If you’re old enough to remember the days when most PCs ran MS-DOS, consider the leap in capabilities that came with a new operating system like Windows. Your computer’s operating system, invisible though it may be, radically shapes everything on top of it. It determines how the overall system is structured, how different processes interact and cooperate, how power is distributed and allocated between applications, and so on.
Likewise, the social “operating system” underpinning an organization is easy to ignore, yet it’s the foundation on which we build our business processes and organizational cultures.
The traditional top-down, predict-and-control management hierarchy has been the standard organizational operating system for nearly a century. Yet when we unconsciously accept the management hierarchy as our only choice for structuring and scaling companies, we lose the opportunity to innovate in this fundamental domain of company building.
Holacracy aims to improve organizational responsiveness by increasing the number and scope of decisions that can safely be made quickly and locally. It gives staff more authority and autonomy to get work done and drive continual improvements to the organization’s policies and processes.
To avoid increased autonomy coming at the expense of coordination and scale, Holacracy also adds processes to align actions and update expectations and constraints dynamically, which everyone in the organization can take advantage of. This results in a just-in-time, minimally sufficient organizational structure that stays nimble and lightweight, driven by on-the-ground experience from getting work done.
One way or another, whether it’s Holacracy or another approach, the management hierarchy is ripe for disruption. The environment around our companies has changed dramatically since its introduction, and our organizations face new challenges in today’s global fast-moving world.
But those of us building companies today have other options, and regardless of what we choose, I think we’ll be better off by at least asking the question: what power structure is right for my company?