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Non-hierarchical management system

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Very interesting development, reported by Rebecca Greenfield in Fast Company:

Zappos CEO Tony Hsieh offered his nearly 4,000 employees an ultimatum last week: accept Holacracy or leave.

While the word may conjure images of a new-age cult, Holacracy is an alternative organizational structure that has been adopted by companies around the world—including Medium, the alt-publishing platform from Twitter cofounder Ev Williams, and the David Allen Company, the productivity consultants. It sheds traditional hierarchies for self-governing teams that get work done through tactical meetings. Zappos is the largest company to have adopted the system, and the transition hasn’t been entirely smooth. By multiple reports and now an admission in an internal memo, first posted by Quartz and obtained by Fast Company, people don’t love the idea of relinquishing their manager titles.

Nevertheless, Hsieh is anxious to fully embrace Holacracy, and is going all-in on the new structure by offering three months severance to people who don’t want to adapt. “We’ve been operating partially under Holacracy and partially under the legacy management hierarchy in parallel for over a year now,” Hsieh writes in the memo. “Having one foot in one world while having the other foot in the other world has slowed down our transformation towards self-management and self-organization.”

Adopting Holacracy isn’t cheap or easy. The system has its own set of rules and lingo, and is complicated to implement. The Holacracy parent company, HolacracyOne, helps companies transition by offering consulting services that run from $50,000 to $500,000, depending on how long it takes to achieve self-sufficiency. Even for much smaller companies, like Medium, which implemented Holacracy when it was just a couple dozen people in 2012, the journey takes multiple years and has a steep learning curve.

Holacracy was invented by Brian Robertson, a 35-year-old former programmer with barely any management experience. He created Holacracy in 2007 because he had a “burning sense that there has to be a better way to work together,” he said in an interview with Fast Company. Robertson, who describes himself as a coding savant, says he taught himself to program at age 6. By the time he was 13, he says he was charging $25 an hour for software development through the Sierra Network, an early competitor to AOL. “They had no idea how old I was” Robertson said. “I didn’t even know enough to name my business.”

After dropping out of the Stevens Institute of Technology, 17-year-old Robertson managed to get a job at Analytical Graphics, an aerospace company known for its perk-laced work culture. “You couldn’t beat the benefits, the environment, the culture. From a conventional view, they were really cool” he said. They had free meals, a gym, and a game room. Robertson had a great boss, who he still considers a friend and mentor. Analytical Graphics even won an award for being one of the best small companies to work for in the U.S. by the Great Place to Work Institute.

Robertson hated it.

“The bureaucracy seemed to be set up in a way that people couldn’t use their gifts, their talents,” Robertson said. In 2001, he started his own company to figure out a better way to run one.

Robertson certainly isn’t alone in his disdain for top-down order. Holacracy comes out of and operates within a milieu of unconventional ways to work that have become more popular in the last decade as younger and more visionary CEOs eschew tradition and seek out a new way of working. Among the options are sociocracy, Freedom at Work, the Morning Star Self Management System, and the Results Only Work Environment (ROWE). Each of those systems, including Holacracy, has a distinct approach to the same general problem. “The industrial age operating system is no longer compatible,” said Traci Fenton, the founder and CEO of WorldBlu, which preaches the Freedom at Work method used by hundreds of companies worldwide, including Zappos before it adopted Holacracy. “You have to move into the new age to realize we’ve outgrown the clothes.”

The hierarchical organization dates back to the industrial revolution, when companies wanted to preserve accountability while employing large numbers of people. . .

Continue reading. A sidebar to the article defines some terms:

A HOLACRACY DICTIONARY

Circle: In a Holacracy, people work within circles that represent different aspects of a company’s work.

Role: A job with a specific mandate within a circle. The person who empowers a given role has autonomy over that domain.

Governance: A regimented meeting where the structure of the organization—circles, roles—is decided. These can happen as often as an organization thinks is necessary.

Tactical Meeting: A replacement for weekly team meetings, during which circle members “process tensions” until they’re resolved.

Tension: “Dissonance between what is (current reality) and what could be (the purpose).” In other words: the problem someone has with the work.

Tension Processing: Each person talks out his problem with the group until he who raised the tension is satisfied with a next step.

Written by LeisureGuy

30 March 2015 at 2:00 pm

Posted in Business

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