Assignment8-FinalPaper61.docx

Running head: GUIDED IMAGERY AND PROGRESSIVE MUSCLE RELAXATION

6

An Examination of Holacracy

Team B – Paula Hawkins, Jonalen Manalo, Dario Munoz, Fabian Oros, Ishana Racine
Department of Management, American Military University
MGMT 617: Leading Teams
Doctor Reshowrn Thomas
September 27, 2020

An Examination of Holacracy

Holacracy is a compact and complete system utilized for self-management through an organization and defines individuals, not by the traditional management hierarchy and titles – but vital roles. Holacracy builds and increases the organization in a manner that is fast, agile, and succeeds by pursuing their purpose, not following a dated and artificial plan (Robertson, 2015). The holacracy approach gives individual team members the courage and motivation to take initiatives, grasp the problem, and address the issue. The delivery system of authority in the holacracy approach decreases the heavy load on leaders to make all the organization’s decision-making. When implemented successfully, the holacracy approach is an alternative, effective, progressive model for contemporary businesses. This paper will explore the history of holacracy, identify its advantages and disadvantages, present findings of successful and unsuccessful implementation, and propose recommendations for conceptual implementation.

Literature Review

History

The hierarchical, or “Top Down” leadership model has been the preferred management method used in organizations, in which power is funneled through a select few individuals who render all decisions. Although a wide variety of leadership styles have been employed to empower subordinates in the past, none have gained the wide-spread interest from business leaders as the contemporary approach known as holacracy. Dr. Radhakrishnan Nair’s approach goes beyond decentralization and empowerment towards self-management (Nair, 2016). Dr. Nair asserted that each employee can fill multiple roles at a time, depending on their mission and responsibilities. In 2007, Brian Robertson created the Ternary Software Company by conceptualizing the notion that power is equally distributed among all employees. In addition, the progressive method eradicated leader/subordinate relationships and replaced job descriptions with work setting roles. Robertson also created a governance process for decision-making that takes away the ego, as well as preferences, from the equation – thereby creating the holacracy constitution. This constitution provides the rules and guidance to align members with holacracy; this framework also supplies flexibility, as it allows for change as needed – so long as the change requested does not cause detrimental damage to the organization itself.
Sociocracy pillars of dynamic governance, decision-making by consent, and consistent feedback played a vital role in shaping holacracy, which contributed to its increased adoption by multiple organizations. The theory of asserting the same level of control in the workplace for all is an engaging method of collective (e.g., individual and organizational) goal realization. Although a developing concept, there are principal advantages and disadvantages of holacracy through organizational implementation.

Advantages

Holacracy creates an environment based off autonomy, decreasing the need for management practices for the leadership positions. Due to the equal distribution of power, all employees can make their own decisions – thereby eliminating the employer authorization requirement. Holacracy decreases levels of animosity in organizations, which are often attributed by workplace power imbalances and an “us versus them” mentality. Holacracy also encourages employee creativity through its self-managing approach, allowing for a variety of ideas that support organizational innovative practices.
Cultivating a peer to peer workplace allows for efficient, innovative, and flexible decision-making capabilities. As previously discussed, the burden of decision-making is shared by all in traditional leadership models (e.g., members do not have to funnel information upward to make decisions). Instead of waiting for a decision to be rendered, the autonomy of holacracy expedites ‘precise’ decision-making; this precision is attributed from the subject matter experts’ ability to readily make the decisions that will directly impact their roles. This autonomous perspective supports that direct levels of interaction (versus the upper levels of management) are often more equipped with the information available to make the most sound and effective decision (Yew, 2020).
Many organizations, regardless of industry, are weakened by unsatisfied employees. The self-satisfaction created by an environment that embraces holacracy contributes to the overall happiness of members. Motivation in the workplace, or lack thereof, directly correlates with its efficiency. By allowing the ownership of ideas, employees will be gain a sense of empowerment and inclusivity; these aspects will increase intrinsic motivation and corresponding levels of commitment to their organization.

Disadvantages

The implementation of holacracy is complex – and the time to prepare a company is crucial for its success. Pre-conditions such as training personnel and organizational restructuring must be met before the change can occur. Small ‘startup’ companies will be able to implement holacracy processes more readily than an existing company with over one hundred employees. Larger companies transitioning to the contemporary model will have to invest revenue in training and require years to accommodate implementation strategies. The transition from a hierarchical to a holacracy model is drastic and will disrupt the known processes and habits developed within the organization over the years. Employees may not welcome the trade from small unit leaders to self-managers. Zappos, for example, lost 18% of employees [out of a workforce of 1,500] when the organization transitioned to holacracy in 2014 (Kumar & Mukherjee, 2018). Employees are often uncomfortable with change and it becomes apparent when large-scale organizational implementations are conducted; not all members are willing or able to assume initiative and think creatively to accommodate change. Innovative and flexible ideas are crucial for holacracy; however, if a person embraces self-management, it is unlikely that they will keep up with their organizational demands.
Although the implementation of holacracy in an organization is a key matter for the workforce, sustainability [as the company expands and grows] is another principal aspect of concern. With the elimination of job titles, organizational identity is degraded – which may contribute to the development of animosity [over time] between employees. As with the effects of any organizational change, human emotions may impede progress throughout the implementation process, presenting further challenges and affecting the likelihood of long-term company success (Kumar & Mukherjee, 2018).

Findings

Holacracy Structure Implications

The first instance that is important in this case is the issue of defining holacracy. The situation means or pertains to the prevailing and the world-tested technology that is involved in an agile and purposeful organization. The notable aspect that is related to this situation is replacing the prevailing top-down structure that has been used by many organizations to run their firms. The holacracy structure of an organization is also involved in dealing away with all the forms of management and ensuring that a firm is entitled to issues of lean and a purpose-driven organization, (Van de Kamp, 2014). Therefore, the approach is highly involved in making sure that the old and the prevailing structure of organizing the organizations have been dealt away with and that the prevailing structure is the one that is running the organizations and that none of the individuals would be involved in compromising this structure since it has numerous advantages to an organization.

Organizations Opposed to Holacracy

The other instance to recognize as far as this approach is concerned is that not many organizations have embraced this practice. The reason is that holacracy tends to be a new structure of running organizations and the one that most leaders of various organizations are unfamiliar with or have little information about it. According to Kumar & Mukherjee (2018), most of the organizations are used to the top-down structure and the flow of information is on a top-down ladder in that it flows from the top leaders to the staff and later to employees, and feedback is provided in such a manner. Due to this situation, many organizations are opposed to embracing holacracy since they are inclined to the top-down structure of running their organization. Therefore, embracing holacracy becomes a hard task to attain. Avoiding the past and the prevailing information within a given environment or organization is a hard activity to achieve. Therefore, the issue of holacracy is a hard thing but it is one that might be attained.

Successful and Unsuccessful Implementation Examples

The other finding as far as holacracy is concerned is that certain organizations have failed to implement it successfully while other firms have been successful in implementing it. The reason is that the practice is a new thing in the business world and most of the people are less familiar with the practice. Due to this situation, firms are likely to oppose it as it claims for doing away with the top-down structure that is a common practice within most organizations. Since the practice is a new undertaking, it is important to look at firms that failed to implement it successfully. Zappos company is one of them and according to Luenendonk, (2019), this company embraced self-customized activities such as controlling its production, maximizing its sales, and engaging in self-efficacy and the practice resulted in increased revenue amounting to $1.2 billion in 2009 as well as increasing the retention of employees in the same year. ExtraHop is the other firm and as an organization meant for creating cybersecurity solutions for the consumers of the enterprise, the firm failed to successfully implement self-customized practices due to the nature of the company. Cake Human Resources also failed to implement it successfully. It is an organization that mainly deals with software for managing human resources, but it failed to implement self-customized management practices successfully.
The issue of holacracy in organizations is an activity that requires time to implement as certain individuals feel that they are being deprived of their essential seats and positions that they should be sitting and also dominating (Nair, 2016). As a result, leaders in these organizations are likely to object the position of having a holacracy structure of an organization as such individuals intend that they will keep their positions and also be at the topmost positions in the leadership.
Organizations have tried to implement holacracy. Notably, not all the firms have been successful in implementing it as numerous firms failed to implement it. However, certain firms managed to implement it, and this brings about the issue of the advantages and the disadvantages of holacracy. Therefore, it would be claimed that those firms that embraced holacracy are those that felt it was highly advantageous while those that failed to embrace it felt that the practice was not advantageous to them by all the means. In case the practice is reasonable to people or an organization, then the firm is likely to embrace it despite a situation where an organization feels that the practice is unacceptable to them, (Velinov et al., 2018). As an essential way of summarizing the situation, it is important to argue that holacracy is not an easy activity as the majority of organizations have failed to implement it while it is only a few firms such as David Allen Company.

‘Self-Customization’ is Key to Success

The company implemented self-customized management practices such as defining its work with integrity, the satisfaction of the customers, and also having a highly friendly staff. According to Pressler (2019), the practice paid well as the company managed to make a revenue of $61.1 million as the current revenue levels. Starbucks company is the other organization to implement it. Located in Seattle in the United States, the firm implemented self-customized practices such as involving technology in its production and also controlling its production to satisfy its consumers. The result of engaging in the practice was an increase in its revenue streams amounting to $26.51 billion in 2019. As an example, technology is considered as the practice that might have a great impact on the process of production and allow online purchasing.

Recommendations

Holacracy Organizational Benefits

Holacracy management is sought after because it promotes higher employee commitment and employee engagement by sharing information to lead to self-management. The alternative to the traditional top-down management would see a shift towards self-management to adopt the holacracy constitution. The holacracy structure is a set of rules that changes the traditional management hierarchy, the expectations are clear and that translates into transparency of the authority given at every level. Holacracy, seen as a new form of management, would provide the flexibly desired organization to optimize their management process. Holacracy offers the opportunity to shift managerial behavior using multiple team members as part of management. 

This new form of scientific management will require the CEO’s, managers, and workers to change behaviors and abate the traditional management style of hierarchy. When the organization adopts the principles of sharing intelligence, they decentralize the organization and revolutionize management. Romme (2017) asserts that “once the blueprint of holacracy or sociocracy has been adopted, any implementation strategy will do to get the organization there, and these new forms of management do not affect executive and supervisory boards” (p. 7). The fear of management practice change stems from what or how the executives perceive the change with holacracy executives is not directly affected. It aims to organize the company around the work instead of the positions of people in the company. The process requires sharing information, starting slowly to build momentum and consensus around the idea of self- management and, more importantly, setting realistic goals.

Holacracy Restructure Holacracy processes make organizational changes more effortless. The process changes happen more frequently with less tension in the organization. Holacracy style of management power is decentralized and distributed in each circle, making it easier for employees to act on issues before they metastasize. The employees do not subscribe to a job description, but roles within their circle of the holacracy process. Nair (2016) explained the difference between position and job description in holacracy: “holacracy distinguishes between roles and people who fill them, as one individual can hold multiple roles at any given time. A role is not a job description” (p.1). This type of power distribution energizes all the circles with the organization to go beyond self and act in the organization’s best interest. Organizations have found it advantageous to use holacracy for numerous reasons. Such as facilitating innovation that empowers employees to solve problems. This form of self- management enhances efficiency and satisfaction for employees through increased employee accountability. Holacracy is not the absence of management, but the introduction of self -management throughout the organization; this changes the dynamic of peer to peer interaction to eliminate some of the leader-follower conflicts over time. It provides clear responsibility and freedom to meet the organizational expectations of employees.
This holacracy management style may be used in many organizations where the outlined principles and established rules are always followed. Holacracy gives organizations the advantages of being agile, efficient, transparent, innovative, and accountable, moving points for many organizations. Moving away from traditional management to holacracy is a feasible alternative for an organization to adapt and move them towards those organizational advantages. Holacracy style of management works in organizations of all sizes across industries. It impacts the culture and creates a sense of collective wisdom amongst employees. It is flexible enough to be implemented in phases across the department in an organization without disrupting the entire
organization.
According to Velinov et al. (2018), “Holacracy is a good feature which is possible to implement in one team or smaller department which needs a more agile approach, or it can be a good experiment to test if holacracy is suitable for your company” (p. 334).  Holacracy practice can work in any organizational context if employees are ready and open to the change. The Implementation process of holacracy uses some fundamental elements to ensure the process works. The fundamentals focus on collecting data in three parts: results, the process to get to the results, and each person does the task.
The method also emphasizes communication channels, which incorporates a different medium to reach everyone. Along with the communication channels is the release of information and power. This facility informed decision-making due to information available through press releases, meetings, and other message boards. Management is concerned about the change process on the employees and the overall structure of the organization. Holacracy promotes changes consistently, and over time builds consensus around changes that would be beneficial to the organization. The central core principle of holacracy is people taking accountability for their work. It gives everyone a voice while being adjustable and adaptable both for the individual and the organization. This new form of organization circular structural alignment present by holacracy creates a defined line of operation that increases performance and behavior of employees over time when adopted and carried out.

Conclusion

This paper explored the history of holacracy, identified its advantages and disadvantages, presented findings of successful and unsuccessful implementation, and proposed recommendations for conceptual implementation. As identified in this paper’s findings, the holacracy framework may not readily yield success for organizations; the unique approach requires a deliberate and phased implementation process and revolutionizes decision-making within a company. However, when an organization properly embraces these principles, peer to peer cultures may greatly enhance efficiency and innovation, furthering levels of member self-satisfaction. Although there are industries that oppose the concept of holacracy, its success can be measured by some, to include the well-known Zappos. As the demands of modern business evolve, holacracy may very well transcend traditional leadership approaches by offering a distributed authority that provides radical transparency and responsibility – boosting 21st century advancements toward pronounced states of autonomy.

References

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Luenendonk, M. (2019, September 18). Zappos: E-Commerce Retailer. Cleverism. https://www.cleverism.com/zappos-ecommerce-retailer/
Nair, D. R. (2016). Holacracy in academia. SCMS Journal of Indian Management, 13(1), 4. Retrieved from https://search-proquest-com.ezproxy1.apus.edu/docview/1780449824? accountid=8289
Pressler, A. (2019, October 1). Business North Carolina’s Top 125 Private Companies 2019. Business North Carolina. https://businessnc.com/business-north-carolinas-top-125-private-companies-2019/
Robertson, B. (2015). Holacracy: The New Management System for a Rapidly Changing World by Brian J. Robertson. Retrieved September 09, 2020, from https://www.goodreads.com/ book/show/23526564-holacracy
Romme, G. (2017). Management as a science-based profession: A grand societal challenge: MRN. Management Research Review, 40(1), 5-9. Retrieved from https://search-proquest- com.ezproxy1.apus.edu/docview/1859399842?accountid=8289
Van de Kamp, P. (2014). Holacracy- A Radical Approach to Organizational Design. A journal on the influences on project success and failure, 13(2). Pages 13-26.doi: 10.13140/2.1.3740.8645
Velinov, E., Vassilev, V., & Denisov, I. (2018). Holacracy and obliquity: Contingency management approaches in organizing companies. Problems and Perspectives in Management, 16(1), 330-335. doi:http://dx.doi.org.ezproxy2.apus.edu/10.21511 /ppm.16(1).2018.32
Yew, S. Y. (2020). Holacracy in action: Zappos experience replicability [Unpublished master’s thesis]. Università Ca’Foscari Venezia.