This blog first appeared on The Economist’s Executive Education blog here. The author, Laura Montgomery, is a higher-education expert who blogs for The Economist Careers Network.
Top-down hierarchies are out, creative and collaborative structures are in. This approach to management is starting to become a new norm in the startup world. But can we expect this trend to gain significant traction in the mainstream corporate realm anytime soon? Could the CEO go the way of the dodo?
Innovation and disruption are the key ingredients for a successful fast-growth startup venture – as well as for any established enterprise wanting to keep pace in a quickly evolving competitive ecosystem. Today, even historically traditional organisations are starting to study the flexible structures found in startups in order to facilitate a capacity for change and nimbleness. Taken to its greatest extreme, the pursuit of an endlessly agile, flexible structure would theoretically result in abandoning traditional management hierarchies entirely.
Seeking the startup’s secret sauce
Indeed, the concept of “holacracy”, invented by software executive Brian Robertson and most famously implemented by Zappos, calls precisely for this. An organisation practicing holacracy “removes power from a management hierarchy and distributes it across clear roles, which can then be executed autonomously without a micromanaging boss.” Comparable structures, based around employee self-management and team-based accountability, can be also found at companies such as Morning Star and W.L. Gore (Gore-Tex products).
The move toward these flat, democratic management structures is rooted not only in a goal to replicate the success of the startup economy. They are also the result of an evolution in the way leadership itself is defined. “In much of Western culture, leadership has been psychologically associated with status and power,” explains Shaun Johnson, co-founder of the Startup Institute and a current entrepreneur-in-residence at Georgetown University’s McDonough School of Business. “However, true leadership is actually about servitude and being able to put organisational success before your own personal triumphs. These bossless structures are meant to foster a more authentic model of leadership throughout an organisation.”
Still a phenomenon of the fringes
But while these companies make for fascinating case studies, real-world results of holacracy and other bossless structures have been mixed. And oftentimes the approach can produce more questions than answers. How do you determine whether employees are doing their job properly? What recourse do you have if they’re not? How do you establish hiring and compensation policies? And, of course, how will you ever find the CEO willing to introduce a management model that would essentially make their own title and authority obsolete?
“It’s still something practiced only at the bleeding edge of management circles – nowhere near becoming a mainstream phenomenon,” says Johnson. Yet, even if “bosslessness” isn’t a panacea for survival in the innovation economy, there is a broad spectrum of democratic management approaches that organisations can experiment with. Company-wide collaboration, transparency, accountability, productivity, and the most efficient and effective use of employee resources: these are some of the core goals and values of the democratic workplace. Goals which organisations today have the opportunity to address through any variety of means – bossless or not.