Holacracy, the Latest Management Craze

I have been reading about this latest management fad, holacracy, for some months now, but it was Gregory Ferenstein’s post on July 11 that finally sent me over the edge. For the record, here are two other articles that tee up this management craze. Zappos says goodbye to bosses by Jena McGregor and a more reasoned explanation, published in the Economist, The holes in holacracy.

Also note that the word holacracy is a registered trademark. It is a brand, which always raises red flags in my world regarding its methods. Is it really something new or is the word made up to muddy the already turbid waters in management consulting.

But, I promised to talk about what Tony Hsieh is doing at Zappos and provide a more reasonable context for the structural decisions he is making.

First, “getting rid of bosses.” Boss-ing is something siblings do to each other. Indeed, it is a power struggle. The descriptions of holacracy appear to equate boss with the word manager. I am always amused at where the power lies in the manager-team-member relationship. It is like telling a kid that they have to eat broccoli. But, it is the kid who will determine if broccoli will, in fact, be eaten. Being an effective manager has very little to do with power.

“There are no managers in the classically defined sense. Instead, there are people known as “lead links” who have the ability to assign employees to roles or remove them from them.”

When I look at the “classic definition” of a manager, that person is vested with some very specific authorities. How is this “lead link” different?

  • Determine who is on the team.
  • Determine who is off the team.
  • Set the objective.
  • Assess the team member’s effectiveness in the context of the objective.

“Zappos and Robertson are careful to note that while a holacracy may get rid of traditional managers (those who both manage others’ work and hold the keys to their career success), there is still structure and employees’ work is still watched. Poor performers, Robertson says, stand out.”

So, now I am curious. Just exactly who is it that is doing all the watching if it’s not the manager? Is “lead link” another word for manager?

So, what is all this talk about abolishing managers?

“while the system lacks traditional managers, it does not mean that leaders won’t emerge.”

No shit. Leadership is an observable phenomenon, it happens. And when an organization selects its managers, it had better be paying attention to qualities of managerial leadership (as opposed to political leadership, parental leadership, spiritual leadership).

Apparently, Tony wants to provide the appearance of the absence of managers, by defining broad latitudes of discretion within the various levels of work at Zappos. That is what hierarchy is all about. Hierarchy is not about being the boss, it is not about command and control. Hierarchy is about establishing the boundaries of discretionary judgment within a level of work.

Discretionary judgment is required to make decisions and solve problems appropriate for that level of work. And most teams can handle the problems and decisions that sit within their level of work.

Here’s the pinch. When the problem is difficult or the decision is hard, on the upper end of that level of work, who does the team go to? That would be the manager. Being a manager is NOT about telling people what to do (boss-ing), it is about bringing value to the problem solving and decision making of the team. And that’s the role of the manager. At Zappos, those people exist, and Tony knows exactly who they are. I don’t care what he calls them.

4 thoughts on “Holacracy, the Latest Management Craze

  1. stuart

    Tom, my recollection is that you have always taken the high road, even when you are frustrated and angry. In fact, I’ve often used your columns as an example of how to be effective without being vulgar or insulting. So I was surprised to see your little epithet “No shit.”

  2. Sharon Villines

    It is press release baloney that Holoacracy doesn’t have managers. It just doesn’t have managers that make all the managerial decisions. The role of a person who coordinates and keeps things on track is still in there somewhere. But it isn’t an autocratic hierarchical command structure. The “Holacracy” is a branding of the principles and structure of sociocracy. Some language changes and minor attitudinal changes but functionally the same. Any sociocratic organization could pick up the constitution and use it out of the box with no problems.

    It isn’t a fad. The principles and methods were developed by Gerard Endenburg in the 1970s in his electrical engineering company. For the last 40+ it has been used in an unknown number of corporations, associations, small businesses, schools, etc. There are more everyday. There are certified sociocratic facilitators, trainers, and consultants all over the world. Centers in major countries.

    Many organizations and organizational methods have incorporated the same ideas, but none have the structure for implementation and assured results that sociocracy, and by extension Holacracy has.

    So keep your eyes peeled and don’t believe the press. Sharon Villines, Sociocracy.info

  3. Olivier Compagne

    Hi Tom. I work with HolacracyOne, the company developing Holacracy. I can easily answer or at least clarify several of the questions & concerns you bring up.

    “No manager”?

    Unfortunately, the press being the press, they over-simplify and portray Holacracy quite inaccurately. I’m afraid their choice of words has more to do with the potential for attracting readers than with accuracy. Although there are no “managers” per se in Holacracy, there certainly are leadership functions. These functions are simply distributed: partly into a process, partly into specific roles (among which the “Lead Link”).

    I totally understand and respect your skepticism toward Holacracy; anything new that claims to address many of today’s business problems should be welcomed with a healthy skepticism. On the other hand, I believe healthy skepticism beings with a honest desire to understand before judging. And that requires looking beyond what the press reports. If that’s of interest to you or any of your readers, I recommend starting with this high-level overview: http://holacracy.org/intro

    All the best


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