Beyond the Holacracy Hype

Ethan  Bernstein; John  Bunch; Niko  Canner; Michael  Lee

Article | Harvard Business Review | July–August 2016

Beyond the Holacracy Hype: The Overwrought Claims—and Actual Promise—of the Next Generation of Self-Managed Teams

by Ethan Bernstein, John Bunch, Niko Canner and Michael Lee

Abstract

Holacracy and other forms of self-organization have been getting a lot of press. Proponents hail them as "flat" environments that foster flexibility, engagement, productivity, and efficiency. Critics say they're naive, unrealistic experiments. We argue, using evidence from a multi-year research agenda at several mainstream organizations that have adopted these forms, that neither view is quite right. Although the new forms (built upon a half-century of research on and experience with self-managed teams) can help organizations become more adaptable and nimble, most companies shouldn't adopt their principles wholesale. A piecemeal approach usually makes sense. Organizations can use elements of self-management in areas where the need for adaptability is high and traditional models where reliability is paramount.

Keywords: Self-Managed Organizations; Self-Managed Teams; reliability; adaptability; holacracy; organization design; organization structure; organizational design; Organizational Charts; organizational architecture; organizational forms; organizational structure; Organizational Design; Organizational Structure; Organizational Change and Adaptation; Performance Effectiveness; Performance Productivity; Management Practices and Processes; Management Systems; Managerial Roles; Human Resources; Apparel and Accessories Industry; Manufacturing Industry; Retail Industry; Public Administration Industry; Technology Industry; North America;

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Citation:

Bernstein, Ethan, John Bunch, Niko Canner, and Michael Lee. "Beyond the Holacracy Hype: The Overwrought Claims—and Actual Promise—of the Next Generation of Self-Managed Teams." Harvard Business Review 94, nos. 7-8 (July–August 2016): 38–49.

Article | Harvard Business Review | October 14, 2019

The Truth About Open Offices: There Are Reasons Why They Don't Produce the Desired Interactions

Ethan Bernstein and Ben Waber

It’s never been easier for workers to collaborate—or so it seems. Open, flexible, activity-based spaces are displacing cubicles, making people more visible. Messaging is displacing phone calls, making people more accessible. Enterprise social media such as Slack and Microsoft Teams are displacing watercooler conversations, making people more connected. Virtual-meeting software such as Zoom, GoToMeeting, and Webex is displacing in-person meetings, making people ever-present. The architecture of collaboration has not changed so quickly since technological advances in lighting and ventilation made tall office buildings feasible, and one could argue that it has never before been so efficient. Designing workplaces for interaction between two or more individuals—or collaboration, from the Latin collaborare, meaning to work together—has never seemed so easy. But as the physical and technological structures for omnichannel collaboration have spread, evidence suggests they are producing behaviors at odds with designers’ expectations and business managers’ desires. In a number of workplaces we have observed for research projects, those structures have produced less interaction—or less meaningful interaction—not more. In this article we discuss those unintended consequences and provide guidance on conducting experiments to uncover how your employees really interact. That will help you equip them with the spaces and technologies that best support their needs.

Keywords: Buildings and Facilities; Interpersonal Communication; Communication Technology; Design; Human Resources; Performance Productivity; Organizational Design;

Citation:

Bernstein, Ethan, and Ben Waber. "The Truth About Open Offices: There Are Reasons Why They Don't Produce the Desired Interactions." Harvard Business Review 97, no. 6 (November–December 2019): 82–91. View Details

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Nationwide is “on your side,” but did employees feel that way? CAO Gale King and CEO Steve Rasmussen, starting in 2008, invested heavily in a human capital strategy centered around “engagement” at the Ohio-based Nationwide Mutual Insurance Company. Set in 2014, this case tells the story of those efforts to bolster employee engagement as a key part of the company’s strategy to recover from the financial crisis (which it did far more effectively than most of its peers, rising in the Fortune 500 ranking as a result). From 2008 to 2013, Nationwide has seen employee engagement improve from the third to the sixth decile of Gallup’s North American Finance and Insurance workgroup database. The case details the multi-pronged human capital strategy that Rasmussen and King implemented. It concludes by asking students to consider: will a new initiative aimed at moving Nationwide’s dozen brand under a single umbrella jeopardize the culture gains that Nationwide has achieved over the last six years?

Nigel Le Quesne, CEO of Jersey-based financial services firm JTC, firmly believed that "shared ownership" was at the heart of his company’s successful track record. The firm had seen its revenues, profits, and number of clients and staff grow steadily throughout its over 30-year history, and management attributed much of its competitive edge to its culture in which engaged employee owners had fully aligned interests and collaborated for the greater good of the firm. Le Quesne had seeded the first employee benefit trust with some of his own equity when becoming CEO in 1998, making all employees—from the receptionists to top executives—direct shareholders in the firm. Over time, the employee owned equity had grown from 5% to 23% and the trusts created significant value that had already been directly distributed to employees in two past pay-out events. In 2018, after JTC’s successful IPO, Le Quesne and his leadership team have to decide if and how to adjust the shared ownership tools to their new public markets environment.

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Beyond the Holacracy Hype: The Overwrought Claims—and Actual Promise—of the Next Generation of Self-Managed Teams

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