Imagine a corporate structure that does away with hierarchy: no CEO, no board of directors, and no climbing the company ladder. While it might sound inconceivable, companies around the world (including American online retailer Zappos) are aiming to reinvent traditional corporate culture by trying a new non-hierarchical organization method. Known to practitioners as “holacracy,” the model empowers employees to make decisions on behalf of the company without consulting supervisors—as long as their actions are in line with a corporate constitution and framework of rules that all workers commit to.
Phil Caravaggio, co-founder of Toronto-based fitness website Precision Nutrition, says his company switched to holacracy after it expanded from eight employees to 50. At that size, Caravaggio says he didn’t have time to do what he was good at—coaching and strategic planning—because he was too busy managing people.
Under the new system, employees with competencies in a specific area are authorized to make decisions. “If I feel like I have something to say, I can say something about it. But they have the ultimate authority on what gets done.”
Brian Robertson, co-founder of consulting firm HolacracyOne, says about 140 companies worldwide practise holacracy. With 4,000 employees, Zappos appears to be by far the largest. The company announced the transition late last year, so it’s too early to say how it will play out. But Caravaggio says his company has been “emboldened” by holacracy. “I want to be a leader,” he says. “I don’t want to be a manager. And this is a way for people to make that shift.”