No boss, no problem? Some people think so. Some people don’t.
Several companies, including Zappos and W.L. Gore, have made the news for going against the traditional corporate hierarchy and adopting alternative management techniques.
Online shoe retailer Zappos recently instituted a controversial management structure called holacracy. Holacracy eliminates corporate hierarchy -- and traditional bosses -- in favor of self-management. Meanwhile, W.L. Gore, makers of Gore-Tex, empowers employees to go directly to anyone in the organization to get what they need to complete a project.
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Holacracy in theory
Today’s modern workplace is a new frontier. Gone are hierarchies and a command-and-control approach in favor of a sense-and-respond leadership style based on listening and asking the right questions. Holacracy, according to holacracy.org, is defined as a “comprehensive practice for structuring, governing and running an organization that removes power from a management hierarchy and distributes it across clear roles, which can then be executed autonomously without a micromanaging boss."
The leadership practice derives its name from holarchy, a term coined by writer Arthur Koestler in his 1967 philosophical psychology book, The Ghost in the Machine. The term refers to a collection of holons, which simultaneously function as parts and wholes, similar to organs in a body. Theholacracy we know today is the brainchild of Brian J. Robertson, a former programmer and entrepreneur turned management guru. As he was building the software company he founded in 2001, he realized the management-hierarchy model wasn’t agile. He developed holacracy in 2007 as a result.
Holacracy in action
Holacracy, once implemented by an organization, contributes to workplace transparency. A holacracy is intended to tap the collective intelligence of employees, to increase transparency and democracy within the workplace.
Zappos, which has more than 1,000 employees, is by far the largest company to try operating as a holacracy. The online retailer began its transition to holacracy in 2013. Company CEO Tony Hsieh was quoted as saying: “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.”
This is the challenge that faces companies adopting holacratic principles. While holacracy is ideal for flexible, non-bureaucratic work environments, making it work for everyone -- including those who need structure to be productive -- is far from easy.
How does a company begin to implement holacracy? Generally, there are four basic components of holacracy:
1. Anchor circle: This typically comprises the company’s board.
2. General company circle (GCC): The GCC encompasses the traditional executive leadership of the company. The GCC is the only sub-circle within the anchor circle.
3. Sub-circle: Sub-circles are dedicated to specific functions within a company, such as marketing or production.
4. Roles: These are elements of a traditional job broken down into a task. Every role contains agreed-upon accountabilities. Also, a role is not necessarily representative of a person. One employee can have many roles, and roles can change at any time.
Now that we’ve defined the basic holacratic structure, another question emerges: How do all of these different circles communicate, update one another and make decisions? There are structured meetings within a holacracy: Governance meetings (monthly) refine a circle’s operating structure and address administrative issues, tactical meetings (weekly) allow circle members to address issues and share progress, and strategy meetings (every six months) allow participants to develop long-term goals.
Related: Zappos Gives Job Titles the Boot
Holacracy isn’t the only alternative leadership style that aims to distribute power evenly among employees. While these anti-hierarchy management models aren’t new, they do seem to be making a comeback.
The flat structure organization is basically a horizontal chart that gives employees the freedom to work with each other without any specific hierarchy. Unlike a holacracy, the flat structure does not come with specific guidelines. The system does not reward employees who seek to climb the vertical corporate ladder. Instead, workers are encouraged to become horizontal experts within a specific area.
Meanwhile, the lattice management structure is a non-hierarchical system based on interconnection among workers that is free from bosses or managers. W.L. Gore (Gore-Tex products) represents the lattice structure. A Gore employee is responsible for managing his or herself and is accountable to others on the team. W.L. Gore, founded in 1958, has always been a team-based flat lattice organization that fosters personal initiative. There are no organizational charts or chains of command at the company. “Instead, we communicate directly with each other and are accountable to fellow members of our multi-disciplined teams. We encourage hands-on innovation, involving those closest to a project in decision-making” (source: Gore.com).
Things to consider when reviewing your management structure
Holacratic-type organizations, even with their flat structures and transparent communication styles, still face operational challenges. Holacracy, for example, doesn’t account for workplace basics such as compensation management systems or hiring / interviewing process. Zappos, in fact, is still figuring out how compensation will work for the company. The organization has experimented with HolacracyOne’s Badge-based Comp App, which assigns skills and capacities to badges, which have monetary value. Also, holacracy comes with an adjustment curve, with some employees struggling to adapt to its nuances.
However, despite potential holacratic hurdles, organizations may try an evenly distributed authority alternative approach to management. How will these companies collaborate effectively -- both leaders-to-employees and employees-to-employees within these non-traditional workplaces?
Collaboration can eliminate many of the tactical status meetings within the holacratic or flat management models. New Clarizen/Harris Poll survey research indicates that employed Americans spend an average of 4.6 hours each week preparing for status meetings and 4.5 hours attending general status meetings. That’s a lot of time that can be re-directed toward strategy and innovation.
Even hierarchical companies with traditional management structures can benefit from holacractic principles of collaboration, with distributed teams gathering to share information and solve a problem or employees at all levels contributing to one common project before disbanding.
The ultimate goal for all modern workplaces -- holacratic or otherwise -- should be company-wide collaboration, accountability and transparency, meaning workers maximize the time spent completing meaningful work within the democratic workplace.