The Dream of Holacracy: Managed by None, Accountable to All

Zappos is trying to shatter the corporate structure. But what happens when peer pressure replaces the corner office?

Illustration by Cierra Pedro

Illustration by Cierra Pedro

Avid Googlers may have noticed that May 12-14 was National Small Business Week, marked by a small-font shout-out under the Google search bar: “Here’s to the dreamers, doers, shakers and makers. Happy Small Business Week.”

Since more than 80 percent of American private-sector jobs are in companies with 20 or more workers, the sad majority of working stiffs are apparently not dreamers, doers, shakers or makers; but rather, slogging cogs in the big corporate machine.

One perk of being cogs in the machine is that we have our own system and language. We use top-down, military-inspired, hierarchical management, and we speak with buzzwords: “reach out,” “send it up the flagpole,” “drill down,” “paradigm shift,” “corporate restructuring,” etc. Vast chunks of knowledge have been lost in this wordy bureaucracy throughout human history, but we can write that off as “collateral damage.” See how this works?

As addicting as the lingo is, fewer people these days announce their intention to “climb the corporate ladder” now than in, say, the ’80s, when to do so meant prestige and a reliable retirement plan. In today’s self-branding work world, it’s better to designate yourself a “disrupter” or a “thought leader” and get a high-bandwidth angel or a group of leaning-in venture capitalists to buy into your vision and bridge-finance you until the roll-up.

It sounds great. And sometimes, that’s the point. It’s not that the growth-oriented, stock-focused corporate structure is likely to disappear soon. It earns too much for too few to let it crumble into little accountable groups of makers and shakers. But we can rearrange the way we speak about it and the way we think about our own relationships within it. We can rebrand.

To that end, I had at least two serendipitous encounters last week: First, I had a fun conversation with Lisa Shufro, the Downtown Project’s “Magical Awesomeness Catalyst,” about organizational structure, or social technology. Second, I read an interesting article on the history of corporate-speak in The Atlantic. Yes, I count reading articles among my serendipities.

So anyway, I reached out to Shufro to discuss a paradigm shift in operating cultures called “Holacracy.” It’s a management system that’s been implemented at Zappos and the Downtown Project and which has created buzz because, as and said, it has no bosses. That’s right: No managers.

Fearing that the emperor has no clothes, and knowing that Zappos CEO Tony Hsieh’s philosophy of encouraging serendipitous encounters already screws with the time-honored division between work-life and home-life, I asked Shufro to talk me off the bleeding edge.

“What about accountability?” I said from my home office. She explained that it wasn’t really about having “no bosses” per se. “The best things about Holacracy, which is a language—think of it like a code, like HTML, a structure by which we communicate—is that it trusts and empowers people to leverage themselves,” she said.

I’m not going to lie: I didn’t get it right away. I had to think about that while she kept talking, which is a skill I perfected while sitting in hundreds of bureaucratic meetings. In Holacracy, I think she said, each person is accountable to “lead links” in “circles” of colleagues, rather than to “managers” or “supervisors” in “departments” or “divisions” … or teams or tribes. And instead of struggling under the authority of the watchful eye in the corner office, Holacracy empowers workers by letting them not-struggle under the watchful eye of the whole group—borrowing from the perceived autonomy and transparency of the Internet and modern mass media.

“Peer pressure is a really powerful force in history,” Shufro said, and then she said something about layers of circles and hiring practices and information exchange, and something about a circle called “connectedness” that “embraces research and development and focuses on ‘how we manifest connectedness.’”

Right then, I heard the old factory whistle blow, and I clocked out.