Does Management Hierarchy Help or Hurt When You Have to Adapt Rapidly to Changing Circumstances?

Updated: Oct 1, 2021

by Lynn Hinderaker, Organizational Strategist, Growth Dynamix Consulting



What if Amazon approached your company and offered to pay you $847 million dollars 24 months down the road to buy your firm...but with one proviso: you had to agree to create a dynamic workplace where everyone has a voice and bureaucracy doesn’t stifle innovation....?


A place where 'having fun' is a core value that is written into the company code.


If you own a company and are struggling during this pandemic wind-down period to attract high skill workers or get employees back into the office, you will want to pay close attention to this essay.


At Zappo's (now owned by Amazon, purchased for $1.2 billion), this means traditional corporate hierarchy is gone. Managers no longer exist. The company’s 1,500 employees define their own jobs. Anyone can set the agenda for a meeting. To prevent anarchy, processes are strictly enforced. For instance, in order to run a meeting, trained facilitators, ask attendees to “get here, get present, get now,” and encouraged everyone in the room to briefly check in.


This organizational system is called 'holocracy' and most observers either love it or hate it. Some people celebrate these “bossless,” “flat” environments for fostering flexibility and engagement or denounce them as naive social experiments that ignore how things really get done.


Why does 'self management' even need to exist? Because heavily matrixed reporting structures that surround and link employee teams often hem them in and thwart their effectiveness - especially their ability to think up new ways to serve the client or get from A to Z.


RELIABILITY AND ADAPTABILITY

When you’re an executive, it isn’t easy to know the right balance of reliability and adaptability—and even if you do, it’s hard to get an organization to perform accordingly. Hence the keen interest in having organizations “feel their way” toward the desired balance through self-management.


Here are some circumstances in which it makes sense to blend the newer approaches with traditional models or organization and project management.


In a self-managed operation, members share accountability for the work, authority over how goals are met, discretion over resource use, and ownership of information and knowledge related to the work.


Companies that have embraced this formula include, Morning Star, a maker of tomato products; Valve, a developer of video games and gaming platforms; W.L. Gore, a highly diversified manufacturer; and, of course, Zappos.


The key insight into Zappo's-style self management is that the organization should be responsive to the requirements of the work rather than to the directives of any powerful individual. Traditional management goes wrong when the boss gets to prescribe what must be done—or how—because of a job description, not because he or she has particular insight into what will produce the desired outcome.


“All living things contain a measure of madness that moves them in strange, sometimes inexplicable ways. This madness can be saving; it is part and parcel of the ability to adapt. Without it, no species would survive.”

The final conclusion is if your industry changes rapidly and new competitors spring up from nowhere, your key to success is adaptability - which is self management's strong suit.


If your industry is driven by reliability and predictability (such as retail banking or the sales and installation of utility poles), self management won't work.


For greater clarification, simply ask, "How much 'glue' do we require internally to meet expectations? How much hierarchy and process do we really need?




For assistance in attracting employees and revitalizing your company culture, contact Growth Dynamix at 402-208-5519 to evaluate their ability to help.


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