Commentary by Dr. Whitesel: Holacracy explains the long-term cohesiveness created by emphasizing small teams or small groups within an organization. But this article also explains why diversity (silos) and cohesiveness (silos remaining under one organizational umbrella) creates a healthier organization. Read this important article on the organizational behavior of holacracy with diversity amid unity.
by Greg Satell, Harvard Business Review, AUGUST 28, 2015.
When Alfred Sloan conceived the modern corporation at General Motors, he based it on hierarchical military organizations. Companies were split into divisions, each with their own leadership. Authority flowed downwards and your rank determined your responsibility.
Today, a few organizations – like Medium, David Allen Consultants, and Zappos – are adopting a radically different, approach to management: holacracy. Even as someone who has studied alternative management movements, I’ve been skeptical about holacracy, which eschews the standard “org chart” for a system of interlocking “circles.” To understand it better, I recently sat down with Brian Robertson, author of the new book Holacracy, to figure out how he’s gotten hundreds of firms to sign on.
For all of the sturm und drang surrounding the idea, as we talked I realized a lot of holacracy is just codifying many of the informal elements of good management. By getting beyond the particulars of adopting holacracy and taking a deeper look at the issues it addresses, we can see that problem isn’t that hierarchies have somehow become illegitimate, but that they are slow and the world has become fast. Instead of making the leap to an entirely new form of organization — a radical change not without its pitfalls — perhaps we should think more seriously about the problem of agility itself…
How do you balance cohesion and diversity? It’s become fashionable in management circles to talk about “breaking down silos” in order to improve how information flows around the enterprise. Yet we need silos, which are cohesive units that are optimized for specific tasks. What’s more, the reorganization efforts that are supposed to break down silos invariably recreate them in different places.
What’s really important is to balance cohesion and diversity. Without cohesion, there is no common purpose, but without diversity groupthink will set in and eventually that purpose will lose relevance. So you need a healthy amount of both in order to be able to both operate efficiently and adapt to new information in the marketplace.
A study of Broadway plays shows this in action. Researchers found that if no one in the cast or crew had worked together before, then results were poor. However, if there were too many existing relationships, then performance suffered as well. Traditional organizations often inspire far too much conformity — but I suspect holacracy and models like it will only exacerbate the problem because, ironically, its reliance on informal ties rather than dictates make conformity that much more insidious.. In hierarchical organizations — whatever their failings — leaders can change direction and combat groupthink. It’s not clear to me how that kind of change would happen in holacracy, which is driven by informal relationships to a much greater extent…