The latest big idea in management deserves some scepticism

4. July 2014

Date: 03-07-2014
Source: The Economist: Schumpeter
Subject: The holes in holacracy

EVERY so often a company emerges from the herd to be lauded as the embodiment of leading-edge management thinking. Think of Toyota and its lean manufacturing system, say, or GE and Six Sigma excellence. The latest candidate for apotheosis is Zappos, an online vendor of shoes and clothes (owned by Amazon), which believes that happy workers breed happy customers. Tony Hsieh, its boss, said last year that he will turn the firm into a “holacracy”, replacing its hierarchy with a more democratic system of overlapping, self-organising teams. Until Zappos embraced it, no big company had taken holacracy seriously. Indeed, not all of Zappos’ 1,500-strong workforce are convinced that it can work.

The idea was invented in 2007 by Brian Robertson, a software engineer then in his late twenties. Holacracy’s “constitution” is now on version 4.0, having been adjusted after feedback from the 200 or so mostly small firms that have adopted it. Mr Robertson was inspired in part by a description of holarchy in a 1967 book, “The Ghost in the Machine”, by Arthur Koestler, a Hungarian-British intellectual. Koestler argued that the brain is made up of holons that are autonomous and self-determining yet also fundamentally dependent on the brain as a whole. In a similar spirit, Mr Robertson says that the whole that is a firm should consist of overlapping “circles”, each a team of employees who have come together spontaneously around a specific task. Read the rest of this entry »


Julian Birkinshaw:New business opportunities are rare.

13. July 2009

from MLab:

We agree that exciting new business opportunities are rare. Given this fact, companies can choose to cast the net wide in search for such opportunities, but at signifi cant cost – both in terms of actual expense incurred as well as the opportunity cost of not focusing properly on the existing core business. Alternatively, companies can take a much more selective approach, as Andrew proposes, but with a risk that exciting opportunities get screened out early. Would Dixons have launched Freeserve using Andrew’s traffi c light approach? Would Carphone Warehouse have launched Talktalk? It is impossible to draw defi nitive conclusions here; we have to accept that there are risks with whichever approach is followed. (Andrew responds: “Both Freeserve and Talktalk were the result of ‘good old fashioned strategic planning’ rather than ‘net casting’. Freeserve would have passed the Traffi c Lights (Dixons was one of the companies in my research), but Talktalk would probably not. So having a tough screen does sometimes cut out opportunities that subsequently prove successful.”) Read the rest of this entry »


Stefan Stern: In search of the entrepreneur within

13. July 2009

from the “Financial Times”

Where some see only gloom right now, entrepreneurs see opportunity. As the risk averse withdraw, braver business leaders will step forward. An enthusiastic special report in The Economist in March 2009 anticipates a new golden age for entrepreneurship, declaring it an idea whose time has come. Its “triumph” is already assured. But when chief executives and other senior managers look within their organisations, do they see a lot of (frustrated) entrepreneurs waiting eagerly to put ideas forward? Somehow I doubt it. Even if they do, how comfortable are business leaders with the idea of encouraging, still less investing in, new ventures at a time like this? Read the rest of this entry »