Traditional workplace hierarchies could become a thing of the past. Julian Birkinshaw reports.
Last November, Zappos, the online retailer (and subsidiary of Amazon.com) launched a bold management experiment. Its CEO, Tony Hsieh, announced that the reporting hierarchy and job titles would be abolished, and replaced with a self-organising model called a “Holacracy”. While the details are a bit fuzzy, the essence of Holacracy is that employees are grouped into circles with responsibility for defining how their work will be divided up and who is accountable for what.
Another important feature is that professional development (coaching, reviewing performance, career development) is decoupled from getting-things-done, as these two activities often require different skill sets. This new model, Hsieh argued, will help Zappos become more adaptive to change, and enable employees to become more fulfilled as they take on more responsibility.
Is this symbolic of a broader shift away from traditional hierarchical ways of working?
Certainly, there are fundamental changes under way that are causing us to question the basic principles of management (defined as “getting work done through others”).
First, the emergence of Generation Y, those people born after 1980, is bringing a change in expectations and skill sets. Gen Y employees have different expectations of their managers. They want to be engaged and involved, but they are highly tolerant of uncertainty so are less likely to put up with a dull job or a bad boss because they believe they have other options. The net effect is that your qualities as a manager are more exposed than ever before.
Second, there has been a dramatic increase in transparency. From geopolitical issues (the Arab Spring, Wikileaks) to business scandals (phone hacking, fraudulent accounting) to debates on corporate values (Google, Facebook), the common theme is that nothing is truly secret anymore.
Greater transparency means you can no longer hide behind a wall of “privileged” information. You have to become more tolerant of feedback and better at influencing others through the quality of your arguments. It is harder work, and typically takes longer, but the potential for higher-quality outputs is greater.
Third, there is technology. We all have direct experience of how technology is changing how we process information and communicate with others. But what about the second-order effects of technology on the work of management? Many of the technological innovations of recent years are about helping people become more effective at aligning their activities, problem solving, and sharing information – the sorts of things managers used to do.
So the more pervasive these new technologies become, the more time managers have for their real value-added work – motivating employees, structuring work to make it more engaging, developing their skills, securing access to resources, and making linkages to other parts of the organisation.
Take these three points together, and you can see that social and technological changes are clarifying and sharpening our role as managers. When employees can get all the basic support for their work through technology, the real qualities of the line manager are exposed. And when employees have more freedom to choose, and greater expectations that their work will be interesting, managers have to raise their game to earn the respect of those around them.
We will always need managers – but we can become much smarter about defining what they do.
Julian Birkinshaw is a Professor of Strategy and Entrepreneurship, Chair, Strategy and Entrepreneurship Faculty at London Business School. He is also an Academic Director of the Deloitte Institute of Innovation and Entrepreneurship.
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