Holacracy — Different Management Concept: Imagine– No Titles, No Managers, No Hierarchy, No Boss… Fad or Future…

Holacracy® is a management concept that ditches all traditional ways we look at ‘work’– no job titles, no managers, no organization hierarchy, even no boss… Holacracy® is a total transformation for structuring, governing, running… an organization… and a new way of achieving control by distributing power… it replaces traditional top-down management…

According to Brian Robertson; Holacracy® is management based on the tasks a company needs to accomplish, rather than a standard reporting structure… It’s sort of like a game, e.g.; there are rules, workers are responsible for their own tasks, and there is no micro-management… also, no one has to be stuck doing the same task all the time… it generates organizational clarity… it’s adaptable, quick changing both for work that needs to be done, as well as, how work is being fulfilled…

For some Holacracy® spells end of traditional management, as we know it. But for others, the concept is complete insanity…

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According to Martin Newman; I struggle to see this as a panacea. I see how balance needs to be struck between formal and informal leadership, and greater use of distributed leadership. But, much of Holacracy does not make sense… good managers and leaders know that they simply must talk to people and not defer to a management model that says, they don’t exist. Clearly traditional leaders must adopt and change from managing people to empowering people…

But, leaders (how every defined) are still needed to be responsible for the entire company… also, the role of an enlightened leader is not to dictate; how, when, where… people do their work… but to distribute the power of leadership… It’s a huge cultural shift and it relies on trust– delegating power, joint decision-making, shared sense of purpose… these are the things we’re seeing and discussed more in the workplace… Seen this way, then Holacracy type management does makes a lot more sense…

Who’s in Charge? Is Holacracy® workable model for organizations– The idea of self-directed or self-managed teams is not new… In the mid 80s, a number of manufacturing companies instituted a similar flat hierarchy under belief that workers would be more productive if they were empowered through greater autonomy. A number of large, multi-national companies, such as; Shell, Cummins… adopted the method for a short time, but it failed…

The adoption of a Holacracy type concept saw an exodus of many senior management talents, and companies soon realized that experienced managers would rather leave the company than lose their titles. In fact, according to Jan Klein; the experiment was doomed from the start… people just don’t self-regulate as well as the companies had hoped… Teams are not good at self-disciplining themselves…

Only one company made Holocracy last long-term; it was a small, rural factory where everyone knew everyone. It was, in essence, an extended family business model supported by a strong community foundation… There is something intriguing about the notion of truly democratic business culture. But, hard to imagine corporate leadership embracing an idea that essentially eliminate their authority…

According to Sanjay Srivastava; people are social animals who travel in packs and care about two things: First, who is dominant? Second, who likes them? They say humans subconsciously rely on visible cues like attractive physical features or extroverted personalities to assign status in a group, which has no labels to indicate otherwise… In a company devoid of bosses, these perceptions of status will take hold to establish a pecking order… Add, the fact that people naturally strive to attain higher status in the form of admiration, respect… from peers and those perceived as more powerful.

In Holacracy®, people’s instinctive inclination to climb up the ranks at work finds no reward when there is no boss to offer feedback or pat on the back… That’s because status is as important to us as breathing… Research shows that perceptions of social status– of ourselves and others– and our overall standing in social hierarchies affect how we make decisions, how altruistic we are, as well as, our overall mental and physical health…  Some workers will therefore naturally converge around a perceived leader, leaving others feeling insecure. Since our brains are hardwired to tune in to threats over rewards, people tend to act more defensively when they feel their status is at stake…

In Holacracy® the titles disappear, but human dynamics won’t. In an environment where everyone is leader, some other mechanism needs to be put in place to ensure that everyone can maintain and optimize the tenets of fairness, trust, transparency… so the entire organization can move forward…

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In the article Should Your Business Embrace Holacracy®? by openview writes: What is Holacracy, exactly? And, is it right for your company? Imagine walking in to work one day to discover that you no longer had a boss or manager to report to. Instead, you are your own boss, and you work in self-organized teams– rather than hierarchy squad of managers, executives… in addition, now you are also responsible for influencing the company’s purpose…

Sound a little far-fetched or utopic? At Zappos, a company that employs about 1,500 people, this management approach is reality and it’s got a name; Holacracy®. According to John Bunch; one of the core principles of Holacracy® is people taking accountability for their work, and it’s not leaderless– there are people who hold a bigger scope of purpose for the organization than others– but, leadership is distributed into each role– everyone is expected to lead and be an entrepreneur in their own roles…

At a high level, Holacracy® is about authority, leadership… In a holacratic environment, no one has the power to tell anyone else what to do, and there are no organization chart that dictates specific responsibilities for each role in the company… Instead, authority is distributed among all members and meetings are held to establish responsibilities and focus on company’s key issues… Although while stripping a company of all management structure might sound like perfect way to induce uncontrollable chaos; Holacracy’s  supporters suggest that it often has opposite effect…

Ultimately, there are a few key arguments in favor of holacratic structure, e.g.; gives everyone a voice… brings clarity… highly adjustable, adaptable… Yes, there are plenty of potential pitfalls, for example; without any one person, i.e., the boss, truly in charge of the organization… how exactly will a growing company deal with the inevitable business challenges, e.g.; scaling, risk, hiring, firing, corporate governance, financial matters…

According to William Tincup; Holacracy has a few potential issues with that might prevent it from being effective in large organizations, e.g.; size and complexity… retaining talent… corporate governance… transition from hierarchic to holacratic… While Holacracy has been around for a few years, there are good reasons why few large corporations have adopted it…

The reality is that it’s virtually impossible to determine with certainty whether Holacracy® will work in a company until you actually try it. And while it might be a wildly successful transition that makes the company significantly more streamlined, innovative, and efficient, it could also send the company down a slippery slope…

In the article Making Sense Of Holacracy by Steve Denning writes: Holacracy® is essentially a set of inward-looking hierarchical mechanisms… Each is required to be run democratic and open, with exhaustively detailed procedures on how things like– meetings are to be managed, how decisions are to be made… But more important, the word ‘customer’ or a reference to any feedback mechanism from customers don’t appear even once in the Holacracy® Constitution

In addition, there may be no one person with the formal title of ‘manager’, but certainly there are ‘roles’ that are in every respect– managers, except for the formal title of ‘manager’. The fact that the accountability of the role is changed in accordance with governing rules, does not make him or her any less of a manager, in the normal sense of that word…

In fact the responsibility of the ‘core roles’ are spelled out in exhaustive detail…  And, to suggest that there are no managers is absurd… Notice that in the media the hue and cry  about Holacracy is: Whatever happened to the managers? But, the more pertinent question should be: Whatever happened to the customer?

There are no explicit feedback mechanisms from the customer, i.e. the people for whom the work is being done… When so much time and effort is spent on the micro-details of the internal decision-making mechanisms and absolutely no attention given to external feedback mechanisms, one could easily get the idea that internal mechanisms are supremely important, while the customer is irrelevant.

Unless and until this ‘gap’ is rectified, Holacracy® risks being a distraction from the central business challenge, namely– how to make organizations better able to add value to customers through continuous innovation… Nevertheless, even in firms having intense, even obsessive, focus on adding value to customers, something along lines of Holacracy® has possibilities…

Holacracy offers one approach to revolutionizing the process of management– it’s democratic, but it’s heavy… For most organizations, particularly large organizations, the important issues are growth, profitability… delighting customers through  innovation… and not, in most cases, its internal administrivia… Hence, Holacracy® in current form is not very helpful; but, this is not to say that it cannot evolve to become more useful…

In the article Holes in Holacracy® by The Economist writes: Every so often a company emerges from herd to be lauded as embodiment of leading-edge management thinking: Think of Toyota and its lean manufacturing system, or GE and its Six Sigma excellence… The latest candidate for apotheosis is Zappos (owned by Amazon) that believes that happy workers breed happy customers. Tony Hsieh, its boss, said that he is turning the company into a Holacracy… and replacing its current hierarchy with more democratic system of overlapping, self-organizing teams. Until Zappos embraced it, no large company had taken Holacracy seriously…

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According to Julian Birkinshaw; nine-tenths of the approximately 100 branded management ideas I’ve studied lost their popularity within a decade or so… Among the latest cast-offs, it seems, is– Google’s much admired– 20% time, in which workers got a day a week to work on their own projects; the company is reported to be quietly side-lining it… Other, generally more timid, forms of democratic decision-making are being tried at long-established technology companies, whose bosses worry that their rigid hierarchies put them at a disadvantage to nimbler, less regimented young rivals…

Some management experts regard the whole idea of stripping away hierarchy as wishful thinking… According to Jeffrey Pfeffer; hierarchy is a fundamental principle of all organisational systems... According to Evan Williams; it’s not about discarding hierarchy altogether as making it more fluid… This type of management seems to work fine for smaller companies, e.g.; companies that relatively small, fast-growing, full of creative people who shun a more conformist workplace…

According to Stephanie Taylor Christensen; the goal of Holacracy is to produce results through complete transparency and realistic alignment of roles and responsibilities. For small-businesses owners, making everyone on the payroll accountable for the company’s success may in fact be the structure’s most appealing aspect… Because employees can hold varying degrees of responsibility in any number of circles in Holacracy– and those circles change, evolve with business needs at any given time– Holacracy may be the answer to maximizing the productivity of teams, particularly as business needs ebb and flow…

However, people must be willing to share power, this management style leaves no room for an- I’m the boss- mentality, despite the fact that they may be the most financially vested person in the business… every employee is essentially an owner of the business, and they are empowered to make real contributions to the business.

Because they’re encouraged to put their creativity and skills to use to solve problems and seek ways to constantly improve existing processes (even beyond scope of what they were technically ‘hired’ to do), as well as finding greater fulfillment in their jobs… But is Holacracy® really worth the total disruption of an organization? Well, it just depends…