Both the New York Times and Inc. have written about Zappos’ holacracy recently. Why isn’t it working?
Order is essential. You can’t work with other people to produce anything, especially anything of significance, without order. I don’t care if you are throwing a dinner party or building an airplane. Decisions must be made, responsibilities assigned, and plans laid.
In a traditional hierarchy, “the boss” drives the decisions and assignments. A holacracy is an effort to replace the traditional hierarchy with a more flexible, organic, network so different people can assume different roles, including being ”the boss,” depending on the circumstances and their skills and interests. In theory, it sounds great. In practice, not so much and this is why:
1. Effective organizations remove unnecessary decisions, they don’t create them.
One goal of any efficient structure should be to eliminate unnecessary decisions. You eliminate decisions by making them once and reusing them. You can do this by establishing routines and models. You don’t decide whether to brush your teeth before bed, you just do it. It’s a routine. No decision necessary. You can eliminate additional decisions, such as layout, footer, and boiler plate text, by creating templates. You can eliminate a plethora of decisions by making them once and capturing them with a checklist, procedure, template, or other model. The fewer decisions you have to make, the more quickly and accurately you can accomplish any task. An organizational structure eliminates decisions about who is responsible for what and where to turn when you need answers or approval. In a holacracy, these decisions must be made and remade time and again. This doesn’t reduce decisions, it adds decisions. Employees must constantly reinvent the way they work. Why would you want to constantly reinvent this wheel? Gee, I wonder if I should brush my teeth tonight?
2. Systems like holacracy consume too much time and energy.
A holacracy demands that you learn a whole new vocabulary and lots of new abstract rules. In this way, it is like Lean manufacturing. Because there is so much to learn, creating value for which customers are willing to pay can take a back seat to implementing the new system. Countless companies implementing Lean have become bogged down and realized few benefits for this very reason. No system should be this hard to learn. When a system increases the attention paid to internal affairs at the expense of externally focused efforts, the company and customers lose.
There is nothing that a holacracy is trying to accomplish that can’t be accomplished in a hierarchical framework. That doesn’t mean all those hierarchies are working well! Most aren’t. But the structure is not the problem. Employees don’t need a new organizational structure. What they need is:
- Clear understanding of priorities – what and why.
- Clarity and honesty regarding what has already been decided.
- Transparent processes that allow everyone to contribute more effectively.
- The authority to make decisions that they are totally capable of making.
- Managers who really know how to delegate.
- Decision-makers who are informed and fair, and consider those who will be affected by their decisions.
- The ability of all to improve results by increasing clarity, not rules and controls.
- Leaders who know how to create commitment and understand that it has nothing to do with consensus or engagement.
- Meetings that never begin unless people know what must be different when they end.
- Effective, two-way feedback.
- Accountability practices that have more to do with partnering for success than discipline and demerits.
- Performance management systems geared toward improvement, not documenting failures and avoiding lawsuits.
- Hiring practices that ensure employees and positions are a good match, and where bad matches are corrected promptly.
- Managers who recognize that it is just as important, if not more important, to streamline cognitive processes as it is to streamline physical processes.
A good hierarchy can be plenty flexible, while also eliminating unnecessary decisions. Increase the clarity of purpose, process, and roles to address these problems. It’s a lot easier and more effective than completely upsetting the apple cart.
This article originally appeared on Forbes.com on January 17th, 2016.