For a lot of workers navigating the professional landscape, the traditional organizational model has involved having at least one boss, if not several layers of superiors who trickle high-level information down from the top to the respective areas they oversee.
But the traditional hierarchy has come under scrutiny in recent years, with a new era of business professionals looking to restructure the way companies conduct their day-to-day operations.
Enter Philadelphia entrepreneur Brian Robertson and his creation, holacracy. It’s an organizational structure built on distributed decision making, allowing people to work on things that suit their strengths. Essentially, holacracy relies on self-governance by removing direct supervision and installing democratic “circles” in its place. Employees propose job descriptions for themselves, ratify the roles of colleagues and decide as a group what projects to take on.
Holacracy differs from traditional structures in that it is a departure from a hierarchical or top-down model. But it is not a flat organizational structure, either. A popular choice among large and mid-size companies, flatter organizations open up communication lines for collaboration across levels of the organization with fewer top managers. In flatter organizations, the focus is on employee experience without upending the entire company structure the way holacracy does, making it a more practical, measured approach to organizational change.
Holacracy has its merits, however. Rules and processes govern who makes decisions and the reasons behind them. Roles and accountability are actually more clearly defined than in a traditional hierarchy. Information is accessible across circles and issues are addressed within the organization during ongoing meetings. That said, many still believe that holacracy is best suited to small organizations or larger organizations that are starting out and can implement holacracy as a base operating model.
Organizations that have embraced holacracy include online shoe and clothing retailer Zappos and media platform Medium. Portrayed by media outlets as a “boss-less” structure, holacracy has seen mixed reviews.
Employee engagement is notably low in a holacratic system, due to the fact that managers account for 70% of employee engagement, according to research from Gallup. Managers, as it turns out, are key players when it comes to inspiring high levels of performance from employees.
Additionally, expectations are often less clear in a work environment without managers. Research shows that clear expectations are integral to an engaged workplace. Managers help provide accountability and communication within an organization. Without them, employee satisfaction dwindles.
For Zappos, the downsides of not having managers are found everywhere. Following the implementation of holacracy, 14% of the company’s employees left within a matter of weeks. Remaining employees have questioned the effectiveness of this approach and even referred to its introduction to the company as “painful,” according to Gallup.
In the end, the workplace of the future may appear flatter, but the notion of holacracy taking over as the new philosophy of big business appears misguided. Research shows that managers are needed at companies and wanted by employees. While some aspects of the traditional business hierarchy are disappearing, others seem to be staying right where they are.