It's an interesting experiment, but two tendencies of human nature prevent this sort of thing from being conducive to running an efficient company, in my opinion.
One, having everyone in the company able to make executive decisions or at least influence them sounds great, but inevitably more outgoing and charismatic workers will gain influence, even when it's a supposed democracy. You can structure the system to have all the meetings and groups and power structures you want that seem equal on paper, but when someone is popular and outgoing often people will follow with that person. There are going to be people who slip into leadership roles--it's human nature, and trying to minimize that instead of steer it is impractical in my opinion.
The second thing is that having everyone in on the decision making is simply information overload in most cases. I think tasking everyone with being informed and voting on a wide array of things will make them either pretend to know all the issues properly and vote uninformed, or they'll vote the way they see their favoured peers voting. Maybe I'm letting my own experiences cloud my opinion here, since I work at a company that has a fairly flat managerial structure, but it's certainly a problem for me. If they're making executive decisions while not seeing what other ways the company is moving, that seems bad too.
I think there's definitely merit in promoting equality among employees, and it leads to better teamwork. But I just don't think that end of the extreme ever works particularly efficiently, and I think human nature tends to influence most companies toward the more normal business hierarchies.
I think this really hits the nail on the head. Hierarchies are human nature, and if you don't have explicit, well defined ones then you will end up with murkier and less defined ones. The biggest difference being that forcefulness of personality has much more of an impact on informal hierarchies than formal ones.
It sounds great, but I wouldn't be surprised if they'll end up with all sorts of informal fiefdoms. What do you do when your informal boss is abusing their power? How do you take action to remove power from someone who never officially had it?
These concerns make sense if we assume that they have no processes. My understanding is that they are using holocracy, so there are defined processes each with leaders (like boards with a chair) and these process are organized in a hierarchy that allows some to be overridden/replaced/reformed by boards with more central power. So, people can and should try to have many roles but will naturally get pushed out of things where they lack time, knowledge or trust, and not everyone is involved in every process or is allowed to nominate themselves to be involved.
I was at a conference and sitting in an open space about leadership when I came to an epiphany: 'You hear of organisations that are management heavy all the time, but you never hear of organisations being leadership heavy'.
I worked in a place that became leadership heavy. They gradually were losing business and kept bringing in more executive-level "heavy hitters" to hopefully turn things around.
In reality what happened was that every one of them that was hired was made to think they were the silver bullet and now that they were there, everything would turn around, as long as we did things their way.
Well, you get a few executives on board who are in theory all on the "same level", all thinking they are the silver bullet, and all thinking that things need to be done their way and you can imagine the epic power struggles that ensued.
Hierarchy is not only there for 'telling X to do ABC', but also to make clear who takes responsibility. If there's no leader, who's responsible for decisions taken? A random person who happens to be in a team who did something which turned out to be very stupid? All of them? No one? When a decision is made by X, the people who execute it didn't decide on it, X did, which means X takes responsibility, not the people who execute the decision.
Another aspect which is overlooked in the article is: to get things done, you have to make unpopular decisions sometimes: i.e. cut features to make a deadline, to ship a version, to stop adding stuff and work towards a release. No-one wants to make those, they're called 'unpopular' for a reason. But you have to make them to avoid a state where things aren't ready and never will be. There's a difference between 'being able to ship' and 'being able to ship a usable product'.
Funny that they refer to Valve with the text:
> At the video-game maker Valve, new employees are told not to expect instructions, because even the managing director “isn’t your manager,” says the employee handbook. “You have the power to green-light projects. You have the power to ship products.” And so they do.
I could point to the 20.000 years of human history and challenge you to find the opposite: a single completely flat organisation/enterprise with more than one individual, that for a non trivial amount of time exhibited progress, growth and financial success. I can't think of one.
Challenge me, to come up with something, why? You were the one doing the assertion, so you should be prepared to be challenged and answer, not challenging back.
You said that a given notion/idea is against human nature; the burden of proof is yours. Do you have any scientific support for that claim? What definition of "human nature" are you following? Even relating to the very limited historical accounts you were trying to assess, how can you be sure it's "human nature", not "human culture"?
I'm sure you're thorough and rigorous in your field of expertise, and don't accept "claims" blindly. I'm just asking for the same standards in other subjects. No need to be frivolous just because the subject is human behaviour.
I was expressing my opinion, as it should be clear from my comment and the challenge to find a counter-example to my argument is called proof by contradiction.
There's nothing in your statement "it is against human nature" that would imply that it was just an expression of your opinion. You stated it as clearly as possible, yet you have no basis for this. It's very sad to see the standards drop so low when the discussion regards human behaviour; it borders on religious faith. People believe X regarding human behaviour in the same way other people believe in baby jesus.
> the challenge to find a counter-example to my argument is called proof by contradiction.
I don't think "proof by contradiction" means what you are "expecting", really. Look it up. You'll see why and how fallible it would be as a method for human and social sciences.
I've read "On Human Nature" (not any of the others, though). I'd say that there's nothing there which would imply that ideas proposed in the link shared by the OP are "against human nature".
Counter-argument: the justification given for Holacracy is that generally in life groupings of people aren't structured in that way. The example they give is that in a city there are no bosses, everyone choses a career, looks for work, finds accomodation, etc, independently. The mayor isn't your boss. This is of course the foundation of capitalism: free agents.
Cooperation is one of the pillars of markets, because markets are based on exchange. A buyer and seller cooperate to make an exchange.
Coase's question was: why don't we see the free market structure that linear algebra predicts? Why do firms exist?
His answer was fairly insightful. Markets impose search and transaction costs. To buy something from a market, you must search it for a seller and come to terms.
Inside a firm, that search cost may well be zero. Need HR services? Call HR. No need to look for a provider, negotiate a contract and so on. Need IT? Ring the support department. No need to weigh the virtues of IBM vs HP vs the corner store.
But sometimes it's the other way around. Need pens? In some companies the process is so onerous that you'll just go to the local store and buy your own.
That boundary moves around (consider the impact of IT, for example), but it's always there. If search and transaction costs fall to zero, the firm would in theory become unnecessary.
Comparing a market -- or a city -- to a firm is a mistake, because they are different structures emerging from different pressures on the same free agents.
"Boss" is often too restrictive as a word. You can call it "leaders", "spiritual guides", "representatives", whatever, but they exist in a hierarchy.
Even though the individual is the indivisible element of a society, we as individuals inevitably take part in different organisations (financial, political, religious). In each of these more or less spontaneous organisations we assume a role and in some of these roles we will make decisions for several people.
The mayor is the elected leader, chosen by a majority, to make these decisions for us in a certain scope. You can't challenge his decisions on your own. If you don't like them, you either try to have someone else elected the next time or move elsewhere.
If you are catholic, the pope is also not our "boss", but boy does he have the power, legitimacy and support to influence a lot of people in arguably one of the most successful organisations to ever exist.
>If there's no leader, who's responsible for decisions taken? A random person who happens to be in a team who did something which turned out to be very stupid?
Blame-shifting doesn't always happen, but when it does, it almost universally goes down the hierarchy, not up.
Almost universally? Got any examples that show this almost universal attribute? Off the top of my head, from the past couple of months alone, I can think of the VW CEO, Ellen Page (reddit's former CEO) who were ousted from their companies for decisions that didn't go over well.
We should probably put a “*” by Pao since, as far as I know, we’re not sure if she was actually responsible for the decision that ostensibly got her ousted.
When there's a big enough controversy, the CEO will usually be one of the first heads to roll even as there are larger investigations going on (BP/Deepwater Horizon is a great example of this).
In one notably hierarchical organization, the US Navy, blame certainly travels up. Captains who have been off-watch and sound asleep when a subordinate did something wrong can find their careers ended.
This is also the primary reason why their customer service is so terrible. Nobody wants to do this 'unpopular' job. They'd rather work on their on stuff.
I also wonder at requiring that new hires spend at least one week in the call centre during their induction. They might not know what they need at that point!
Also, I wonder: didn't Valve used to have a normal hierarchy years ago? You know, back when they used to ship stuff? I'm genuinely curious to find out if that's the case. If that's true, then it seems that Valve only "stalled" after adopting this company structure.
Holacracy is all about distributing authority out to the furthest nodes of the company. "Decisions are made locally." Employees take up well defined roles, and AIUI are generally responsible for both making decisions and implementing them. Of course there are also meetings, I'm sure in practice many decisions are made with consensus.
> to get things done, you have to make unpopular decisions sometimes
...but I have no idea how this works in Holacracy.
I tried to go without assigning bosses on my R&D engineering team, a group of about 8 people, and I did this for about six months. I thought these are creative smart types and don't really need a boss. But after time I found, without bosses, people do crazy stuff, like sit at their desk for two days without internet/email access and just not tell anyone about it or ask for help to fix their issue. Now, all teams have a report and that just works better.
If a guy has sat at their desk for two days without internet/email access and didn't tell anyone about it or ask for help, you can hardly blame the infrastructure team for not fixing a problem they weren't told about.
The problem is either a cultural one within the team (if he was scared to ask colleagues for help) or an induction one (if he didn't know how to ask for help, or didn't know he had to) or a communication one (if he had no way to contact infrastructure or anyone on his team) or a motivation/expectation setting one (if he felt like taking an in-office vacation, or that nobody would notice or mind if he did nothing) or a hiring one (if he didn't know what a computer was, or he was being intentionally uncooperative as some sort of protest against his own job)
All those problems are things I'd expect a competent line manager to address.
On the communication one: I work for a large pharma company that switched from physical phones to VOIP through Lync. Well they sent an email a week in advance and updated Lync, but the update required a user to sign in again. I had many people ask me what to do, but the other wisdom floating around was to call our IT help line. Without Lync, we can't make calls to fix Lync.
On the communication one: I work for a large pharma company that switched from physical phones to VOIP through Lync. Well they sent an email a week in advance and updated Lync, but the update required a user to sign in again. I had many people ask me what to do, but the other wisdom floating around was to call our IT help line. Without Lync, we can't make calls to fix Lync.
Worth reading "The Tyranny of Structurelessness". It's from the 70s and is specifically about the women's movement, but is applicable to these kinds of discussions.
Whenever you have a flat hierarchy, informal structures will arise in place of explicit ones.
"A "laissez faire" group is about as realistic as a "laissez faire" society; the idea becomes a smokescreen for the strong or the lucky to establish unquestioned hegemony over others. This hegemony can be so easily established because the idea of "structurelessness" does not prevent the formation of informal structures, only formal ones."
100 times this. Eliminating structure just transfers the heavy lifting to informal mechanisms -- i.e. your "culture." No culture is sufficiently well-defined that everybody has a consistent definition of it, meaning you will inevitably have a situation where 2 people are doing directly contradictory things in the name of the company culture. The whole situation at GitHub from a few years ago with a founder's wife running reckless is a perfect example of this.
Ultimately there are probably non-hierarchical models that allow for effective and interesting coordination in certain types of small organizations (viz the Kibbutz), but Holocracy seems like it's replacing Shit Umbrellas with Shit Centrifuges.
Holacracy actually has way more structure than a hierarchy. Just look at the constitution (http://www.holacracy.org/constitution), or read about the rigid way they conduct meetings.
None of the recent articles have mentioned it but hollcracy is a American commercialized edit of Sociocracy aka Open Governance (https://en.m.wikipedia.org/wiki/Sociocracy).
The analogy would be how Scrum was created as a commercialized revision of Agile XP.
A key tenant is the rights of each circle (team/committee) to actively chose how it will make decisions, and it's free to use systems such as voting or putting someone "in charge", but it also has a bunch of innovative decision making approaches that achieve much better buy in and are based on achieving consent as opposed to consensus. It's the difference between, 70% of people are on board so we are going ahead regardless of what the rest think. And we'll we've heard from everyone and even those that have stated publically to try rest of the group that they have concerns they are no longer blocking "paramount" concerns and we are united in our agreeance to go ahead.
2. The few people who want to make decisions, do it only for their personal gain. Deciding for stuff they like or they just like the prestige a decider-role brings.
I ended up in such roles, because I know 1. can be a big problem and before nothing happens, I just tell people what to do.
And I often quit jobs, because of 2. and the bigger the institutions get, the more of 2. you get.
Furthermore, there's a good filter in place for the kind of people who can succeed on the 'down' end of the Boss interface. It's usually a college degree or work history of some sort. There's no good filter for the kind of people who are able to actually make decisions. I mean, you might be able to recruit from some particularly agent-y community, or design a test based off of constructive developmental theory, but good luck with all that.
To the many people who say "this will never work": luckily, we don't have to theorize abstractly about "human nature" and can just go look at successful non-hierarchical organizations. Frederic Laloux describes the practices of 12 of them in the 2nd and 3rd parts of his wonderful book Reinventing Organizations (http://www.reinventingorganizations.com/). Still some very new ideas, but these organizations have enough interesting properties that we should really explore how to make them work.
I appreciate their optimistic counterpoint, but some of the challenges Zappos have created for themselves -- how do you exactly keep "earning badges" a fair and representatives measure of an employee's worth? -- will be difficult and challenging to overcome.
Hsieh is asking a lot of his employees. I hope it ends up being worth the confusion and anxiety being generated for the entire workforce there.
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[ 7.2 ms ] story [ 141 ms ] threadOne, having everyone in the company able to make executive decisions or at least influence them sounds great, but inevitably more outgoing and charismatic workers will gain influence, even when it's a supposed democracy. You can structure the system to have all the meetings and groups and power structures you want that seem equal on paper, but when someone is popular and outgoing often people will follow with that person. There are going to be people who slip into leadership roles--it's human nature, and trying to minimize that instead of steer it is impractical in my opinion.
The second thing is that having everyone in on the decision making is simply information overload in most cases. I think tasking everyone with being informed and voting on a wide array of things will make them either pretend to know all the issues properly and vote uninformed, or they'll vote the way they see their favoured peers voting. Maybe I'm letting my own experiences cloud my opinion here, since I work at a company that has a fairly flat managerial structure, but it's certainly a problem for me. If they're making executive decisions while not seeing what other ways the company is moving, that seems bad too.
I think there's definitely merit in promoting equality among employees, and it leads to better teamwork. But I just don't think that end of the extreme ever works particularly efficiently, and I think human nature tends to influence most companies toward the more normal business hierarchies.
It sounds great, but I wouldn't be surprised if they'll end up with all sorts of informal fiefdoms. What do you do when your informal boss is abusing their power? How do you take action to remove power from someone who never officially had it?
In reality what happened was that every one of them that was hired was made to think they were the silver bullet and now that they were there, everything would turn around, as long as we did things their way.
Well, you get a few executives on board who are in theory all on the "same level", all thinking they are the silver bullet, and all thinking that things need to be done their way and you can imagine the epic power struggles that ensued.
Did not end well.
Another aspect which is overlooked in the article is: to get things done, you have to make unpopular decisions sometimes: i.e. cut features to make a deadline, to ship a version, to stop adding stuff and work towards a release. No-one wants to make those, they're called 'unpopular' for a reason. But you have to make them to avoid a state where things aren't ready and never will be. There's a difference between 'being able to ship' and 'being able to ship a usable product'.
Funny that they refer to Valve with the text:
> At the video-game maker Valve, new employees are told not to expect instructions, because even the managing director “isn’t your manager,” says the employee handbook. “You have the power to green-light projects. You have the power to ship products.” And so they do.
I'd like to mention 'Half Life 3'. ;)
You said that a given notion/idea is against human nature; the burden of proof is yours. Do you have any scientific support for that claim? What definition of "human nature" are you following? Even relating to the very limited historical accounts you were trying to assess, how can you be sure it's "human nature", not "human culture"?
I'm sure you're thorough and rigorous in your field of expertise, and don't accept "claims" blindly. I'm just asking for the same standards in other subjects. No need to be frivolous just because the subject is human behaviour.
> the challenge to find a counter-example to my argument is called proof by contradiction.
I don't think "proof by contradiction" means what you are "expecting", really. Look it up. You'll see why and how fallible it would be as a method for human and social sciences.
Standards? I think you are being a bit too hard on yourself and us. These are just comments on a web forum.
Exercise for the reader: If Holacracy is taking a pure free market as its model, why not just dissolve the company?
Hint: look up Ronald Coase.
Coase's question was: why don't we see the free market structure that linear algebra predicts? Why do firms exist?
His answer was fairly insightful. Markets impose search and transaction costs. To buy something from a market, you must search it for a seller and come to terms.
Inside a firm, that search cost may well be zero. Need HR services? Call HR. No need to look for a provider, negotiate a contract and so on. Need IT? Ring the support department. No need to weigh the virtues of IBM vs HP vs the corner store.
But sometimes it's the other way around. Need pens? In some companies the process is so onerous that you'll just go to the local store and buy your own.
That boundary moves around (consider the impact of IT, for example), but it's always there. If search and transaction costs fall to zero, the firm would in theory become unnecessary.
Comparing a market -- or a city -- to a firm is a mistake, because they are different structures emerging from different pressures on the same free agents.
Even though the individual is the indivisible element of a society, we as individuals inevitably take part in different organisations (financial, political, religious). In each of these more or less spontaneous organisations we assume a role and in some of these roles we will make decisions for several people.
The mayor is the elected leader, chosen by a majority, to make these decisions for us in a certain scope. You can't challenge his decisions on your own. If you don't like them, you either try to have someone else elected the next time or move elsewhere.
If you are catholic, the pope is also not our "boss", but boy does he have the power, legitimacy and support to influence a lot of people in arguably one of the most successful organisations to ever exist.
Don't get hung up on the "boss" word.
Blame-shifting doesn't always happen, but when it does, it almost universally goes down the hierarchy, not up.
https://www.reddit.com/r/OutOfTheLoop/comments/3df50e/why_do...
> to get things done, you have to make unpopular decisions sometimes
...but I have no idea how this works in Holacracy.
The problem is either a cultural one within the team (if he was scared to ask colleagues for help) or an induction one (if he didn't know how to ask for help, or didn't know he had to) or a communication one (if he had no way to contact infrastructure or anyone on his team) or a motivation/expectation setting one (if he felt like taking an in-office vacation, or that nobody would notice or mind if he did nothing) or a hiring one (if he didn't know what a computer was, or he was being intentionally uncooperative as some sort of protest against his own job)
All those problems are things I'd expect a competent line manager to address.
Whenever you have a flat hierarchy, informal structures will arise in place of explicit ones.
http://www.jofreeman.com/joreen/tyranny.htm
"A "laissez faire" group is about as realistic as a "laissez faire" society; the idea becomes a smokescreen for the strong or the lucky to establish unquestioned hegemony over others. This hegemony can be so easily established because the idea of "structurelessness" does not prevent the formation of informal structures, only formal ones."
Ultimately there are probably non-hierarchical models that allow for effective and interesting coordination in certain types of small organizations (viz the Kibbutz), but Holocracy seems like it's replacing Shit Umbrellas with Shit Centrifuges.
It reminds me of common rules of order, except untested by the courts and not covering the many, many permutations of motions that can arise.
I'd just be inclined to use Robert's Rules or a local equivalent. Meeting procedure works very well, when you use it correctly and consistently.
[1] http://highscalability.com/blog/2015/10/7/zapposs-website-fr...
The seminal text is "We the People" (http://www.amazon.com/gp/aw/d/0979282705/ref=mp_s_a_1_1?qid=...) [no affiliate]
The analogy would be how Scrum was created as a commercialized revision of Agile XP.
A key tenant is the rights of each circle (team/committee) to actively chose how it will make decisions, and it's free to use systems such as voting or putting someone "in charge", but it also has a bunch of innovative decision making approaches that achieve much better buy in and are based on achieving consent as opposed to consensus. It's the difference between, 70% of people are on board so we are going ahead regardless of what the rest think. And we'll we've heard from everyone and even those that have stated publically to try rest of the group that they have concerns they are no longer blocking "paramount" concerns and we are united in our agreeance to go ahead.
Scrum was developed independently of, and is quite distinct from, XP.
I saw two problems there:
1. Most people don't want to make any decision.
2. The few people who want to make decisions, do it only for their personal gain. Deciding for stuff they like or they just like the prestige a decider-role brings.
I ended up in such roles, because I know 1. can be a big problem and before nothing happens, I just tell people what to do.
And I often quit jobs, because of 2. and the bigger the institutions get, the more of 2. you get.
Hsieh is asking a lot of his employees. I hope it ends up being worth the confusion and anxiety being generated for the entire workforce there.