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Holacracy: The Rise of Modern Management

Maite Barón, CEO of consultancy firm The Corporate Escape, believes that to survive in an ever-faster business world, it’s imperative to create a new business and organisational DNA

It’s not always easy to see where inefficiencies lie in a business, particularly so where there’s a traditional hierarchy that leads from the CEO down.

Here, information flow is pretty much all one way. So those who know where the problems lie and frequently hold the answers to them – those ‘who do the work’ – rarely get the chance to feed that knowledge upward to their bosses. Even more rarely are they empowered to solve the problems by making the changes that are needed.

So opportunities that could be grasped to improve or make a company or organisation more entrepreneurial and agile are usually lost.

That’s particularly relevant these days, when fast decision-making is needed as companies and organisations must reshape themselves to cope with the ever-changing business environment in which they operate.

Poor productivity, and increasing unhappiness, stress and burnout at work are all signs that traditional hierarchical management structures with linear chains of command, are struggling to keep pace with a rapidly shifting business environment. According to the Chartered Institute of Personnel and Development, in the UK 42% of companies have seen an increase in stress-related absence in 2013, showing that employees are failing to take the strain.

So is there a better way of working? Proponents of ‘holacracy’ would say there is. Knowing that this organisational management system takes its name from the Greek word ‘holos’ – a single autonomous unit, self-sufficient but also reliant on something larger – gives an immediate insight into what it’s all about. Think of the cells in our bodies and you’ll get a reasonable feel for what a holacratic organisation looks like. In an ‘holacracy’, there is no standard chain of command, since everyone within it becomes in effect their own leader, empowered to make decisions focused on outcomes rather than jobs or departments.

It’s this ‘distributed authority’ that makes decision-making faster. It’s like having a company filled with entrepreneurs, all of whom are bringing knowledge and effort to making the task or project in hand as successful as possible.

Though still in its infancy – it was only distilled into a system of management in 2007 – holacracy has found favour with a number of innovative companies looking to find a more effective way of doing business.

Latest and most high-profile recruit to the camp is online shoe and clothing supplier Zappos, led by its innovative CEO and ‘happiness purveyor’ Tony Hsieh. If all goes to plan, by the end of this year the company will have consigned its old management structure to the bin and embraced a new holacratic way of working.

Gone will be job titles. There will be no more managers or top down decision making. Instead, the organisation’s 1,500 staff will each become an ‘entrepreneur’, responsible for delivering their own pieces of ‘purpose-driven’ work, all with larger shared and common goals that serve the greater good of the organisation and its customers.

According to other companies that have already taken the system on board, such as the David Allen Corporation (whose productivity system Getting Things Done is used by millions), without a hierarchical structure there’s less room for the politics that go with job titles, and so fewer turf wars to create inefficiencies. 

There’s also a more natural flow of work through the business. No longer are there ‘artificial fault lines’ between departments to separate work, knowledge and decisions. Instead there are ‘value streams’, at the end of which are customers or clients who enjoy better service as a result.

Of course, holacracy is heretical to many who will find conforming to its alien ways of working difficult, if not impossible - old ways have to be unlearned and others substituted before you can embrace the benefits. And while holacracy isn’t the only way forward, more and more forward- thinking companies realise that given the fast shifting sands of today’s business world, they will have to make changes to their very DNA.

At The Corporate Escape™ we help prepare professionals for success in that future world, whether it’s within their current organisation or outside it, perhaps as a New Entrepreneur. So start opening up your mind to what’s possible by downloading our free guide ‘7.5 Strategies to Thrive in Your Career or Business’. Be confident, there are plenty of opportunities that are out there waiting for you … when you know where and how to look.

Maite Barón is CEO of consultancy firm The Corporate Escape™

Sources: Absence Management Annual Survey 


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