Are leaders really needed in organizations?

Leadership. Is it really essential to have leaders in an organization? Over the past few decades, there have been companies that have removed titles. There are no CEOs, presidents, or managers. In some cases, there are no individual owners. Employees own the business. In today’s business model, some call it holacracy.

Holacracy, also known in some circles as Holawhat is a business model that flattens organizations. “Holacracy was invented by Brian Robertson, a 35-year-old former programmer with little management experience. He created Holacracy in 2007 because he had a” burning feeling that there has to be a better way to work together, “he said in an interview with Fast company. “

Zappos is one of the companies that Holacracy adopted. Zappos CEO Tony Hseih issued an ultimatum to all employees. They must either hug Holacracy or leave. He even offered three months of severance pay to those who left voluntarily.

With Holacracy, they have eliminated the managers. They work in circles. Each circle is responsible for specific results. While there is a leader for each circle, they do not have a title. Also, circle members don’t just request resources through their circle leader. There is usually a leadership committee.

With 4,000 employees, Zappos is the largest company to take over Holacracy. Other companies such as Medium and David Allen Company are also advocates for Holacracy.

In Sweden, there is a 40-person company called Crisp that has invented its own version of a flat organization. Like the Holacracy concept, Crisp has structured the business with self-organizing teams. Part of that structure includes eliminating the CEO. After three years of implementing this structure, they have achieved great success and a tremendous amount of media attention.

It seems that the goal of Holacracy and flattening the organization is designed to increase collaboration and employee engagement. Out of frustration, a few select companies have reportedly eliminated CEOs, managers and positions. A $ 2.6 billion construction company has even joined. The company is DPR Construction. “DPR was founded in 1990 by Doug Woods, Peter Nosler and Ron Davidowski. Today Nosler and Davidowski are on the company’s board of directors, while Woods is on a seven-person management team.”

Perhaps the true story is that command-and-control leadership has died. In the past, companies grew out of an agrarian society. Aside from merchants, people were not used to self-organizing teams in an industrial capacity. Therefore, managers were needed to dictate the productivity of work. Also, because people often came directly from working in the fields, they had not developed factory skills. At the very least, they had not transferred the teamwork skills they had developed working on a farm. As a result, layers of managers were needed to control labor and production.

In a knowledge society, people’s intellectual capital is part of their productivity. While people still complete work with their hands, what has become valuable is their brainpower to find more efficient ways to produce results.

However, even in the Holacracy or so-called flat organizations, people look for informal leaders. They need mentorship and people to make the final decision when there is a deadlock. They need to know your career path when it comes to raises and promotions and still seek guidance when they are stuck. These structures are often lacking or ambiguous in the Holocracy or in flat companies. As a result, “Zappos has suffered that nearly a fifth of the staff is unable or unwilling to cope with the pressures of self-management.” It seems that Holacracy has been more successful in smaller companies. The Medium company has about 90 employees. Except they haven’t generated income yet.

All that said, it may not be about creating complicated organizational structures. In interviews with Fast company“All the confusing rules and terminology tend to scare people, but that’s intentional. The obscurity, says Robertson, is part of a strategy to hook the right converts.” My approach to sales is trying to convince people not to, “he said. Holacracy’s website does not make it easy to understand what a company might be getting into. The” plain English “version of the Holacracy Constitution it’s several mouse scrolls long. “

Maybe it’s time to start seeing companies as people. Remove people and there are no employees or customers. Therefore, it is advisable to establish organizational structures built by people for people. As much as Holacracies and flat organizations try to demonize and eliminate leaders, they have proven that they are still needed. In some organizations they still exist, with informal titles. They still serve as the person with the most responsibility or experience. Rather than imposing complexities that no one understands, empower people to use their intellectual capital to create self-reliant teams. Part of the way to do this is to engage them in transformational exercises first. It is usually best to have someone from the outside guide you through a journey that changes the prevailing mindset. With a new mindset, people find it easier to make changes on their own. More importantly, if they make the changes themselves, they will be and will make it part of the corporate culture.