Holacracy or Holacrazy – The New Horizontal Organizational Development Model

Traditional management theory has it that the best way to achieve an organization’s goals is to invest one person with nearly all of the decision-making power. The wisdom of this vertical, top-down approach to management and organizational development models is being questioned by businesses as big as Zappos, the online shoe and clothing store, which is embracing a more horizontal form of office leadership.
Zappos Organizational Development Model
Photo courtesy of EricaJoy(CC ShareALike)

Holacracy and Horizontal Leadership

A holacracy is a fresh way of running a company. Holacracies downplay or remove entirely the management hierarchy that many of us associate with an organization’s management structure. No longer is there a king ruling from atop a throne with unlimited power and murky transparency. In a holacracy, power is distributed among employees according to clearly defined professional responsibilities, and there are no micromanaging superiors to worry about. With holacratic organizational development models,  roles and responsibilities aren’t set in stone and can change to match changes in customer expectations or economic exigencies.

Greater Flexibility and Diversified Leadership

What’s important to realize upfront, though, is that holarchies don’t substitute monarchy with anarchy by getting rid of traditional management and top-down hierarchies. Rather, holarchies establish rules for the ways in which teams divvy up their work while still defining each role within those teams with high expectations. Holacracy.org has established a constitution to be adopted by modern businesses – version 4.1. There’s still accountability and an emphasis on measurable results with a more horizontal, holarchy-based management system; a holacracy distributes authority among teams and roles, however, rather than people (i.e., a top-dog manager or senior leadership team). Horizontal approaches to management also allow for much more flexibility since holarchies are updated more continuously than traditional management roles. By basing authority more on roles than people per se, holacracy offers individual employees more leadership opportunities, chances at career advancement, and a feeling of autonomy. Lastly, one huge advantage that horizontal, inclusive leadership has over traditional, top-down management styles is that the former allows for greater transparency. This means that in a holacracy every team member has to follow the same overarching rules while heeding expectations in line with his or her ever-changing roles.

Horizontal Leadership In Practice

Some companies in recent years have purported to subscribe to a horizontal system of leadership, yet many companies merely provide lip service to the concept while retaining vestiges of traditional management. This is to say that many companies talk about fostering leadership among all of their employees while still clinging onto rigid job descriptions, top-down delegated authority, and an organizational structure that is seldom (if ever) updated to fit a changing economy.

Zappos and Holarchy

The CEO of Zappos, Tony Hsieh, is a counter example of someone who’s put all of his chips down on holacracy’s ability to continually motivate and inspire his employee base. One challenge for Zappos and other large organizations wanting to hop onto the horizontal-leadership bandwagon is that juggling so many roles while maintaining transparency can prove challenging. To combat this challenge, Zappos has embraced a piece of organizational development software known as Glass Frog in order to store and organize all of the business’ overarching policies, ever-changing roles and expectations. Speaking of changing roles and expectations, one thing that Zappos’ employees love about the horizontal form of leadership is that it empowers (a word frequently used by Tony Hsieh) them to think beyond rigidly defined job descriptions. The rate of tech turnover in our economy is more than a metaphor for the fact that organizations need to stay on top of opportunities…or miss out. Taking on aspects of horizontal leadership that combine flexibility and autonomy with accountability and empowerment are what a changing economy requires of companies to remain competitive.