Corporate governance is a complex, multi-disciplinary, multi-layered concept that encompasses the myriad structures, processes, models, and mechanisms that actively influence the path that corporations take in their business journey.
Discussions about the principles, ideas, and responsibilities that of all stakeholders involved have in influencing the overall governance have generated countless books, articles, blog posts, etc., and while a fascinating topic, most of these arguments are beyond the scope of this particular piece.
This article has a far narrower focus, as it deals with the idea of hierarchy v holacracy, two different management frameworks that would fall under the broader category of corporate governance.
A hierarchical structure is an organizational structure that follows a linear, top-down chain of command. If we think of any corporation, a good visual analogy is a pyramid. At its apex stands the CEO. On the next level, which is a little bigger, top executives. Next step down -bigger still- is middle management, then supervisors -a slightly larger layer, and at the bottom -the largest level-, the staff. Another classic example of a hierarchical structure is the army. General, Colonel, Lieutenant, Sergeant, and so on. In both cases, the chain of command is clear. Everyone knows their place in the pyramid of power, and everyone knows who they report to.
Holacracy subverts the traditional hierarchical model of top-to-bottom power structure by distributing this power among all employees. The best visual analogy for this is a large circle (the company) that contains smaller circles (different departments).
Key point: in a hierarchical model, power flows top to bottom. In a holacratic model, governance is distributed among self-organizing groups.
Marketing teams are among the most dynamic in a corporation. Business and market trends change quickly and often, and the teams must be ready to adapt just as fast. Because of this, a hierarchical structure might not be the best fit. The danger of hierarchy is that it tends not to generate a wide range of information. Within this structure, the more complex the task, the more likely we are to make a mistake or miss something critical. Hierarchy can also suppress dissent because people don't want to take on those at the top.
“Marketing is great because everyone has advice on how to do your job better.”
A one-sided, top-down hierarchy can stifle the employee experience and leave workers with a lack of power and control over their situations. The future of work is moving towards organizations where employees feel valued and have the tools they need to reach their potential.
The same grouping that allows members of departments to work well together also isolates them from other sections of a company, reducing interdepartmental cooperation and communication.
In traditional teams, a worker has a designated job title and fulfills one role. The responsibilities rarely change. Again, this suggests little adaptability to rapidly changing circumstances, particularly in marketing.
In a holacratic environment, however, one team member can fill multiple roles, with responsibilities changing as work shifts or new projects come in.
According to a study by Harvard Business Review, "people who work in organizations with self-governing structures are more committed and productive, show more initiative and creative thinking, stay longer at their jobs, have higher job satisfaction, take fewer family sick days, and are less likely to quit than those in traditional bureaucratic structures."
The observation imposing decisions from the top down hurts departments, for three reasons. One, it deprives the organization of key operational insight that can only come from people who are close to the action. Two, it slows down the organization when the busy people at the top are too busy to find a solution. And three, it breeds resentment from people who feel like they’re simple cogs in a machine.
So what is the solution to this conundrum? Encourage dialogue and trust that people who are closer to work will make the right call.
One of the objectives of holacracy is to speed up decision-making and give people who are closer to the problem more authority to experiment with what they think is the best solution.
There is no chaos when everyone in the organization knows exactly where they want to go and what falls into their sphere of influence.
Instead of making a yearly plan and sticking to it like a traditional organization, a holacratic structure is no longer static. It evolves continuously.
Regular meetings are great tools to check in with your colleagues within your own team, or different ones. Questions like what did we do? did it work? why not? what do we want to try next? help to find new ways of doing better work. These meetings where people talk about real things that were done are far better than guesswork, which is what many companies do.
The buzzword for this is forecasting. But for those of us who have worked in big corporations, we know how it really works:
This approach raises two huge and immediate issues:
It’s little more than guesswork.
It’s incredibly limiting, because, even if you aim for moonshots based on past numbers, you’re still working within the same paradigm. You’re discouraging innovative thinking.
While holacracy sounds like a great way to foster creativity and innovation, it could be a potentially chaotic way to run a business. Holacratic marketing teams could be more agile, adaptable, and efficient, but still require constant analysis of customer feedback, and act according to the audience preferences.
Holacratic structures are designed to remove bureaucracy and 'office politics', while creating opportunities for greater innovation within the creativity and distribution of the content. They are a new way of structuring your marketing that lets companies operate at peak capacity with fewer people.