The 5 Types Of Organizational Structures: Part 5, Holacratic Organizations
This is the fifth and final part of a five part post that explores various types of organizational structures that either already exist in today’s business landscape or are starting to emerge as viable options for the future of work. Each post will explore one of these structures and then I’ll provide a final summary post on all five. These concepts and ideas are taken from my book, The Future of Work: Attract New Talent, Build Better Leaders, and Create a Competitive Organization. The five types of organizational structures that I will explore are:
- The traditional hierarchy (part 1 is already available)
- Flatter organizations (part 2 is already available)
- Flat organizations (part 3 is already available)
- Flatarchies (part 4 is already available)
- Holacratic organizations
Before doing anything else I recommend you listen to this in-depth conversation I had with the founder and creator of holacracy, Brian J. Robertson. The interview will answer a lot of questions that I’m sure you might have about this new and emerging structure. In fact, Brian is speaking at our upcoming Future of Work Forum in NYC from Oct 21–22.
Holacracy started gaining lots of traction after Zappos announced that they would be shifting to this new model of working. The media has picked up on this as a “boss-less” organization which hardly describes what holacracy is about, again check out the podcast link above. There are actually quite a few organizations that have been experimenting with this model but the most known are of course Zappos and Medium. The basic goal with this structure is to allow for distributed decision making while giving everyone the opportunity to work on what they do best. There is still some form of structure and hierarchy but it’s not based on people as much as it based on circles or what most people would think of as departments. Information is openly accessible and issues are processed within the organization during special and ongoing meetings. Now just reading those few sentences certainly makes it seem like “that’s the work should be done,” and I agree.
One of the things I’ve always said about holacracy is that I believe there are ways to achieve some of the desired effects without having to go through such a radical change. It’s sort of like trying to improve the way your car runs by taking out the entire engine and rebuilding it instead of working on some of the core areas that might really drive performance. Sometimes ripping out the engine and starting from scratch isn’t always as an option, especially as the car is moving, like most organizations always are.
For example decentralized decision making is something that doesn’t necessarily require a whole new organizational structure to thrive in. It can just as easily happen in a “flatter structure” that can leverage some of it’s existing infrastructure. It’s not hard to imagine why applying holacracy to an organization of say 10,000 or 50,000 employees around the world might be a bit tricky to say the least. As far as I know Zappos is the largest organization in the world attempting to implement this and they around 1,500 people.
My opinion is that holacracy can be more viable for smaller or medium size organizations or perhaps larger organizations that have started off with holacracy as their base operating model. However, it’s very hard for me to imagine a large organization with tens or hundreds of thousands of employees around the world implementing something like this. Holacracy is still very much an emerging structure with a lot of inserting concepts but we still need more case studies and examples over a longer period of time. Zappos will perhaps give us the best look at what a transformation to holacracy can look like, but I suspect we will need to wait another 2 years to really get a sense of the impact.
This doesn’t mean that organizations can’t apply some of the concepts from holacracy (or in fact any other organizational structure). This doesn’t have to be an all or nothing approach. Brian and I agree that the way we currently work and think about work is fundamentally changing and holacracy is one of the options that companies can explore.
In the next final post, I’ll provide an overview of all 5 structures and a handy visual that shows all 5 of these structures. Stay tuned, and in the meantime let me know what you think about holacracy!
This month’s content on the future of work was made possible by my friends at Work Market. Work Market is a freelance management system that brings freelancers and organizations together. As the freelancer economy continues to grow organizations are going to have to think differently about how they service, innovate, and compete in the future of work.
Jacob is an author, speaker, and futurist. You can learn more by visiting TheFutureOrganization.com
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