There’s a growing backlash against structuring companies using a management hierarchy. They’re slow, rigid and at their worst, de-humanising. But the alternatives can be unhelpfully chaotic and lead to death by consensus or the watering down of a single ambitious vision.
The new wave of organisational operating systems like Holacracy aren’t the answer. They replace one organisational dogma for another and force everyone to work in a particular way whether it suits them or not.
The solution lies in creating truly self-managing organisations. Everyone working toward a single vision, clear responsibilities and diverse ways of collaborating. The route towards self-management starts not with organisation design, but by mapping the creative structure underpinning the organisation. This means getting clear on how the overall vision breaks down into smaller ideas that contribute to it; who is responsible for what and who is helping who.
When you think about work in this way, the need for formal organisation is dramatically reduced. You can create a culture of responsibility and focus while remaining creative and collaborative.
Let’s dive into the problem, alternatives, and the best approach I’ve seen to level up from management hierarchies.
There’s nothing more dynamic in business than a startup with a very small team. Everyone knows what everyone else is up to; you can easily involve people in decisions; and you can turn on a sixpence when you discover a better direction.
Between six and 13 people, the growing pains kick in. No longer can you run things completely informally. It gets harder and more costly to get the whole team together in one meeting. Involving everyone in every decision isn’t practical or desirable. People lose track of who’s responsible for what, and accountability becomes a problem.
This is the moment where leaders realise they need some kind of structure to manage a growing, more complex organisation. The default solution is to start creating a management structure and enforcing systems and processes on people. Some people are elevated to positions of authority and responsibility for work, and a rulebook is created.
But do this and you risk sleep-walking into becoming a rigid bureaucracy as you grow. Before you know it, you’ll have VPs, heads-of, and legions of junior and senior this-that-and-the-others. And bosses. Lots of layers of bosses.
The problem with management hierarchies
Leaders don’t create management hierarchies because they’re dumb. They offer lots of benefits. Management hierarchies can scale to hundreds of thousands of people and you can control outcomes better than in unstructured anarchy. Yet there are dangers:
- Management hierarchies create internal competition because as you go ‘up’ there are fewer jobs available. The focus becomes about looking good and impressing superiors more than on satisfying customers and helping to realise the vision of the company.
- Decision-making slows down as people wait for instructions to filter down from above, or for their requests for permission to be processed and approved. The conditions for people to naturally step up and take more responsibility are stifled. Instead people have to wait and hope for a promotion.
- They create ‘silos’ where people in different parts of the organisation don’t talk to each other and the company becomes disjointed. Collaboration between people in different areas is weak.
- When leaders realise a particular structure is no longer fit for purpose, the processes of re-organising can take years, is hugely costly, and takes resources and attention away from developing and delivering your products and services.
- And of course there are just too many bad managers making life hell for those working for them. Bad management is one of the most common causes of good people leaving a company.
Pace and agility matter and we need to get the best out of people, so it’s no wonder that more and more business leaders are getting frustrated by management hierarchies. Yet without some kind of structure, an initiative can fizzle out or descend into confusion and lack of accountability.
Inspiration from progressive alternatives
The alternatives can be mysterious. There are famous case studies from companies like W.L.Gore, Valve Software, Buffer, Semco, Spotify and Buurtzorg. Yet adopting someone else’s model is never as easy as it sounds. None of these companies have perfected it and they have been at it for years. Many of them were different right from the start and just seem to have different DNA. What works for them won’t necessarily work for you.
Into this mix there are buzzy new organisational operating systems offering solutions. Holacracy is the most famous although the Holacracy poster child, Zappos, appears to have been struggling for years with its implementation. Even though it offers a very different operating model which might well be great if you can get everyone using it, there’s still a big, top-down organisation change project needed to get there. And of course, the expensive consultant costs and fall-out from disaffected employees that come as part of the bargain. Zappos has lost 18% of its workforce during this process. You simply can’t expect a diverse group of people to all want to work in exactly the same way. Replacing the dogma of management hierarchy with the dogma of Holacracy doesn’t appear to be the answer.
I’ve battled with this problem for 15 years, both in companies I’ve either started myself or acted as an advisor to. So let me share the best answer I’ve found.
Mapping the creative structure
When we think about organisations, our default is usually to do this in terms of their formal artefacts: the official organisation chart, shareholdings, directorships, job titles and roles, processes and policies, reporting lines and so on. Those are useful things to understand, but they shouldn’t be the starting point. Instead, the trick is to focus a layer deeper than the formal organisation.
Buried underneath all of the organisation stuff you will always find an initiative. An initiative is an ongoing creative process of realising an idea or vision in the world (hence, when we talk about ‘taking the initiative’, we mean that somebody has decided to take responsibility, of their own volition, for making something happen.)
An initiative to realise a vision can also be broken down into ever more specific ideas which are being realised in service of the overall idea. You can draw it out using concentric circles, which is called an initiative map. Here’s a portion of the initiative map for a company.
Using the map, you can see how ‘Developing the brand’ is helping with ‘Designing and building the Maptio product’ which in turn is supporting the highest-level vision: ‘Supporting purpose-driven leaders to realise their ideas’.
If you also record specifically who is responsible for each part, and who’s helping them with it, you have a map of the whole creative structure underneath the company. If you zoom right out you can see how the whole initiative fits together, with all of the more specific ideas contributing to the big vision.
The power of focusing on initiatives over organisations
If you get the initiative map super clear, then the formal organising becomes much easier because you have a real understanding of the creative process that you are trying to enable. You find the need for formal structure is greatly reduced.
It means you don’t get lost in organisation design work and lose sight of the creativity that is trying to be unleashed. And you can find ways to organise that support, not get in the way of the initiative.
All of this makes it many times more likely that the overall vision will actually materialise.
How to create an initiative map
The key to initiative mapping is getting out of design mode. This is often a challenge for organisation designers who love applying design thinking, but it’s actually a very natural thing to do. Mapping doesn’t try to change the landscape, but document what’s there.
You do this by talking to everyone and asking what they have stepped up to take responsibility for, all the way from the founder or whoever is responsible for the overall vision, to people taking responsibility for much more specific elements. The essential things to find out for each responsibility are:
- Who exactly is responsible? Always one person. If multiple people are responsible then in practice nobody is responsible. And you should acknowledge the person who is naturally responsible – the person who took the initiative for that part, or their natural successor if they’re no longer around.
- What’s the idea? Think of this like a creative brief for everything happening in that area. It could be a one-liner or a page to describe what’s in and out of scope.
- Does this responsibility fit within another? In other words, by realising this idea, is it contributing to a higher level idea?
You can use this information to draw the initiative map of the creative structure underpinning the organisation. Draw it on a whiteboard or if you want to go digital you can use the tool from Maptio to easily create, update and share initiative maps like the ones above.
Nurturing responsibility and creative flow
Just having the initiative mapped out in this way can change behaviour and start to ease some of those growing pains. When people can see how everything makes a contribution all the way up to the big vision, the company becomes less confusing, more aligned, motivated, and better focused.
Having an individual’s name attached to each part naturally encourages people to take responsibility and be more accountable.
With the initiative mapped accurately and shared with everyone, the need for formal structure is drastically reduced because everyone knows who’s responsible for what, who’s helping who, and how the whole puzzle fits together.
This frees up time and resources which would otherwise be devoted to ‘management’ activities for a much more productive use: simply helping people to do the best job they can. Leaders (and remember, everyone can behave like a leader) can ask colleagues what they need help with. Sometimes they’ll be helping someone else to realise part of the vision they are responsible for, and other times they’ll be the one asking for help.
There’s still plenty of room for using new working practices to generate good ideas, organise, and keep on top of the work itself, but the key difference to a uniform organisational operating system like Holacracy is that it’s up to whoever might be working on something to decide how they do it. If a particular group of people want to operate using Holacracy then great, let them use it, but don’t force it top-down on the whole company.
If you do need some degree of management, then make it in service of the creative structure. Don’t get lost in thinking that ‘the company’ or ‘the organisation’ is the main thing. Instead, keep asking, who am I helping? And what’s the vision for this part?
If you overcome your growing pains in this way you’ll be on the path to becoming a more purposeful, more creative, and focused company.
Credits: My interpretation of initiative mapping, and the term itself is based on original work by Charles Davies, and influenced by Peter Koenig. Thanks to Agnes Otzelberger, Ana Marica and Perry Timms for their feedback in producing this article.