Holacracy – the new ‘New’ Thing?

As we will hear over the next few years, a management movement called ‘Holacracy’ (click this link for info on it) will become the new fad or trend for businesses around the world.  My understanding is that Holacracy, or self-management, is basically an organization design where managers and supervisors are eliminated to encourage employees to ‘manage themselves’.  Right now, Zappos is receiving much press attention on their transition as their CEO offered a buyout to employees who didn’t want to make this transition.  Over 14% took advantage of the buyout and left the firm.

Is this anything new?  Yes and no.  Based on my research and review, this is kind of management system has existed in a variety of firms but didn’t have a name for it.(See Lattice Organization structureUnknown)  The closest example I can recall is WL Gore, maker of Gore Tex, where the founder of WL Gore developed his own philosophy in the firm based on his experience at DuPont.  Frustrated by the lack of creativity at DuPont, William Gore developed a organization structure without bosses, small divisions, and empowered work force.  The success of Gore is well noted.  Other firms that appear to have applied similar structure are Google, 3M (it’s famous 80/20 philosophy where employees could spend X amount of time on their own projects) and others.

Will the Holacracy movement take hold in the US?  We shall see.  My thought is that a high percentage of people want bosses to tell them what to do.  Also, based on our small business research, it’s very difficult to install this in an existing organization with many years of institutional history.  Philosophies like holacracy usually succeed in startup situations where routines and policies haven’t been set in stone and much flexibility allows for experimentation and risk taking.  For an existing company, especially larger (say over 500 employees) to succeed at such a new organization design, they typically have to start a new division or company outside the existing one, develop it, then transfer it to the existing organization or keep it in the new organization.  Time will tell.

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