Beyond the Holacracy Hype

Beyond the Holacracy Hype

HBR, July-August 2016, p38

By Ethan Bernstein, John Bunch, Nico Canner, and Michael Lee

Adam Smith sang the praises of the division of labor in 1776 and the world has not been the same since. Holacracy attempts to reverse that trend through self-managed work circles. Holacracy is surrounded by a lot of hype, much of it coming from founder Brian Robertson, and this article, authored by people who implement holacracy, is also not without hype but it does present enough of the dark side to be useful.

Holacracy is a complicated solution to what might have been a simple problem. It seems that people need to have a say in what they do and how they do it in order to feel good about what they do and to be productive. They don’t want to be told to do what they were going to do anyway. They don’t want critical managers breathing down their necks. They want to be treated with respect and valued for what they contribute to the organization. Is this so difficult? Does this require that Adam Smith and the division of labor be upended so that everyone becomes a generalist, or at least a management specialist in addition to their other roles? Does this require a complex solution that requires a computer program to keep it straight and that forces managers to get out of the way and let people do their work or that requires workers be trained in management procedures for six or more weeks in order to be successful? Perhaps so when you consider that most corporations spend much less time and effort (think very close to zero) training their managers.

Both hierarchy and holacracy can function as the organizing principle of an organization. Making either one work well requires people who are at later stages of adult development. This is what holacracy was trying to get around by creating a system that is highly structured and therefore should not need such people. The article states that there are three goals of a self-managed organizational structure such as holacracy: 1) Designing roles that match individual capabilities with organizational goals, 2) making decisions closer to the work, and 3) responding to emergent market needs. The article recognizes that, “One of the greatest challenges of implementing the[se three] goals at scale is insufficient leadership”, which perhaps makes holacracy an oxymoron. Insufficient leadership is ever the problem with organizations and neither holacracy nor hierarchy, each with different strengths, is likely to solve that issue.