Self Manage Or Leave It

In the last week of March this year, Tony Hsieh, the CEO of Zappos sent a (very) long memo to his employees. The gist of that 5000+ words memo? Self-Manage or Go Away! (my words not his)

I know, I know - that title looks so much like a click-bait, but believe me - that's the only line that came to mind when I read Tony's memo to his employees. (I actually read it three times in the last two months) For those who have heard yet, Zappos had been in the news for adopting Holacracy in a big way, with it's "adapt-adopt-or-else" stand.

It's effectively a purge of the non-believers and I see it as another example of the uncharacteristic brilliance and bold views that Tony has. (Remember the $2000 to quit offer for new hires?) The memo itself is long and touches on several important aspects but there is one thing that the memo spells out without saying it in so many words.

The disengaged employees can't survive any longer in the organization: In an environment that requires you to self-manage, being engaged, being in tune with the organizational pulse, knowing the big picture and the relevance of ones current project all becomes critically important. Those who hide behind other team members or just do the bare minimum and pass on the responsibility to 'someone' higher up the chain will find themselves rapidly (and brutally) isolated in such a setting.

Empowerment is one of the most powerful means of engagement. Numerous surveys have shown that employees state dissatisfaction with their immediate supervisors as one of the top reasons for leaving their company. So does that imply that getting rid of managers and hierarchies will lead to substantially increased levels of engagement?

The jury is still out on that one. Google had in the past tested that particular hypothesis and found that managers were indeed critical. (See related post) There are organizations that keep creating layers in the name of efficiency and consolidation only to realize down the line that all they have is a bunch of people who keep passing the buck around.

We have been experimenting organization structures almost every since organizations as we know them today came into existence. Starting with simple structure of a CEO and workers in the pre-1880's, we had the functional structure till about the 1920's or so where different functions were created for efficiency. Then came the Multi-divisional structure, followed by the SBU structure, the Matrix structure, the Network structure and then a whole lot of experimentation with Flat structures. Of course there are lots of organizations who believe they are in one of the more complex and dynamic structures while in fact falling to the temptation of centralized command-control and actually regressing back in the name of efficiency. These structures however don't quite align with what Tony is doing - in fact he seems to be ripping them all up and going "all-flat" flat-out (pardon the pun).

To me Holacracy seems to be a logical extension to the configurations that Henry Mitzberg outlined in his 1981 classic paper "Organizational Design: Fashion or Fit?" Mintzberg had talked about five configurations: Simple Structure, Professional Bureaucracy, Machine Bureaucracy, Divisionalized Form and finally Adhocracy. Each of these represented a different configuration of the five basic parts of the organization as he saw it: Strategic Apex, Middle Line, Operating Core, Techno-Structure and the Support Staff.

The two important aspects as one moved from Simple Structure to Adhocracy were (a) The means of coordination and (b) the key part of the organization. Adhocracy is inherently defined by a lack of formal structure. Popularized by Alvin Toffler in his book 'Future Shock', Adhocracy is characterized by adaptive behavior and adjustment between various teams.

Holacracy aims to go further and do away with things like Job Descriptions and Re-orgs thus creating an organization with transparent rules, roles and distributed authority. Absolute empowerment without having the correct rule-book and training in place would be akin to pushing a novice swimmer off the deck of a ship mid-ocean. The concept is radical and holds the potential to be a game-changer. As with everything else, execution will be critical. To that extent, asking the non-believers or fence sitters to leave is a smart thing to do. You don't want casual beach-goers at an Olympic swim-team training session.

Only time will tell if Tony and Zappos sink of swim with this radical move. I am sure a lot of us will be watching very closely with fingers crossed.

So what do you think? Do you think implementing Holacracy in your organization will enable it to scale new heights or do you think it will lead to disaster? Let me know in the comments section below.

The author, Prashant John, is executive director of Kwench

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