Holacracy is a management style designed to create order without bosses, putting more independent decision making in the hands of employees (Getty Images/DaniloAndjus)
It’s no secret that millennial workers are more likely to change jobs than their older peers. After a 2016 Gallup poll found only three in 10 millennials reported being engaged at work, the company branded this cohort “the job-hopping generation.” A 2019 survey of more than 1,000 millennial managers found that 75 per cent of respondents believe frequently changing jobs will advance their careers. Workers today expect more than just a good salary: They want opportunities for autonomy, flexibility and personal growth. Shifting ideologies that existed pre-COVID have only accelerated amid the pandemic, and this is reshaping the way we choose careers.
Some companies are refashioning the traditional organizational hierarchy in favour of self-management, putting more independent decision making in the hands of employees. Perhaps the most well-known version is Holacracy, a management style designed to create order without bosses. Holacracy’s founder, Brian Robertson, likens it to “nature’s way of organizing complexity”—the way the cells that make up our body take on roles, working independently to keep the body functioning, with no managers in sight.
Founded in 2007, Holacracy garnered buzz after e-commerce giant Zappos officially adopted it in January 2014. But it remains less understood and reported on than other management theories. According to holacracy.org, more than 1,000 companies worldwide have adopted it. Robertson says Canada is “relatively new” to the philosophy, but now that there are some solid examples of Canadian firms using it, he expects to see growth. I reached out to a few Canadian companies who have taken the plunge to see what the future of work might look like in practice.
Toronto travel company G Adventures has received wide media coverage—and several awards—for its alternative organization style. “We aren’t beholden to any form of hierarchy and we collaborate directly with a range of people within the organization, regardless of their title,” says Gurmehar Randhawa, a CPA and the company’s global finance director. There’s no official name for the structure practised at G Adventures, he says, but employees take on more independent decision making. Instead of adopting an instructional or oversight role, managers are more like coaches or mentors.
Randhawa says this structure allows workers across departments to connect more. This brings his finance division closer to other functional areas than it would be otherwise. He’s even seen an improvement in his forecasting, because he is able to use more specific data- and market-driven information instead of basing it on trends.
After one of their founders moved overseas, Vancouver engineering consultancy MistyWest reorganized its company’s leadership structure using Holacracy. Principal engineer Taylor Cooper says employees still work typical nine-to-five days, but things look a bit different since they made the switch in early 2019.
Holacracy requires people to step into roles and volunteer, rather than waiting for an assignment
There are fewer meetings, for one. Cooper also notes that workers may be asked to refer to Glass Frog—Holacracy’s proprietary project-management software—before reaching out to their colleagues. Less time is spent building consensus and stepping on each other’s toes, and those “closest to the problem and best informed” are now making decisions.
Cooper says adopting Holacracy allows MistyWest a competitive advantage—the company benefits from making small improvements, when they might otherwise get lost in organizational bureaucracy.
Toronto-based IT solutions firm Arctiq started using Holacracy in November 2018. After the company had scaled up to about 12 employees (they now have 26), executives felt the need to either add more management or try a different operational structure. Arctiq partner Tim Fairweather says he was convinced to shake things up after researching other companies that had successfully implemented an alternative structure. “There’s nothing really limiting a team member from helping make the company they work with kind of their own,” he says.
But Fairweather notes that the freedom and flexibility Holacracy encourages is a double-edged sword. They require everyone to buy into the system or else time and resources are wasted. This challenge is most acute for larger firms; in 2015, a year after switching to Holacracy, Zappos announced a buyout to employees not fully willing to commit to the system. Over the next 10 months, 18 per cent of their staff chose to take buyouts, with six per cent citing Holacracy as the reason.
A chief criticism of self-managed firms is that with management absent, direction and accountability follows suit. Who steps in when there’s discord or miscommunication? MistyWest’s Cooper admits the arrangement comes with challenges. “Sometimes this leads to things getting dropped because it’s not clearly anyone’s accountability,” he says.
But in the right setting, this shouldn’t be a problem. By design, Holacracy requires people to step into roles and volunteer, rather than waiting for an assignment. A firm with employees ready to take on this level of leadership is one ready to deal with accountability concerns. Self-management also provides an opportunity for companies to differentiate themselves to candidates, attracting and retaining those who share its values.
Of course, this shift won’t be universal. Many individuals want, and thrive in, traditional workplace settings. And researchers say the concept is better suited to organizations and fields that benefit from agility, like software engineering. Still, Fairweather says Holacracy wasn’t a big leap for Arctiq. “It felt more like we were putting an official structure around something we were already doing.” Though these shifts are still on the fringes of management theory, they might be closer to your company’s culture than you realize.
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