In the rapidly changing business circumstances requiring professionals to multitask, overly rigid organizational hierarchies have become an outdated practice. As opposed to hierarchies that maximize unambiguousness in task distribution, holacratic systems use flat organizational structures and emphasize flexibility, including the absence of pre-defined roles and ensuring teams’ increased control over organizational processes. This paper will detail the implications of holacracy for an HR team of a mid-size organization with physical stores referred to as Company X.
Approaching Holacracy Implementation: Principles and Limitations to Consider
Company X has a well-developed large multidisciplinary team and hierarchies in each department, including HR, customer service, production, sales, and advertising. Among the key principles of holacracy is employees’ opportunity to move between teams if they have enough skills for fulfilling functions exceeding the scope of their initial professional role (Somda, 2020). Also, contrary to common misconceptions, acephalous or holacratic structures do not require the abandonment of any corporate hierarchies and might involve dialogue-based and relational rather than top-down leadership (Somda, 2020). For Company X, full holacracy, including active inter-team movement, would be a risky and unrealistic option due to tremendous differences between the departments’ scope of activities and the professional skills that employees should have. Unlike the types of organizations in which all activities are structured around projects, Company X would only be able to make its structure partially holacratic. For instance, it can be achieved by transforming its currently rigidly structured HR team into a self-governing holacratic circle. In this case, experimenting with the elements of holacracy will be rather safe.
There are certain limitations and risks to be considered when transforming the company’s organizational hierarchy. To start with, employees’ long-term habit of receiving and implementing clear instructions from their managers does not change instantly. Therefore, the transformation process should be gradual and involve extensive staff education to ensure the presence of relevant knowledge. Next, from real-life implementation scenarios, such as the case of Medium, holacratic structures can be “difficult to coordinate at scale” (Rolls, 2021, p. 70). The HR holacratic circle will require a well-developed process for data sharing to operate. These considerations should inform the formulation of essential steps and final recommendations.
Steps in Organizational Transformation towards Holacracy: Proposal for Implementation
Step 1: Modifying Staff Education Practices
Within the frame of the first step, Company X is advised to modify its current approaches to HR staff education to foster employees’ flexibility and universal knowledge of the HR management process. The opportunity to engage in peer learning as necessary should also be stressed. Modern research suggests that mandatory coaching and vast training opportunities must be present to ensure holacratic structures’ success (Liebert, 2020). The HR department’s staff education system will need to be structured to prepare every employee for helping colleagues in diverse tasks. Every member of the HR team should have a full picture of how the department operates and manages workforce-related processes during all stages of the employee life cycle. Changing staff induction training for the HR department so that every employee develops skills in five diverse areas is necessary. The areas include staff recruitment, staff training/promotion, benefits/employee compensation, employee relationships/support, and health/safety. Every employee can be allowed to emphasize one or two areas of interest, but minimal knowledge in all areas should be present.
Step 2: Establishing Rules for Self-Organizing Teams and Transforming the Physical Environment
With all-encompassing education for the staff, the HR team should gradually become capable of operating as a series of self-organizing circles formed to comply with different requests from the executive management of Company X. Regular meetings to keep small teams’ work synchronized will be essential to success (Kolkitchaiwan & Chantuk, 2018). Thus, the company should create a space conducive to different kinds of work instead of a series of individual workplaces. This will include a large room for meetings, spaces for group work, and small isolated areas for handling individual employees’ issues in one-on-one conversations.
To prevent severe process organization mistakes, disruptions, and conflicts, the department will preserve some minor elements of top-down leadership and ensure the presence of “links.” The links are experienced subject matter experts that will automatically enter each circle dealing with their main area of expertise, such as recruitment, benefits and financial matters, safety, and so on. Aside from teaching others, the links will make sure that all circle members have access to documents, policies, and standards required for achieving the goal specified by the upper management.
Step 3: The HR Supervisor as an Advisor and a Coordinator
Changes to the HR department’s organizational structure should also involve transforming the department leader’s role and implementing dialogical leadership. Instead of assigning responsibilities in a non-negotiable manner, the leader will be responsible for coordination. This might include incorporating individual employees’ career development plans and communicating the CEO’s requests to the entire department to stimulate the rapid formation of teams to proceed with the task. The supervisor should also support different teams in dispute resolution, including the cases when several employees cannot distribute responsibilities without external assistance.
To sum up, Company X can implement the principles of holacratic management locally to ensure the flexibility of its HR department and foster innovation in employee management practices. Despite the associated risks, the implementation of self-organizing teams will enable HR specialists to acquire universal skills in their areas of practice and better understand their talents and weaknesses. Following the proposed three-step process, the company can promote a smooth transition to self-governed work.
Kolkitchaiwan, P., & Chantuk, T. (2018). “Holacracy” – New flexible management system for 2020? The Journal of Pacific Institute of Management Science (Humanities and Social Science), 4(1), 334-345. Web.
Liebert, F. (2020). Holacracy as a new approach to new product development in IT industry–Case study. Organizacja i Zarządzanie/Politechnika Śląska, 45, 280-296. Web.
Rolls, J. (2021). Self-management: A 21st century panacea? Organization Development Journal, 39(3), 6780. Web.
Somda, Z. (2020). How company leaders successfully implement a holacracy organizational model (Publication No. 27995471) [Doctoral dissertation, Capella University]. ProQuest Dissertations Publishing.