“A company’s employees are its greatest asset, and your people are your product,” said Virgin founder and CEO Richard Branson. “When a company fails to grasp this simple business tenet, the result is invariably an oppositional ‘us and them’ divide between management and front-line staff.”
This kind of divide grows out of the office politics in many companies with traditional management systems. Holacracy, a new form of modern management created by software developer Brian Robertson, attempts to avoid this divide by allowing workers to make decisions for themselves. In a holacracy, authority is distributed among teams, not concentrated among managers. The holacracy movement is gaining momentum, with companies like online shoe and clothing company Zappos leading the way.
Why Holacracy caught our attention at ST!R
ST!R specializes in employee communications and change management. We advocate giving a stronger voice to employees and believe that doing this in a thoughtful, strategic way leads to better business performance. So we’re intrigued by the holacracy concept. Here’s what we learned.
Holacracy as an organizational system aims to bring out the best in employees. Teams self organize and determine their own purpose. They set their own goals and decide the best way to go about accomplishing them. The expectation is higher productivity than in traditional systems.
Pros and Cons
In holacracies, new ideas can be implemented at a much faster pace. Without managers, progress on a project isn’t halted by a single person’s decision.
However, adopting holacracy isn’t easy. Implementation may take years and has a steep learning curve since it comes with its own lingo and complicated rules. Holacracy also depends heavily on culture fit within the company, which causes problems if certain employees don’t fit in.
In March 2015, Zappos CEO Tony Hsieh gave his employees an ultimatum: Adopt holacracy or leave. According to the online Business Insider magazine, the adoption of holacracy has divided Zappos between those that embrace it and those that resist the change. Some managers are having a hard time relinquishing the power they spent entire careers acquiring.
While the jury’s still out on Zappos, it’s worth noting that the company is forecasting profits of $97 million in 2015, a 78% increase from 2014.
Even if your company doesn’t go whole hog for Holacracy, why not introduce some of its concepts and give more power to teams and employees? Meanwhile, at ST!R we’re watching the Holacracy movement and hoping to learn a whole lot from it.
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