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Holacracy: not safe enough to try — Medium

Holacracy: not safe enough to try — Medium | Change Leadership Watch | Scoop.it

Holacracy exclusively focuses on internal processes and keeps the organization busy with organizing itself.

We completely got caught up with implementing and learning how to function in and operating with Holacracy. The system is ridiculously complicated without reason, and very challenging to learn.

Deb Nystrom, REVELN's insight:

A story about why holacracy did not work and may not be worth trying in your organization.

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Championing a Radical Old Way of Doing New Global Business: High Profits & Low Power Centric Culture

Championing a Radical Old Way of Doing New Global Business:  High Profits &  Low Power Centric Culture | Change Leadership Watch | Scoop.it

Svenska Handelsbanken has championed an entirely different way of doing business, and has the profits, loyalty and longevity to prove that it works.

Three years ago, stock market analysts at Sweden’s main business paper set about using data from the London School of Business to find the world’s best performing share since the start of the 20th century.

The answer? Handelsbanken. Ten pounds invested in the Swedish bank in 1900 would have been worth about £20m by 2009, a rise of 1.9m pc. General Electric could manage only an 843,000pc rise.
 

And if you think the fruits of this astonishing return were limited to an elite club at the bank, you would be wrong.

Handelsbanken has an almost religious devotion to Oktogonen, its profit-sharing scheme. ...Every employee receives an equal share of the bank’s profits as long as it makes a return on equity greater than the average of its peer group.

   

__________________
   
..branches ....scrutinise [head office] costs. If they are not happy...they make sure the head office ups their game...

     
__________________

      

The money is then used to buy Handelsbanken shares for each staff member but these can be accessed only when employees reach the age of 60. This ultra-equitable approach means the bank teller whose career is spent cashing cheques will receive the same payout from Handelsbanken on retirement as its chief executive.


Afew other differences:


- It does not pay bonuses, with the exception of a small number of staff in its investment banking arm;
 

- It has no financial plans;
 

- The bank sets no sales targets for staff;
 

- It does not set out long-term goals and has no central marketing budget;
 

- Even its largest corporate customers must still bank with it at a branch level, and it has no credit scoring system.
 

...Anders Bouvin, UK chief executive explains....branches decide the costs of the head office. They scrutinise our costs. If they are not happy with the service, they make sure the head office ups their game...[or]...go elsewhere. The branch manager is the king of the bank,” he says.


Read the full post here.   Read more about the unusual 28 year career of Anders Bouvin, here.

   

Related tools & posts by Deb:

    

  • Stay in touch with Best of the Best news, taken from Deb's  NINE multi-gold award winning curation streams from @Deb Nystrom, REVELN delivered once a month via email, available for free here, via REVELN Tools.
     
Deb Nystrom, REVELN's insight:

This is a companion article, featuring the graphic shared by Niels Pflaeging on LinkedIn who mentions that  ...."companies like Handelsbanken have ....value creation and informal structures [that] are far more well-curated and developed than in command-and-control organizations."

~  Deb 

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Deb Nystrom, REVELN's curator insight, February 18, 2014 8:11 PM

Sometimes numbers can be a trap.   This is one of two posts featuring this unique, profitable bank that has outperformed MANY competitors.  ~  Deb

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Zappos is going Holacratic: No Job Titles, No Managers, No Hierarchy

Zappos is going Holacratic: No Job Titles, No Managers, No Hierarchy | Change Leadership Watch | Scoop.it

“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.


Related posts & tools by Deb:


      

            

         

Deb Nystrom, REVELN's insight:

Zappos is known for its zany corporate culture based on 10 core values, innovative/ alternative work environment, and for legendary customer service.  Now Zappos may become known for breaking the hierarchy barriers to how innovative companies are structured and function.  We'll soon find out if it will scale in the bigger organization that is Zappos.


Flatter, social circle organization seems fully in line with the 10 core values of Zappos.  Overall, their great success can has been attributed to many things, incuding a clear, compelling vision of who and what they are and are not, including "It’s Not about Shoes." 

  • "Zappos is a customer service company that just happens to sell shoes.” -Tony Hsieh


In the same way, Coca-Cola is about entertainment, not sugar-water. Zappos now has legendary customer service stories included in books - such as the one about delivering flowers to a customer whose mom passed away.  Another one is about a Zappos rep talking to a customer for over 8 hours (a record that now has been broken.)


As an example, General Motors has adopted a teams approach in some of its plants, yet moves slowly as large multi-national.  Enter the new team oriented, from the ranks GM CEO Mary Barra.  The times, they are a changing!

Zappos has none of the history of hierarchy and the silo creating 1920's scientific management connected older manufacturing practices, to hold it back.


Welcome to a new view of leadership, 2014 style.  Now, we'll see if it will scale.    ~  D

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Kudos's curator insight, January 11, 2014 4:36 PM

An interesting experiment. The fine line between madness and genious. Can people handle it. Time will tell. 

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Top Reasons Cultural Transformations Fail, Leadership Behaviors & Supporting New Structure

Top Reasons Cultural Transformations Fail, Leadership Behaviors & Supporting New Structure | Change Leadership Watch | Scoop.it

"Managers’ leadership behaviors & operational decisions get to the root of the problem with failing change efforts including cultural transformations."


“…studies show that upper management is only aware of about 4% of all the problems...”


From a post today by Graham Garrison:

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  • “…studies show that upper management is only aware of about 4% of all the problems in the workplace while those on the bottom rung are aware of 100%.

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  • “A huge factor is engaging managers and frontline workers before changes are implemented. The frontlines know what is working and what isn’t; get their perspective and making them a part of the change.”

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In change, it's getting both the leadership & management behaviors & actions to aligned realization, reference Daryl Conner (Managing at the Speed of Change) and his Commitment Curve.  Garrision highlights:

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  • Our experience is BOTH leadership and management are needed. 
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  • Focusing on the “soft” side of culture, such as purposeful connections to the heart, an energizing vision, engaging through core values, or strengthening leadership behaviors are vital. 

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  • [They must be] backed up by realigning operational processes and shifting key support systems 

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  • Otherwise you'll end up with "highly motivated people who come to feel manipulated and powerless against 'the bureaucracy.'"
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It is in the tactical and operational structures of IT, metrics/measurement, org structure and HR  (compensation, what gets people hired, fired, and promoted) where leadership & manager values become "rhetoric or reality," says Garrison.

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Culture Eats Strategy for Breakfast | Katzenbach Foresight, Booz & Co.

Culture Eats Strategy for Breakfast | Katzenbach Foresight, Booz & Co. | Change Leadership Watch | Scoop.it

The “Culture Eats Strategy for Breakfast” webinar delivered on December 6, 2011, shares what Jon Katzenbach and Booz & Co. believe is the right approach for strategic success (Capabilities-Driven Strategy), why strong cultural support is essential, and how to work with and within your culture to execute your strategy. 

Jon Katzenbach is the author of the strategy+business article "Stop Blaming your Culture," and is featured on the video & in the webinar slides at this site.


The link also connects to the Foresight newsletter featuring:


  • Booz & Company’s seventh annual study of the world’s 1,000 largest corporate R&D spenders focuses on the ways strategic alignment and corporate culture facilitate innovation, and
  • How can you balance the logic of the formal with the magic of the informal?   The formal organization consists of analyses, strategies, structures, processes, and programs, all codified in memos and charts—tools that align decisions and actions.  The informal organization consists of emerging ideas, social networks, working norms, values, peer relationships, and communities of common interest—elements that are often hidden. It is in the informal world where magic happens. However, neither of the two organizations is likely to sustain peak performance without the other. 




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Toyota's Relational Contracts and the Decline of General Motors — HBS Working Knowledge

Toyota's Relational Contracts and the Decline of General Motors — HBS Working Knowledge | Change Leadership Watch | Scoop.it
What led to General Motors' decline? Long regarded as one of the best managed and most successful firms in the world, its share of the US market fell from 62.6 to 19.8 percent between 1980 and 2009, and in 2009 the firm went bankrupt.


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Toyota's practices were rooted in ...effective relational contracts-- ...based on subjective measures of performance ...enforced by the shadow of the future. 

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The authors argue that the conventional explanations for GM's decline are seriously incomplete...and make the case that one of the reasons that GM began to struggle was because rival Toyota's practices were rooted in the widespread deployment of effective relational contracts-- agreements based on subjective measures of performance that could neither be fully specified beforehand nor verified after the fact and that were thus enforced by the shadow of the future.

GM's history, organizational structure, and managerial practices made it very difficult to maintain these kinds of agreements either within the firm or between the firm and its suppliers.

...Two aspects of GM's experience seem common to a wide range of firms.

First, past success often led to extended periods of denial: Indeed a pattern of denial following extended success appears to be a worldwide phenomenon.

Second, many large American manufacturers had difficulty adopting the bundle of practices pioneered by firms like Toyota. 
   
See a companion piece, also referencing GM in Deb's comments in Change Management Resources ScoopIt newsletter:  

Moving Beyond Hierarchy - What is Working Now to Lead Through Change?

 

Deb Nystrom, REVELN's insight:

Denial of change after a long success, and failure to adapt to the new?  The cited Harvard working paper by Susan Helper and Rebecca Henderson gives implications of GM's history in looking at efforts to revive American manufacturing.   

It may not be news, yet it may be a good reminder to anyone under 50 employed by a legacy company like GM based on years of success, followed by decline.  


By the way, I'll be presenting with Ron Koller at the Michigan Labor Management Association conference on April 10, 2014 

Michigan: What’s in it for Me? “Why WE Makes Sense”
The Michigan Labor Management Association (MLMA) Partners in Progress Conference
Kellogg Conference Center

More information is here on my speaking events page.  


~  Deb    
 

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Smart profits, smart values and sustainability from a bank boss who dares to be different

Smart profits, smart values and sustainability from a bank boss who dares to be different | Change Leadership Watch | Scoop.it

Anders Bouvin is the boss of the most successful bank you've probably never heard of. And he, like the bank he runs, will challenge your preconceptions.   

    

For starters, this African-born, Swedish chief executive of Handelsbanken's growing UK operation doesn't receive an annual bonus, ...[and] has been with the Swedish bank for 28 years.

    

Most surprisingly, the 55-year-old supports west London's Queens Park Rangers Football Club with a passion intriguing for a Swede who spent the first 10 years of his life growing up in Zimbabwe.

   

….Anders Bouvin…was thrilled to be offered a job…in a company "whose values coincided completely with my own".

    

Those values - long-term-ism, and a philosophy of de-centralization encapsulated in the slogan "the branch is the bank" - seem almost too good to be true in a current banking era of fines, debt crises and outsourced customer service.

  

Big banks, according to the popular narrative, were the primary causers of the global debt crisis thanks to their reckless investment in high-risk mortgage-backed bonds.

    

Handelsbanken says its branches, such as this one in Aberdeen, come first


But Handelsbanken remained above the fray, emerging with a balance sheet strong enough to make European banking regulators purr with delight.


…next to no marketing keeps overheads down and return on equity up.

     

At Handelsbanken returning a share of the profits to long-term staff is also key. If the bank exceeds the average profitability rate of its peers, then surplus profits are put into a fund and distributed to all the staff.

    

Handelsbanken
*  Founded in 1871
*  Has no sales or market-share targets
*  Staff get flat salaries without bonuses
*  Claims to have achieved higher profitability than the average of its rivals for 41 years in a row


...Handelsbanken, headquarter[ed] in London, is expanding to meet increased demand while some of its larger rivals get smaller.


"Many banks are having to absorb huge losses and have had to shrink to repair their balance sheets... and there are clear indications that SMEs [small and medium-sized businesses] are bearing the brunt of this. It's very sad."


All in all, Anders Bouvin appears the least likely candidate for executive burnout you'll ever meet.

Related tools & posts by Deb:

     

    

  • Stay in touch with Best of the Best news, taken from Deb's  NINE multi-gold award winning curation streams from @Deb Nystrom, REVELN delivered once a month via email, available for free here, via REVELN Tools.

 

Deb Nystrom, REVELN's insight:

This is yet another positive example of how smart, people-centered values, with decision-making driven down the chain and low hierarchy, can drive profitability and sustainability, even in one of the most traditional industries. More information on comparisons with other business models to follow. ~ Deb


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Deb Nystrom, REVELN's curator insight, February 26, 2014 3:02 PM

This is yet another positive example of how smart, people-centered values, with decision-making driven down the chain and low hierarchy, can drive profitability and sustainability, even in one of the most traditional industries. ~ Deb

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The "Un-CEO" Of W.L. Gore, How To Deal With Chaos, Terry Kelly

The "Un-CEO" Of W.L. Gore, How To Deal With Chaos, Terry Kelly | Change Leadership Watch | Scoop.it

Embrace "rainmakers," says the leader of the company behind Gore-tex. Her mantra for seeing 10,000 associates in dozens of countries through turbulent times: maturity.


We have what we call rainmakers and implementers,” Kelly explains.


________________________

So we try to protect the rainmakers. That means we have to be comfortable with more chaos.”

________________________


“Rainmakers come up with wild ideas, implementers make them real. The two drive each other crazy. If you’re not careful, control will gravitate to the implementers. So we try to protect the rainmakers. That means we have to be comfortable with more chaos.”


“Our organization is used to dealing with chaos, we have a high tolerance for it. We like to respond to crises. When the ship is under attack, the level of ownership is high, culturally. But you don’t want to run an organization that is constantly under attack.”

~ Deb
Deb Nystrom, REVELN's insight:

Not everything is innovative and cutting edge at W.L. Gore (Gore-Tex).  As a large private company, they have their share of issues among the ranks.  


Glassdoor, which does tend to draw plenty of naysayers and disgruntled reviews, also provides a negative universe window in, which includes Gore's peer (associates) review process tied to compensation, usually (in my book) a bad idea - to tie compensation to anything involving review.  ~  D

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This Is Generation Flux: Meet The Pioneers Of The New (And Chaotic) Frontier Of Business | Fast Company

This Is Generation Flux: Meet The Pioneers Of The New (And Chaotic) Frontier Of Business | Fast Company | Change Leadership Watch | Scoop.it

That Fast Company identifies GenFlux seems a is a renegade idea way disrupting traditional HR staffing / people concepts for organizations.  Think "churn" as a way of being.


"The future of business is pure chaos. ...So it seems...today.  GenFlux is a mind-set that embraces instability...even enjoys--recalibrating careers, business models, and assumptions."


A variety of careers & ages are profiled in Fast Co's piece.  I remember back when "white water change" and "pinch-points of change," were 90's terms tossed out while working on the latest reorganization, staffing change or technology installation, followed by the brand, is "you" in so many words.  


Excerpts:  


"There's a difference between the broadcast and networked worlds," danah boyd (lower case by intention) and Senior Researcher at Microsoft, says. "Command and control and hierarchical structures are being disintegrated. Big companies are trying to make that slow down. They have massive internal structural issues."


...From classrooms arranged in rows of seats to tenured professors, from the assembly line to the way we promote executives, we have been trained to expect an orderly life.


Thrivers are the members of Generation Flux, who are less a demographic designation than a psychographic one.  


GenFlux is a mind-set that embraces instability, that tolerates--and even enjoys--recalibrating careers, business models, and assumptions.  ...To be successful, businesses and individuals will have to work at it.


This is no simple task. The vast bulk of our institutions--educational, corporate, political--are not built for flux. Few traditional career tactics train us for an era where the most important skill is the ability to acquire new skills.


"I don't have any personal challenges about throwing away the past. If you're not changing, you're giving others a chance to catch up." ~  Pete Cashmore, founder of the widely popular, Mashable, with more than 2 million twitter followers

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Leading the change-capable organization - Accenture Outlook

Leading the change-capable organization - Accenture Outlook | Change Leadership Watch | Scoop.it

Rather than reshape itself periodically with stand-alone change programs, a company and its culture must be now “change capable,” all the time.


A paradox of organizational change is that all the initiatives companies undertake to support major transformations—learning programs, structural changes, communications plans and the like—can actually prevent effective change as much as enable it.


The enemy is time. It may take months to bring a team on board to design and execute a change program, then several more months to make the transition to a new way of working. By that time, who can be sure the initiative is even relevant to the real business issues of the day?


...Chris Degg, the company’s HR, communications and training director, notes: “We realized that we could no longer rely on occasional, ad hoc programs to help us cope with organizational change. It had to be something we were good at across the entire company and at every level, all the time.

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