Why managers are in danger of extinction

By Neil Patrick

A headline caught my attention this week that the online retailer Zappos, now owned by Amazon is in the process of removing managers and all job titles from its structure. Instead, the traditional top down hierarchy is to be replaced by a series of self-governing circles.

You can see the original news post by Jena McGregor on the Washington Post website here.

To quote from the original article:

"... this gives employees more of a voice in the way the company is run.

According to Zappos executives, the move is an effort to keep the 1,500-person company from becoming too rigid, too unwieldy and too bureaucratic as it grows.

“As we scaled, we noticed that the bureaucracy we were all used to was getting in the way of adaptability,” says Zappos’s John Bunch, who is helping lead the transition to the new structure. The company has become a force in online shopping as it expanded beyond shoes into apparel, housewares and cosmetics.

The holacracy concept is the brainchild of management consultant Brian Robertson, a serial software entrepreneur who says he launched the idea after realizing he was “more interested in how we worked together” than in his own job. The concept has a couple of high-profile devotees — Twitter cofounder Evan Williams uses it at his new company, Medium, and time management guru David Allen uses it run his firm - but Zappos is by far the largest company to adopt the idea.

At its core, a holacracy aims to organize a company around the work that needs to be done instead of around the people who do it. As a result, employees do not have job titles. They are typically assigned to several roles that have explicit expectations. Rather than working on a single team, employees are usually part of multiple circles that each perform certain functions."

This may be a portent of a much more general trend I think and here’s why:

Hierarchies prioritize command, control and consistency...and are slow Traditional hierarchies have been used for centuries to organize all sorts of human endeavors from military operations to the manufacture of goods to the delivery of public services. But I think we should at least consider alternative styles of structure for some organisations in the 21st century. For a start, a rigid hierarchy just cannot respond fast enough in a world where customer interactions are measured in seconds and minutes, not hours and days. Which is preferable for the consumer – a uniformly average service or one in which they feel perfectly satisfies their individual needs at that moment?

Businesses must reflect the nature of the environment in which they operate. We all know that digital media doesn’t work in a top down fashion. It’s the most democratic form of media ever created. And it scales laterally. Influence is gained or lost not by the endorsement of our superiors, but by our peers. The organisational corroborative of this isn’t a flat structure, it’s a democratic one. If we accept this, then why shouldn’t teams of professionals working together be able to choose who has authority in any given situation?

Hierarchies stifle dissenting voices AND suffocate innovation. A hierarchy ensures that positional authority trumps specialist expertise every time. Sometimes this is for the greater good. Sometimes it creates dissent, frustration and resentment. Depending on the culture and individuals involved, it can also lead to a clamping down on innovative thinking as responsibility for direction is always deferred upwards.

Hierarchies are too slow for consumers. Customers hate slow service and slow decisions. When you are trying to serve consumers, you are always going to have a minority who for whatever reason are unhappy. Whether their complaint is justified or not, the one thing you must do is act fast. And that means that your staff must be empowered to do whatever is necessary to rectify the problem without the delays imposed by referral up the hierarchy. The converse is that if your organisation is hyper-adaptable to customer feedback, you’ll be more agile and better able to capitalise on what they are telling you.

For these reasons, I think that the idea being implemented at Zappos, shows some real vision and genuine merit. It’s not without weaknesses too of course. Where does accountability rest in this model? If decisions are made more or less democratically, who ensures that the decision is consistent with the wider strategy of the organisation? For sure there are lots of operational practicalities to be ironed out.

But I do think this may be a glimpse of the future.

What do you think? I’d welcome comments below.

1 comment: