Getting Rid of Managers Is a Bad Idea That Just Keeps Getting Worse

I’ve said it before and I’ll say it again: Business fads predicated on eliminating managers are a bad idea.

I know, I know — Zappos has generated a lot of media attention for embracing “holocracy” and getting rid of managers, and others have tried it too, but with the exception of W.L. Gore, the maker of Gore-Tex, virtually nobody has had much success or stuck with it long term.

Holacracy.com makes the case that holacracy is “a new way of running an organization that removes power from a management hierarchy and distributes it across clear roles, which can then be executed autonomously, without a micro-managing boss.” 

Well, I get that and I get the appeal of eliminating micro-management, but if it is such a great system, why do we hear so few success stories among those who have embraced it?

As a longtime manager, the notion of getting rid of managers seems to be a cross between Lord of the Flies and a Monty Python skit. Somebody needs to be in charge, and in my long experience, self-managing teams only lead to frustration for everyone. Eliminating managers seems to be one step away from anarchy.

I bring this up — again — because of a story recently about Treehouse, a Portland, Oregon-based online education company that embraced holacracy and got rid of its managers with great fanfare back in 2013. As the Portland Oregonian notes:

It was a radical experiment in empowering employees, giving workers the authority to propose their own projects, manage themselves and evaluate each other. It didn’t work.

After two years, Treehouse scuttled the experiment. Chief executive Ryan Carson said employees felt adrift, “lonely islands with no support.” And so he made the painful decision to reverse course and install a traditional management structure.

“We were naïve,” Carson said in a recent interview. “It was hopeful.”

As Treehouse found out, they got by without managers when the company was small (it employed 61 in 2013 when it embraced holacracy), but CEO Carson said it became a problem when they grew to more than 100 workers. Projects went unfinished, Carson told The Oregonian, and there was no one to hold workers accountable.

Good companies understand that they need good managers to be successful, and Zappos, the company that is the poster-boy for holacracy, also found out as Treehouse did that it can be a real struggle when employees try to manage each other.

Here’s what I wrote last year about Zappos and this bossless office fad:

Holacracy, and other similar systems, sound wonderful in the same way that communism sounds wonderful if you simply remove the human element from them. Problem is, humans don’t make group decisions all that well. Someone — anyone — needs to be the final arbiter if you ever want to get something decided and keep things moving ahead.

The notion of a “bossless” office is a great trend story, but count me as totally unconvinced that it actually works except in a handful of odd places. As quickly as the world is changing, I somehow doubt that it is changing so fast that we can eliminate having people in charge.”

By the way, The Oregonian story on Treehouse quoted Portland State management professor Berrin Erdogan, who pointed out that although research shows that organizations perform better with fewer layers of management and a culture that empowers employees, the no-boss approach can be counterproductive when taken to the extreme.

“Eliminating managers altogether assumes that managers add no value, and I don’t agree with that,” Erdogan said. “Good managers add great value.”

Wow, there’s a concept — managers adding value to a business. Wonder how all those holacracy advocates missed that?

FOT Background Check

John Hollon is an award-winning journalist and a nationally recognized expert on leadership, talent management, human resources, and smart workforce practices. For the last six years, he worked as Vice President for Editorial at ERE Media where he founded the highly popular HR and talent management website TLNT.com. Before that, he was Editor-in-Chief of Workforce Management magazine, the nation’s oldest HR and talent management publication. During his 30-year career, he has also held editing positions at the late Los Angeles Herald Examiner and California’s Orange County Register. He was the top editor for Gannett at two statewide papers—the Great Falls Tribune in Montana, and The Honolulu Advertiser in Hawaii. He also has deep experience in magazine and online publishing, having been a Group Editor and Editorial Director at Fancy Publications in Irvine, Vice President for Editorial at Pets.com in San Francisco, and Editor of the San Diego Business Journal. In addition to his work as an editor and media executive, John is also an adjunct professor in the College of Communications at California State University, Fullerton.

2 Comments

  1. The fallacy in your argument is that you are focusing on the fad of Holacracy, but not studying the history of self-management. All of the data – all of it – is on the side of every company being self-managed. There is no data that supports the continued propagation of the classic, top-down Factory System hierarchy.

    Holacracy is dead on arrival because it is not self-management. It is a system; self-management is a principle. It is a pre-finished system (like a Factory System machine) that is then imposed on the staff for them to decide to run, or not run, just like in the factories. It assumes people don’t have the smarts to develop their own self-management system.

    There are many myths about self-management. Self-management has been in place successfully in dozens of large corporations (Gore, Semco, GE Aviation, The Morning Star Co., Nearsoft, many others), and thousands of smaller ones like ours, for 65+ years. it is not new, is not a fad, is not industry or size specific, and leads to better, more organized companies with faster growth, higher profits, higher productivity, and exponentially lower turnover. Wegman’s has 3% turnover in an industry with 35% turnover. Semco’s is 1-2% against 30%+ average.

    Most companies aren’t self-managed, not because the data doesn’t support it, but simply because those that would have to institute it are the very people who feel threatened by it – managers. What they don’t see is that self-management would be better for the company, the staff, and the investors, and in my opinion, the managers, who would find more productive ways to contribute to companies than solving and deciding for perfectly capable adults,

    Managers make people stupid and lazy, they don’t show up that way – it’s a self-fulfilling prophecy. That’s why Gore can have 10,000 self-managed people without a mangers in the company – believing and building on the idea that people are smart and motivated is also a self-fulfilling prophecy. We get to choose.

    Manage stuff. Lead people. Two very different things. Here’s my TED talk on it – https://www.youtube.com/watch?v=ewA2BqbWhUQ

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