Is Holacracy confusing organizational structure with leadership?

There has recently been a lot of chatter about a new approach to organizational structure and management called “Holacracy” – a restructuring of an organization to reduce decision-making bottle necks caused by formal positions of authority.   The big splash about Holacracy came from Zappos where the CEO announced that the company was going to Holacracy and if an employee didn’t like it he or she could leave.   Holacracy is expensive and difficult to implement and the results are, at best uncertain. Ironically, implementing Holacracy is a top-down decision, and yet it’s a system that opposes top-down decisions. Additionally, there is still the unanswered question of salary administration, which is a core source of central authority. Putting all of that aside, Holacracy is really all about trying to improve productivity by creating greater autonomy in the organization.   I have heard the new phrase “managing from the back” a lot lately, which also seems to be giving people greater autonomy. I agree that creating an environment in which people have considerable autonomy can be highly productive. However, Holacracy and leading from the back of the room both misunderstand the conditions that make autonomy reasonable and effective.   Dan Pink’s work in his book “Drive” gives the needed perspective. Pink presents three things that are the primary motivators of most work, autonomy, mastery and purpose – always in this order.   Not surprisingly, people impute meaning to the order and begin by focusing on autonomy without considering the connection between the three. For creating autonomy, the order matters, because of what organizations can and can NOT trust and tolerate.   To illustrate this idea, picture a situation where you decide to grant people autonomy, before they have aligned on the purpose and before you know if they are good at their jobs. There are few managers who are going to be comfortable giving someone significant authority without direct supervision, if there is any doubt about the person’s purpose or ability’s . Since poorly defined purpose statements and marginal development programs are the norms for most organizations, it is no surprise that organizations resist granting autonomy.   Now, let’s look at Pink’s motivators of work in a different order: purpose, mastery and a modified version of autonomy, “earned autonomy.”   Organizations come to trust enough to systematically give autonomy when everyone is clearly aligned on a purpose and great at his or her job. Individuals earn the right to function autonomously by aligning on purpose.   If you want the benefits of autonomy, don’t go through a convoluted, difficult reorganization based on Holacracy or a slogan like “lead from the back of the room.” Instead, focus on building a collective, compelling purpose and robust development programs, if you do you will inevitably build earned autonomy and a much better place to work.  ]]>