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Self-management represents a positive evolution in the way organizations are managed. Also referred to as Distributed Leadership, and  as one of the key elements of ‘Teal’ organizing systems, it promises to harness creativity, agility and resilience in organizations by distributing authority and responsibility more evenly. It has been seen to work extremely well in a few exemplars. But is it for you? Would it be worth the investment in your organization?

My experiment with distributed leadership

Having spent almost one year working in a small self-managing organization, I now have quite clear opinions about the value of this cutting edge organizational operating system, and who can benefit from it.

Over the past year, I spent about half my time as a Co-Founder of a start-up venture in the field of clean technology. From the beginning, we committed to using Holacracy,  a system that provides all the structures required for efficient and effective self-management, also called distributed authority, which is customizable to any organizational size and purpose. Having been inspired by the promise of self-management systems, I wanted to experience how it works. It was an unforgettable experience which now allows me to see through the hype and into the reality of self-management.

The system of Holacracy

Holacracy is designed to hold an organization to the ideals of the latest breakthroughs in organizational success. Frederic Laloux’s 2014 book Reinventing Organisations created a sensation in the world of organizational development by spotlighting a number of large, highly successful organizations that have used system breakthroughs to create extraordinary results. These very special organizations operate with management systems that distribute authority much more efficiently than typical hierarchical or matrix organizations. These systems align the organization’s work around a purpose which adds value to society, and goes beyond just creating profit for share-holders. These two breakthroughs together have vast power to engage employees and harness the diverse creativity of work-forces to grow into highly agile and resilient enterprises.

Holacracy was invented over a period of years and has now been codified in such a way that any organization can adopt it, building on the structure and support provided by the consulting partnership HolacracyOne. In a sense, all the hard work has been done, and now any organization can capitalize on this very valuable organizational foundation. At least, that what it looks like on the surface.

Holacracy is like a crucible: a pot which heats metals to high temperatures in order to purify them. Embarking on a journey into Holacracy is an ordeal that tests the maturity of the organizational leaders, in particular, their willingness to trust in their people and the system of checks and balances, no matter what.

This is an inevitable aspect of any journey into self-management, and not a particular feature of Holacracy. The Holacratic system is simply a structure that holds individuals to a certain set of behaviours. It’s like wearing braces on your teeth to correct your bite. The braces do their job, but not without soreness.

The organizational system changes us

Since most of us are familiar with normal hierarchical or matrix organizational structures, we tend to accept them, warts and all, even if we may do it cynically at times. We don’t realize how much the organizational structure changes us. We don’t speak out, or even think about ideas we know our bosses don’t agree with, or issues that seem to threaten the money-making purpose of the organization. We lie low when it benefits us, and we use all the tricks in the book to dodge the system when it serves us. It’s like the old line about democracy: it’s terrible, but there’s nothing better.

A system changes the individuals within it. If you work in a Holacracy, you’ll find some things you absolutely love about it, and other things that make you uncomfortable. That’s because the system is designed to hold both sides of all the paradoxes that are required to make organizations function. We want freedom and we need discipline. We want flexibility and we need consistency. At first people may revel in the empowerment, but soon they’ll realize that they also need to be responsible. Where a corporate system allows you to hide, make power plays or just be cynical, Holacracy holds you to a higher standard, and that is uncomfortable.

The leadership prerequisite

“A company without managers” is the accusation. In fact, a Holacracy requires everyone to take the role of managing themselves and each other. By removing layers of management, a Holacracy can presumably eliminate many roles to be much more efficient. But a Holacracy will also require more coaches and trainers for leadership development, conflict resolution and time/priority/task management. As a coach myself, this type of investment is very attractive. It is teaching an organization to fish, rather than having managers supply the fish –the ability to collaborate, be agile, be creative, be responsible, work towards a purpose. Self-managing or not, organizations need more of those qualities.

Organizations considering adopting a self-management system will need a sufficient proportion of inspirational leaders who are able to sustain the commitment to the paradoxical qualities of distributed authority. Thanks to advances in adult development research, it’s possible to assess the developmental level of leaders quite accurately and efficiently. This assessment would reduce unpleasant surprises and support continuing development aligned with the needs of the leadership team in successfully enacting the self-management system.

Paradoxically, leaders who are mature enough to operate successfully in a Holacracy will already be operating in ways that capture much of the benefit of self-management. Great managers delegate fully, nurture trust, share information, build collaborative teams and motivate towards greater purposes that instill deeper engagement and more sustainable results. These are the leaders who may relish the opportunity to work in a system that supports and even leverages their leadership capacity, rather than a typical corporate structure that tends to frustrate and block the full potency of post-heroic leaders.

Self-management or not?

In summary, the choice to invest in a self-management organizational operating system depends on the level of maturity of your leadership team, plus your willingness to invest in the development of your whole organization. Those who follow this route successfully in these early days of post-heroic leadership are deeply committed to the evolution of their organizations. Are you one of them?