The Circles of “Holacracy” and How They Are Changing The Workplace

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Future growth (and remarkable success in the present) has everything to do with realizing the true human potential of your company. Who are your key players?  How do we encourage people to go that extra step? Communication, motivation, morale, inspiration—we like to think there’s no glass ceiling on it all, but many often scratch their heads wondering how to get more.

Recent discussions have been bubbling up with one gutsy—but promising—strategy of intimidating proportions: eliminate the corporate hierarchy. Even if in totality.

That isn’t to say a “lawless,” leaderless society is becoming the trend (although there are companies like Valve video games that have become one). Many are simply suggesting that a business model of the industrial age is incompatible with modern workplace environments. Harvard business school professor Ethan Bernstein stresses that “It was a way of organizing labor such that the division of labor would be more productive and would be able to do tasks better repeatedly in a predictable way”.

That style of working, beyond manual labor, is indeed fundamentally counterintuitive to the agility of modern business. Vertical hierarchies are flattening. Synergy is basing itself on sideways communication, a self-sufficient team often outpacing those shepherded by a single mind. The evidence is there, as even some of the most successful and innovative brands like Zappos are taking advantage of what’s called the “Holacracy”.


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The Holacracy is one example of several new-age, pro-individual options. 35-year-old programming wizard Brian Robertson brought it to conception, offering a company that charges a fee to gradually segue your workforce into one that replaces titles with dispersed authority and flexible “roles”. Decisions are not given to manager status, they’re spread between department “circles”, each with a soft leader that encourages communication between other circles and cohesion within the team. These leaders can change or be bypassed at any time, encouraging fluidity in a wake of rigidity and linearity.

Madness? Zappos CEO Tony Hsieh claims it lies far from it.

“Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15 percent. But when companies get bigger, innovation or productivity per employee generally goes down,” says Hsieh on the Zappos blog. “We’re trying to figure out how to structure Zappos more like a city, and less like a bureaucratic corporation.”

Can Holacracy-style systems be the future of the modern workplace? Is the traditional corporate hierarchy dead? It’s too early to tell, but one Forbes article probes into its current state of affairs.

While severance packages have enticed 14% of the Zappos workforce to abandon ship, this might be a good thing—a purge of the unmotivated and the disillusioned. It’s difficult to tell what are red flags and what are inevitable growing pains at this early stage. Misunderstandings come amid criticisms from executives hoping for it to fail. Numbers are inconclusive.

“It’s either the future of management or a social experiment gone awry,” says Aimee Groth of Quartz. Time will only tell if Zappos, Medium, and others are at the forefront of business management innovation. For now, all we can do is watch with. Apprehension for some, excitement for others.