Holacracy (2015) describes a revolutionary new management system championed by some of today’s most forward-thinking companies, like Zappos and Medium. These blinks explain how authority and responsibility are defined and distributed within a Holacracy – and why this system leads to a more effective and dynamic organization.
In a world of fast-changing technology and remarkable innovation, it’s clear that the 21st century is in full swing. But many of today’s businesses still rely on organizational structures and strategies developed in the 19th and 20th centuries. If the rotary telephone is so out of date, why are we still hanging on to old-school management hierarchies?
This question is particularly unsettling when you consider that today’s most common organizational structures were built around the ethos of predict and control, which is completely at odds with the ever-changing post-industrial age.
The predict-and-control paradigm involves people at the very top of an organization developing strategies that are implemented throughout the rest of the company in a trickle-down fashion. Workers have no flexibility to change the centralized strategy – only the very top tier of management has the authority to decide what needs doing and how to do it.
This approach worked during the heavily-industrialized days of the early 20th century, when textile factories and coal mines were ubiquitous and the economy was stable. But today, it just doesn’t make sense: the modern world is a dynamic place, with great competition, constantly changing markets and rapid technological development. Businesses have to be highly flexible, which is simply not possible within a top-down authoritarian structure.
In order to be flexible and agile, organizations have to adopt management systems that harness the power of every human sensor – the people who monitor the business environment and know how to deal with or communicate relevant changes within it. Since each employee, at every level of the company, has a unique role and perspective, they’re privy to vital insights that top managers simply don’t see. And in order to run a truly dynamic 21st century company, it’s crucial to have as much information as possible.
Predict-and-control organizations don’t make this possible. Top-down management structures stifle feedback and input from anyone lower down in the hierarchy. Thus, most companies simply don’t have the capacity to evolve and adapt in today’s dynamic business climate.
Luckily, there’s a new management model that harnesses the power of every human sensor, bringing the organization in line with the modern world. It’s called Holacracy, and we’ll be exploring it in the upcoming blinks.