A look at a few of the problems Zappos is having making Holacracy with within their organization. If I were to sum it up on a few words, it would be too much of a focus on organizational process.
My critique of this article is that it unfairly ascribes the motivation for trying Holacracy as a desire to turn people into highly efficient software. That’s simply not true. The goal behind the management system is to develop a non-hierarchical approach to managing an organization.
I have been watching some of these experiments over the past few years, hoping that they would work. Years ago, I actually met with the founder/visionary behind Holacracy while he was visiting Seattle. I was running a similar experiment with my own organization at the time, and running into problems. The core of the difficulties? Too much energy was going into process, and it was bogging us down.
Hierarchy, it turns out, is a pretty efficient model for making decisions amongst a group of humans. It bothers me to say that, but it’s true. It does have all kinds of drawbacks though. Some of these can be overcome with culture and process innovations, but that requires a management team that fully acknowledges these pitfalls from the get go.
I personally am of the belief that as our software systems get better, we may actually be able to make non-hierarchical management structures work, as software takes up some of the complexity and awkwardness of managing the process. Until then, I’m not going to bash leaders like Tony Hsieh for trying to make stuff like this work. It’s a risky move, to be sure, but the intention behind it is laudable.