“Zappos’ focus on core values and culture has done a remarkably good job of getting around the limits of a conventional corporate structure.” .....“Leaders that already understand the limits of conventional structures are the ones that are attracted to Holacracy.”
“Leaders that already understand the limits of conventional structures are the ones that are attracted to Holacracy.”
CEOs who sign on to Holacracy agree to cede some level of power*. The advantage is that they get to view their company through an entirely different lens. But it’s an adjustment for both leaders and employees. Zappos, which has 1,500 employees, will be the largest company to date to implement Holacracy.
* DN: My contention is hierarchical & autocratic power has natural limits anyway.
From a recent Forbes article:
…E-commerce retailers like Zappos to tech companies like Valve (famous for having no bosses) to manufacturers like W.L. Gore (famous for democratically electing its CEO), flat organizations are prospering.“There is a growing body of evidence that shows organizations with flat structures outperform those with more traditional hierarchies in most situations,” wrote Tim Kastelle in the Harvard Business Review.
Flat structures work best when a company’s main point of differentiation is innovation, said Kastelle. They also work well when teams need to be more nimble to respond to a rapidly changing environment, and when the organization has a shared purpose, he added.
…Digital and mobile technologies make it easier for employees to work in a distributed manner, wrote Kastelle.
ANOTHER Forbes article provides a counterpoint, by a former Wall Street Journal writer, is entitled: Gurus Gone Wild: Does Zappos' Reorganization Make Any Sense? He quotes another blogger, William Tincup, who lists 6 problems with Holacracy.
Here are four of them in a nutshell:
- Holacracy seems to be a scheme that’s built for growth, upmarket, happy times
- People that will thrive in this system will be: (1) people that have a problem with authority, (2) people that can consume ambiguity, and (3) independent thinkers and doers. ...They will argue that it’s an efficient system, a lean system, and it will be at the expense of diversity.
- Holacracy [is a] value system. Kind of seems cultish, right?
- How will it scale? Holacracy is a paper napkin idea that might best fit less than 1% of the companies in America.
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