We've hit a new business journalism trend: when Zappos implements something new, we consider it Gospel. Reporters go wild. And suddenly there's a hot new business trend. Such is the case with holacracy, a management technique that removes hierarchy from organizational structure to strengthen communication and remove barriers in an organization. It's not new--but it's new to Zappos. And by journalist creed, that means it's now hot. Or something like that.
Does it work? Sure. In certain organizations. Will it work for Zappos? That remains to be seen. But since it's the buzz word of the month, it's important you understand how it works, the skeptic's point of view and who's using it. This way when the boss comes knocking to see what you think, you'll be right on trend.
1) Holacracy: The Hot Management Trend for 2014 from Mashable
"The advantage of such a structure, Robertson says, is that it "generates organizational clarity." That is, in theory at least, workers are more concerned with the task at hand than trying to look good for the boss. Robertson says he discovered this structure by trial and error while running a software start-up in the early 2000s. Additionally, no one has to be stuck doing one thing all the time. If you're a whiz at programming, for instance, you can make your job 100% about doing that, but you can also spend, say, 10% pursuing an interest, like helping run events or marketing, if you're so inclined.
"No more job titles. No more managers. No more hierarchical decisions. By this time next year, Zappos’s 1,500 workers will be organized into something called a holacracy. Holacracy is a little known organizational management system that’s is gaining a toehold in the business world. Zappos, so far, is its biggest adopter. Holacracy takes its name from the Greek word holos, a single, autonomous, self-sufficient unit, that is, at the same time, dependent on a larger unit. Think of a human cell’s relationship to the entire body."
3) Here's Why Eliminating Titles And Managers At Zappos Probably Won't Work from Business Insider
"The fundamental issue? People just didn't self-regulate as well as the companies had hoped. Teams weren't good at disciplining themselves either. "We're human beings; we just don't do that," Klein says. "We're social beings, and social issues get in the way of logic sometimes." Another challenge was attrition. Companies bled talent as successful managers jumped ship instead of losing their titles. At the same time, poor and mediocre managers that the companies hoped to effectively demote continued to be seen as de facto leaders. What remains particularly unclear in the case of Zappos is how deep the elimination of titles will run."
4) Five Misconceptions About Holacracy® from Medium.com
"Holacracy is so different from how we typically think about organization, so, it comes as no surprise to me that there are some confusing things being said out there. Further, Holacracy makes all rules and roles explicit so that no one has to guess, and everyone can be on the same page. In Holacracy, power is held by roles, not people, and those roles gain power through a governance process, not from a boss delegating it. Holacracy doesn’t dictate exactly how a company should do everything, but rather how it should go about organizing itself and deciding how specific processes work. Holacracy specifies how to decide, not what to decide."
"Can these companies really overcome the “master and servant” paradigm — an arrangement so entrenched that it’s practically synonymous with the workplace itself? Gonzales-Black acknowledges that it may be difficult. “We humans love the idea that we know where the buck stops,” she says. “That’s a perfectly natural inclination to want and to desire.” But she believes holacracy will ultimately win the day."
Susan LaMotte is the founder of exaqueo, a workforce consultancy that helps startups and high-growth companies build their cultures, employer brands and talent strategies. Contact exaqueo to learn more about how we can help you build a workforce that’s aligned with your company culture and develop an employer brand that will allow your business to scale the right way.