Holacracy

On Monday this week I published a blog post on the subject "HR vs. Innovation."  My intent was to start drawing comparisons between current, but outdated Human Resource Management practices, and the rapidly changing, fast-moving technological revolution that we are currently witnessing and experiencing.

Most documented HR ‘Best Practices’, HRMS/HRIS technology, and almost all HR management teachings provided by academic institutions… are no longer relevant!  In very simple terms, one of the primary reasons is that "work is not where you are, but what you do."

Exceptions to the above are limited to bureau-style processes that haven’t changed much over time, albeit that they have become more automated, like gross-to-net calculation technology engines (e.g. payroll), compensation, pension and benefit enrollment/tracking systems, etc.  Commonly outsourced processes!

Just a few days after I had posted the blog article referenced above, the Huffington Post published an article with a similar message, entitled “2014: The Year Of Workplace Reinvention.”

The new HR buzz word is Holacracy.

John Bunch, spearheading this initiative at Zappos, explains:

“Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15 percent. But when companies get bigger, innovation or productivity per employee generally goes down. So we're trying to figure out how to structure Zappos more like a city, and less like a bureaucratic corporation. In a city, people and businesses are self-organizing. We're trying to do the same thing by switching from a normal hierarchical structure to a system called Holacracy, which enables employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do.”

During a career spanning two decades as a sales manager, with some success achieved along the way, I used to tell ‘new recruits’ as first order of business, that I viewed them as a “franchisee.”   I - as the franchisor - had delivered a turnkey business opportunity for the mutual benefit of both parties.  Then, I allowed them to manage their franchise.  After all... both parties had made a significant investment!

I obviously knew what my budgeted cost was on a per-employee basis.  I would be required to equip them with the tools required for success, and then empower them to deliver against our expected return on investment.  I was acutely aware of the fact that once fully loaded, the lost opportunity cost of absenteeism, under-performance, etc., was as much my problem as theirs.  Hiring is more expensive than firing!

However, as mentioned in my previous post, adequate performance should be rewarded with a generous severance package.  Unfortunately today, hiring managers are often bureaucrats at the top of a pyramid that the corporation should be severing ties with!  This is especially true if a modern-day manager still thinks that his/her role is to manage people (as per Bunch: "...tells them what to do")... instead of working!

Additionally, it’s important for managers to understand that once they become a manager, they have agreed to work for their employees, and not the other way around.  Both parties work for the corporation.  The manager’s primary responsibility is to remove the barriers and obstacles that may prevent their direct reports from achieving success.  In this equation, think carefully: “Who is working for whom?”

My direct reports and I were like foot soldiers, representing the company.  Every day we would go out, conquer, and bring back some bounty… new sales orders, business development opportunities, competitive knowledge, new talent we should hire, industry requirements/changes, etc.

Holacratic organizations are organized in circles. Workers are members of several circles, depending on what they are working on at the time.  Decision authority is distributed throughout the organization, with everyone focused on the core purpose and strategy.

Earlier in my career I wasn’t aware of holacracy… who knew?  I must admit though, it feels great to be ahead of the curve, albeit occasionally!  Feel free to connect directly if you would like to arrange a workshop for your HR team, or if you need help transforming your organization.