Is the Time Right for SelfManagement?

SUMMING UP When and where will holacracy, also known as selfmanagement, work best? James Heskett's readers are conflicted as they
respond to Zappos.com's radical adoption of the less-is-more management
structure. What do YOU think?

by James Heskett

SUMMING UP
When and Where Will Holacracy Work Best?
Holacracy, or self-management, is an interesting concept and not entirely
new. It can work, but only under the right conditions. And its applications will
be limited. That's what one might conclude from reading responses to this
month's column.
The more thoughtful of them provide a primer on applying the concept.
Deborah Nixon's comment echoed several others when she said the idea
has been around a long time in other forms, by other names. "The larger an
organization becomes, the tougher one model is to implement. The time has
always been ripe for self-management and there are always people who will
poke up their heads and insist on managing themselves. But it isn't a quick
fix." Others cited its long-time application in the London taxi system (Andrew
Campbell), the hospital ER (M Iqbal Gentur B), and even Aboriginal societies
in ancient Australia (Kai Akerberg).
Stephens Jr., who loves the idea, said, it does not come without extensive
time, cost, and involvement in employee development. "I not only say yes (to

the question of whether the time is right for self-management), but 'it's about
time.'" Dyan Porter added, "Holacracy strikes me as a positive way to
manage professionals, especially in flat organizations where job
advancement is limited." Brooks Tanner commented, "Regardless of its level
of success at Zappos, this form of organization is the way of the future. The
rapidly increasing complexity and unpredictability of our world is such that
only a highly distributed decision-making structure will be able to adapt and
respond effectively, she continued. "Most of us don't think a centralized
planning type economy makes sense. Why should it make the most sense
for organizations?"
Others saw limited potential in the concept. As Edward Hare put it, "There
are some people capable of managing themselves in a larger organization
but many who can't This strikes me as another of those 'ideas'
promoted by consultants and academics. " Frank Fabela added, "Holacracy
in its form of each individual taking responsibility for their own selfmanagement is absolutely necessary, however it is the responsibility of
'managers ' to ensure effectiveness of the organization through coordination
of those objectives. Pure holacracy absent management is destined to
fail." Krishnan Mak was more succinct when he said: "Culture will eat
Holacracy for breakfast."
Many comments addressed conditions under which Holacracy might work
best. "It might not be for everybody," wrote Maria Rosa Serra, "but if you hire
employees aligned with your values and pay them fairly, it seems an
interesting proposal for both the company and the individual." Juan Manuel
Salas Guevara commented that the challenge in Holacracy "is a strong
communication process from the top level of the organization that enables
each member to understand the company's vision." Charlie Efford added
that "The key to self-management becoming embedded is changing the
mindset of the management team. Most corporations haven't made this
shift." Denis Collet suggested "it's all about clear goals and deliverables, and
the metrics for success. Absent of these it's bound to fail."
These and other comments provided grist for the question: When and where
will Holacracy work best? What do you think?

ORIGINAL ARTICLE
Recently it was reported that Zappos.com, the online clothing retailer, is in
the process of implementing "self management" under a program called
"Holacracy," a concept being adopted by several hundred other firms.
Instead of being led by managers, associates along with their former
managers are encouraged to define their own jobs ("energize their roles" in
the language of the initiative) and form teams ("circles"). The guidelines for
the effort are spelled out in a 30-page "Constitution" used as the basis for
orienting associates to the new form of organizing work.
Self-management is not a new idea. For example, it was adopted at Taco
Bell 25 years ago under John Martin when a long-term strategic plan was
put in place that called for the company to distribute its products through
more than 100,000 locations of various kinds. The 25-fold increase in the
number of distribution points called for more managers than the company
could possibly hire and train under then-accepted principles of multiunit retail
management. As a result, the company raised the number of units for which
a manager was responsible from one to ten or more. By necessity,
managers could do little more than provide minimal oversight and occasional
problem solving. Store associates, with some coaching, were given
responsibility for hiring, training, and disciplining each other as well as such
things as scheduling and cash management.
The results were remarkable.
Teams of associates worked out new methods. For example, they trained
people new to their jobs during slack business hours. When the meal-time
rush hit, each associate moved to a job at which he or she was most
accomplished-something they called "Aces in Your Places." Within minutes
productivity rose 60 percent to accommodate the rush. Sales targets were
met at self-managed units, associate turnover dropped 29 percent, and
customer satisfaction scores actually improved when compared to
conventionally managed stores. The effort stalled only when the planned
strategy was scaled down and Martin's successor halted further expansion
of the initiative.

Interest in self-management was later stimulated by Gary Hamel's book, The

Future of Management, in which he described innovative efforts to enable
employees to define their own jobs and shape their work at companies such
as Google, Whole Foods Market, and W. L. Gore & Associates, Inc. The idea
may have particular appeal to Millennials who are thought to have high
levels of self-confidence, non-traditional work habits, and, at least in their
early careers, an interest in personal development that exceeds their desire
for high wages.
Change, of course, is difficult. At Zappos, 14 percent of associates have left.
Presumably, a number of these are former managers, although it's not clear
what Holacracy had to do with the departures. (In anticipation of possible
departures, a circle called "Reinventing Yourself" was formed at Zappos for
former managers.)
Even though Zappos is only several months into the initiative, its leader,
Tony Hsieh, urges patience. He is quoted as saying, "It's a gradual process.
It's not a light switch."
How successful do you think the initiative at Zappos will be? Why?
Regardless of its potential for success, does it and efforts like it presage an
important trend? Is the time ripe for self-management? What do you think?

REFERENCES
Gary Hamel with Bill Breen, The Future of Management (Boston: Harvard
Business School Press, 2007).
Leonard A. Schlesinger and Roger Hallowell, Taco Bell Corp., Case No. 9692-058 (Boston: Harvard Business School Publishing Division, 1991).
Rachel Emma Silverman, Going Bossless Backfires at Zappos The Wall
Street Journal, May 21, 2015, pp. A1 and A10.
Taken from: http://hbswk.hbs.edu/item/7531.html