack the rigor needed to run a business effectively ? I don’t think so. There is a better way and each organization should try to find and experiment with alternatives of organization/management. Over this little guide, we will explore various alternatives of self management, starting with Holacracy.
What is holacracy
Holacracy, a system invented by HolacracyOne, LLC can be one of such alternatives. The system has been going on for one decade now, and it was adopted in for-profit and non-profit organizations in Australia, France, Germany, New Zealand, Switzerland, the United Kingdom, and the United States. Its main strengths are that it brings structure and discipline to a peer-to-peer workplace.
Holacracy stems for holons, a word coined by Arthur Koestler in his book The Ghost in the Machine (1965). A holon is something that is simultaneously a whole and a part. According to Wikipedia, Holacracy is a specific social technology or system of organizational governance in which authority and decision-making are distributed throughout a holarchy of self-organizing teams rather than being vested in a management hierarchy. It is a new “operating system” that instills rapid evolution in the core processes of an organization.
By adopting holacracy, organizations supposedly find:
- Agile organizational structure
- Efficient meeting formats
- More autonomy to teams and individuals
- Unique decision-making process
Some of the core qualities of holacracy are a system of self-organizing (but not self-directed) circles, the use of roles instead of job descriptions, aligning teams around operational needs, in which each member filling a role has a lot of autonomy and authority to make decisions on how to best achieve his or her goals. Holacracy challenges, classic organizational charts are often linear and inflexible, as the system gives people the opportunity to play multiple roles in a company. The following video, gives an overview on the method:
Zappos and Holacracy
Zappos is a company that became somewhat of a symbol for Holacracy. The large online shoe retailer, owned by Amazon, has been using Holacracy since 2013, due to the effort of the company’s CEO, Tony Hsieh. Tony Hsieh decided to implement Holacracy when feeling the inefficiency growing on companies which paradoxically, accompanied growth:
“Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15 percent. But when companies get bigger, innovation or productivity per employee generally goes down. So we’re trying to figure out how to structure Zappos more like a city, and less like a bureaucratic corporation. In a city, people and businesses are self-organizing. We’re trying to do the same thing by switching from a normal hierarchical structure to a system called Holacracy, which enables employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do.”
Zappos journey with Holacracy, if overall extremely positive, hasn’t been an easy one. Very recently, the company began sharing their insights with regards to Holacracy and self-organization on a website, providing other people, with an interest in self-management and self-organized company/organization structures, with tips and info about their successes and struggles.
Is Holacracy truly non hierarchial ?
Not everyone has been happy with Holacracy though. Twitter co-founder Evan Williams’ Medium used Holacracy for several years before abandoning it in 2016. On an interesting blog post, Medium reviews their experience which overall they found very positive, and stated some of their difficulties with the process. These, mostly dealt with coordinating efforts at scale, and holacracy’s somewhat time consuming processes of governance.
Chuck Blakeman, an author who has widely researched self-management, strongly challenges most of Holacracy’s self proclaimed values, pointing out its automated/product oriented approach to self management, by writing:
“Holacracy is a top-down solution (a mgt. tool, not a leadership or self-management tool), imposed on everyone in the organization that defines all human behavior at work. (It is also “owned” and heavily suggests that you buy a consultant and a certain software app to run it — further reducing it’s global appeal.)”
Other people have noted its endless rules, and masculine approach to self-management. The critiques resume my own point of view about the system. Holacracy can be seen as a useful strategy, yes, but only if seen as a tool to be adopted in a fluid, experimental way, that fits the needs of each specific organization.
Part 2 of the guide will be posted tomorrow.