There have been several articles about Tony Hsieh, Zappos, and holacracy lately- probably the one at the New York Times is the most prominent. I’m intrigued by the idea of holacracy, but I’ll admit I’m fairly skeptical about it. (If you don’t know what it is, it is a system by which a company functions as self-organizing teams, with no managers. The NYT article summarizes the idea.)
I want to explore my thoughts about holacracy, and a blog post is a good way to do that. But my thoughts are still a bit amorphous, so this is going to be a loosely linked list of thoughts, and not a well-crafted coherent argument.
1. Eliminating managers does not eliminate the work they do
I know, a lot of people think that managers don’t do anything useful, but that is only true of bad managers. There is actually some real, useful work that competent managers do, particularly in large organizations like Zappos. First of all, there’s coordination. The larger your team and the more complex your projects, the more work it is to keep everything coordinated. Sometimes this is frustrating work. Often, it is unrewarding work, or at least unappreciated by people who think (or wish?) that things should just coordinate themselves. There are other tasks in this vein, too– the nitty-gritty work of getting a group of people all working together.
Then there’s tasks like setting priorities and deciding who is going to work on which things. These are more visible tasks, and I suspect they are sort of tasks that make a lot of people want to be managers. They tend to be rewarding tasks, and certainly everyone notices them getting done.
There are also the “people-centric” tasks, like mentoring and providing performance feedback. I suppose that even in a regular work environment, performance feedback can come from pretty much anyone, but it is the manager’s performance feedback that matters for raises, promotions, and the like. The manager is also supposed to have an eye towards helping team members grow their skills and advance their career.
So, you can eliminate managers, but you don’t eliminate these three fundamental types of work: the highly visible direction setting, the less visible but hugely important coordinating, and the “touchy feely” people work. One risk I see in a holacracy is that different people will end up doing these different aspects. This could be fine- good, even, since not everyone is going to be good at all three types of tasks. However, the three types of tasks are not usually valued and rewarded equally. It seems that there is a real risk of the “strongest” personalities in the self-organized team picking up the work that gets the most attention and rewards, while other people do the equally important but less flashy work for less reward.
Now, there are certainly ways to try to minimize this problem. You could explicitly identify these different types of “managerial” work and make it clear that all are equally import. You could coach employees about how to best steer their careers in this environment (but who’s going to do that?) or you could institute some rules about what types of tasks have to be considered together. But I’m not sure that any of that happens in a holacracy. It seems to me that the ethos in the holacracy is that people have to sort this sort of stuff out for themselves.
Which leads me to my next thought.
2. Eliminating the formal hierarchy doesn’t eliminate hierarchy
Humans are social animals and we tend to sort ourselves into hierarchies. A self-organizing hierarchy might sound ideal, but I have concerns based on the fact that some people will enter into this negotiation with unfair and probably unrecognized advantages. In particular, people who are in the identity group whose natural way of interacting has defined the work culture will do better than people who are in other identity groups.
Business culture tends to be set by men, and by a certain subset of men. There is nothing wrong with this culture per se, but it tends to be the culture that best fits how these men are used to interacting with others in their group. Other people (e.g., men from different backgrounds and women) might find it harder to navigate through the culture and advocate for themselves. One example of this is the use of aggression. As I discuss in my latest Chronicle Vitae post about “argument culture,” many women and people of color of all genders are at a disadvantage in work cultures where aggressive interactions are the norm, because aggressive behavior is viewed differently when they exhibit it than when a white man does.
Another example is the self-promotion that might be required to put yourself forward for the best roles in a holacracy. Self-promoting behavior is another thing that is viewed differently and gets different results depending on who is it doing it.
More generally, different people have different communication styles. People whose communication style matches that of the dominant group that has set the culture of the team are going to find it easier to get their way. It can be very easy for even well-meaning people who have a very direct communication style to completely steam roll people with a more collaborative style, particularly if the direct style is seen as the norm. (In fact, this is one of the reasons I argue that you should think about the ground rules of any meetings you run- all meetings have ground rules, but as I’ll discuss in my upcoming seminar about running better meanings, we don’t always think about them. Thinking about the ground rules can help you make sure that they enable everyone to get heard, regardless of communication style.)
Traditional work organizations have not solved these problems by any stretch of the imagination. However, one of the nice things about formalizing the hierarchy in an organization is that it identifies some people whose job includes working to make sure people with different communication styles all get heard and that people from different backgrounds all have a fair chance at having their ideas and contributions recognized. There is no reason that these things have to be a problem in a holacracy, but whose job is it to watch out for problems? Who monitors the fairness of the culture that evolves? When companies with traditional hierarchies suck at this, at least it means someone is failing at an aspect of their job. I worry that in a holacracy, it would just mean that no one wanted to take on that role. Or that no one saw it as a role that even needed to be filled.
3. Will self-organizing teams self-select for homogeneity?
We know that teams composed of people from diverse backgrounds perform better, but we also know that these teams can feel less comfortable. In fact, the discomfort may be directly linked to the better performance- everyone has to work a little harder to make sure the team is communicating well, and less is left to assumption. However, this extra effort can be tiring. People who are in the majority group could easily self-select out of having to deal with it. The people who are in the minority might be seen as the source of the discomfort and subtly (or not so subtly) be encouraged to join some other team.
And this doesn’t even address the issue of implicit bias, which I suspect will also drive teams towards homogeneity.
Again, I think this is probably a manageable problem, but I don’t see any mention of whose job it is to keep this from happening.
4. I don’t see any unique benefits to holacracy
When talking about the benefits of holacracy, people tend to say it will give employees more autonomy and let more voices be heard in decisions. Maybe it will. But I would argue that you could achieve these goals without eliminating the formal hierarchy. Employee autonomy and the existence of managers are orthogonal things, if you ask me. The smart manager gives her employees as much autonomy as possible, because this is how more work gets done. Not all managers know to do this, but that is a failure in how we do management and train managers, not in the concept of management itself. You can create a culture in which the most junior person is willing to speak up with his ideas by demonstrating that nothing bad happens when he does- and that sometimes, if the idea is a good one, something good happens. Again, the existence of managers doesn’t preclude this.
So, like I said at the top, I’m intrigued by holacracy, but skeptical. I have yet to see anything that convinces me it provides benefits that can’t be achieved in other ways, and I worry about the realistic chances of the somewhat utopian premise that allowing team members to define their own jobs will naturally result in everyone working jobs that they are happy to do, and being fairly recognized for their contributions.
I’ll be watching how the Zappos experiment goes, and I wish them the best of luck with it. But I won’t be rushing out to join a holacracy anytime soon.