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Gulf of Corinth Clouds

The way we work is changing, yet our organisations remain the same – for now. If you have followed our recent research or blog you will have noticed two things:

  • The interests of Gen Y and women are converging: both ask us to rethink the nature of work. For example to be judged on results, not face time; to reward team performance, not stars; or to push the knowledge of the business strategy at the lowest possible level to ensure grass-roots buy-in.
  • These trends are here to stay: young workers are prepared to walk out and join competitors who espouse their values more closely, even as they enter the time poor/cash poor phase of their lives.

In reaction many companies are studying more flexible approaches to working, and are attempting to change their culture. But they are doing it in the context of a hierarchical organisation. To paraphrase McGill fellow panellist Alexander Toeldte : on the one hand we want to keep young managers interested and encourage them to complete full learning cycles, on the other hand explicit hierarchies force us to invent carrots to formally recognise those who stick around. And so to circles: for the first time, the pyramid seems to be challenged. Formal hierarchies stem from a command-and-control view of the world. This comes first from the military, but then from the specialised roles demanded by industrialisation. Taylor’s time & motion studies date back to the 1880s and today’s organisations are little different from that implemented by Alfred Sloan in the 1920s. If ‘modern’ work should be self-organising, then why do we still work in non self-organising hierarchies? We have all had the experience of ‘the organisational chart says this, but things are actually done like that’. Fighting the system and baronies reduces our agility and slows us down. So, if not pyramids, then what? Current thinking points to Sociocracy as a possible answer. Sociocracy is a form of consensus-based governance to support a common cause at a local level. Consensus doesn’t mean democracy or full agreement; it means a good-enough convergent decision to progress towards an agreed goal. Each local ‘cause’ is managed by a circle of participants, without formal hierarchy other than a circle moderator. This circle is linked to and can overlap other circles in the organisation. Because the decisions in one circle affect other circles, you have feedback loops between circles. Decisions affecting more than one circle that cannot be solved at that level are made by a broader circle formed by representatives from each circle. The idea is not new: it was developed in the Netherlands in the 1970s; but it has acquired a new life with variations such as Holacracy : a more practical approach to implementing Sociocratic principles. We are seeing the first real life tests in large companies: Zappos.com, a division of Amazon famous for its advanced organisational thinking, has recently made headlines by challenging its staff to adopt Holacracy or take a severance package. There is great anxiety among managers when adopting a Circle approach: titles and hierarchy go, and competence (or lack thereof) becomes visible instantly. Interestingly, our research also tells us that respecting their boss is a key retention factor for Gen Y workers… Sociocracy may not be the final answer to the pyramid: it may work well for specific projects but we have yet to see full companies with complex processes organised in circles. As we all well know, the market economy is the ultimate self-organising system, and it is far from perfect… But in the meantime, we see circles on the horizon.   Please comment below or send us examples of alternatives to the pyramid at info@whitewatergroup.eu You can also get in touch with us here or telephone us on 020 7036 8899. We look forward to hearing your views.

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