"Beyond the holacracy hype"

Several years ago, our clinical operations team invited Harvard Business School professor Ethan Bernstein for a visiting professorship.  I was fortunate to have dinner with Dr. Bernstein during his visit, and he taught me a lot about organizational structure.  He wrote an article for Harvard Business Review a few years ago that I've mentioned a few times in previous posts (see "Lovable Losers once more...", "A Flock of Starlings", and "Any old map will do...") called "Beyond the Holacracy Hype".  I've also posted about Dr. Bernstein's other research several times in the past (see "Vox Populi", "The Search for Meaning", and "Big Brother is Watching").  Reading his article, "Beyond the Holacracy Hype" led to the purchase of a book by Brian Robertson entitled Holacracy: The New Management System for a Rapidly Changing World.  Earlier this year, I finally picked Robertson's book off my shelf and read it.  I think I originally purchased the book two years ago - remember "Tsundoku"?

I have a been a major proponent of the concept of "Deference to Expertise" and some related leadership concepts, such as empowerment, Auftragstaktik, "commander's intent", and "Pushing Authority to Information".  I have read with interest some of the research on self-managed teams, some of which touches upon the even broader concept of complex adaptive systems.  And up until relatively recently, I've thought that a decentralized model of leadership would work best in today's environment.  I now believe that organizations have to centralize (at least somewhat) before they can take full advantage of these more decentralized models of leadership (see my post "You centralize so that you can decentralize...").

So, my leadership philosophy has evolved somewhat since the first time I met with Dr. Bernstein.  I'm not saying that everything I've posted on this topic in the past was wrong - quite the contrary.  I'm simply saying that a fully decentralized model, similar to what is suggested by Brian Robertson in his book, Holacracy: The New Management System for a Rapidly Changing World, may not be the best model in today's environment.  Perhaps management theory and organizational behavior will catch up with Robertson one day, but not just yet.

Holocracy is defined as a method of (mostly) decentralized management and organizational governance, that distributes authority and decision-making through a which claims to distribute authority and decision-making to self-organizing teams (or self-managed teams) rather than being vested in the management hierarchy of the more traditional organizational structure.  The conceptual basis of Robertson's model is not new.  For example, the management guru Gary Hamel said at the 2009 World Business Forum in New York, "The world is becoming more turbulent than organizations are becoming adaptable.  Organizations were not built for these kinds of changes."  

Hamel wrote in an article for Harvard Business Review in 2011 ("First, Let's Fire All the Managers"), "Give someone monarch-like authority, and sooner or later there will be a royal screw-up...in most cases, the most powerful managers are the ones furthest from frontline realities.  All too often, decisions made on an Olympian peak prove to be unworkable on the ground."  Robertson said something a little stronger, when he wrote, "Today's organizations are quickly becoming obsolete.  

Robertson suggested, "Our organizations today are simply not designed to rapidly evolve on the basis of inputs from many sensors.  Most modern organizations are built on a basic blueprint that matured in the early 1900's and hasn't changed much since.  This industrial-age paradigm operates on a principle I call predict and control: they seek to achieve stability and success through up-front planning, centralized control, and preventing deviation...the predict-and-control approach focuses on designing the perfect system up front to prevent tensions...This model worked well enough in the relatively simple and static environments faced in the era in which it matured."

The traditional models that worked well in the past are no longer appropriate for today's VUCA world.  Robertson would certainly agree on this point.  He wrote, "In today's postindustrial world, however, organizations face significant new challenges: increasing complexity, enhanced transparency, greater interconnection, shorter time horizons, economic and environmental instability, and demands to have a more positive impact on the world...the predict-and-control foundation of the modern organization often fails to provide the agility desired and needed in this landscape of rapid change and dynamic complexity.  And the structure of the modern organization rarely helps ignite the passion and creativity of the workforce."

Unfortunately, Robertson's model replaces the traditional org chart with something as equally complex and, at least to me, confusing.  Work is structured around roles, not titles (that part makes sense to me). One person can hold multiple roles, and these roles can change over time (that part also makes sense, but it's starting to get harder to follow).  The organization is divided into "circles" (basically, self-managed teams), each responsible for a specific function.  These "circles" are semi-autonomous and nested in even broader circles (okay, that part sounds like Robertson is replaced the pyramidal-shaped classic org chart with a bunch of nested circles, which still sounds to me like an org chart).  There are governance meetings and tactical meetings, with rotating membership and different rules of order to follow (at this point I became thoroughly confused).  The pre-defined and agreed upon rules, regulations, and processes that are used to run these two different meetings and, as a result, the operations of the organization itself, seemed just as prescribed and rigid as any other operating model.  And indeed, that has been one of the biggest criticisms of Robertson's holocracy model - it can be so complicated and rigid to implement that it quickly overwhelms teams.

I am not saying that we don't need rules and standards.  David Allen, who wrote the Foreword for Robertson's book is the author of two similar books, called Getting Things Done: The Art of Stress-free Productivity and Making It All Work: Winning at the Game of Work and the Business of Life suggests, "There is no freedom without discipline, no vision without a form...If there were no lines painted on the road, you wouldn't be free to let your mind wander and be creative while you drive.  You'd be too busy hoping no one hits you.  But if there were too many lanes and restrictions and rules, you'd have traffic moving much slower than it should, as everyone was trying to pay attention to the right place to be."  Allen makes a lot of sense to me and states something that I've argued for in the past - the fact that "Deference to Expertise" (or whatever you may wish to call it) has to come with guardrails (see "The Nelson Touch" and "Empowering employees doesn't mean leaving them alone...").  

Overall, I had higher hopes for Robertson's book (and model).  Again, perhaps my leadership and management philosophies have evolved somewhat over time.  I still believe STRONGLY in the concepts of empowerment, Auftragstaktik, "commander's intent", and "Pushing Authority to Information".  And I do think we need to look at organizational structure differently than we have in the past.  However, replacing the complicated structure of a heavily matrixed organization with the equally complicated structure of nested circles doesn't really sound to me like a major improvement.