Why CEOs Must Relinquish Power And Job Descriptions Are Dead

Why CEOs Must Relinquish Power And Job Descriptions Are Dead

Not since McKinsey’s classic Structure Is Not An Organisation and their seven model back in the 1980’s has anything profoundly different emerged in the organisation design and structure space until now.

Nancy Hromin
Posted by Nancy Hromin

The SXSW blurb caught my attention along with about 80 or 90 of my fellow SXSWers “the traditional management hierarchy, the dominant force in organisations for the past century was not designed for the fast paced, interconnected world we live in today… Holacracy is an alternative – a complete, scalable system for structuring a company without a traditional management hierarchy but with more clarity, accountability and agility”.

If we all think about our own personal experiences about power and structure and how it really works in organisations, we can all relate to the first two slides that Robertson started his session with: The first one, below is a traditional management hierarchy.

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And then to the cattle of laughter the following slide of “How Power REALLY works in organisations”:

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Once the hilarity subsided, I was left with that cringe worthy feeling similar to the experience of watching Ricky Gervais in the office series. This guy is onto something.

Robertson, a successful software engineer who experimented with this form of structure and order with his own company, spoke passionately about this new way of organising small or large groups of people to achieve the company’s overriding purpose. Then came the clanger – The CEO MUST be prepared to relinquish his or her power. A few people left then (this is a very normal SXSW thing, by the way. Get up and leave if you lose interest. It feels really rude and must be unnerving for the presenter but it certainly keeps them on their toes to deliver really good material)

I was reflecting on my own group of client CEOs and how prepared would they be to relinquish such vast amounts of power to a Holacracy constitution and I think he has a hard sell ahead of him. Having said that, his idea is compelling.

In summary this is what a Holacracy is comprised of:

  • A constitution: The organising structure is fundamentally around the work, not the people. The overriding question is what do you need to fulfil the purpose of the organisation? This constitution documents the core rules, structure, and processes of the Holacracy “operating system” for governing and managing an organisation.
  • A governance process: Every team engages in a process of who expects what and who will do what. There are no job descriptions – each person has a purpose and five or six  accountabilities they commit to delivering on.
  • Operational Rules: What autonomy do you have and limits of authority? Traditionally, you may need explicit authority to do something but in this form the authority is encoded with rules.

It all sounds rather like organisational nirvana – freedom, autonomy, and knowledge of limits, distribution of power, order, and so on.

And so as Robertson reached the end of his presentation, he said his publisher kindly sent him a box of about 20 advance copies of his book, which is not due for release till June to give out at his session.

I scanned the room and realised there were 70-odd people that would want those 20 books and so I waited patiently till he called for questions (knowledge of limits), and then got up (new found freedom and autonomy to act) walked to the front and collected a book. Within a millisecond, I created a stampede to the front of the room. We are all equal, but the fastest are more equal than others.

Holacracy – The New Management System For A Rapidly Changing World published by Henry Hold NY will be released in early June 2015.

Nancy Hromin is at SXSW and can be contacted at nancyhromin@culturezone.com.au