Organisational Development is often described as a “magpie profession” and there is nothing I love more than seeking out the latest shiny new innovation in management practices. Hardly a day goes by at the moment without someone (even me) declaring the end to performance appraisals. Word on the street is that it’s the end for hierarchies, traditional organisational structures and fixed roles and job titles – long live the Holacracy. Twitter is a flutter with people declaring that they just couldn’t live without Slack, Do, Asana, Zen Desk
What I’m increasingly realising is that it is all about context. What is right and works for one organisation will not necessarily work for another. Many of these innovations have been adopted by the West Coast tech-led companies who are generally early-stage and predominantly staffed by American Gen Y/Millennials. Whilst it is not surprising that these are the early adopters, how long, if ever will it be before these practices become the norm globally?
Now, there is no doubt that moving away from annual performance reviews is the right thing to do. It reflects the shift in the way we work and how the pace of change has speeded up. Introducing more frequent, quality feedback on how an employee is doing is the best way to drive performance. But your organisation needs to be ready for it. You can’t tell managers that they now need to start giving high quality feedback without ensuring that they have the tools and capability to do that. The scientific evidence for scrapping performance ratings is clear, but for many of the organisations that we’ve worked with this has been a step too far to take in one leap. Intellectually they know that it is the right thing to do, but when the rubber hits the road, ratings are the things they want to hold on to for the time being.
Leaders ask: “How will we make sure that compensation decisions are fair if we don’t have ratings?” My response is always to challenge and ask, “do you really think compensation decisions are fair the way you currently make them?” It is a difficult one to resolve, but that doesn’t mean you shouldn’t try. Zappos are trialling a compensation system based on badges, similar to levels in a computer game, that you acquire through performing different roles, or undertaking different tasks. Not sure yet which way that is going to go but at least they are trying something that relates to what you are actually doing, rather than because of a number you’ve been given. Will be following with interest.
Speaking of Zappos, I’ve been following the rise of the Holacracy with fascination. We’ve long recognised the need to overhaul our approach to designing organisations. Zappos are one of a growing number of predominately US-based, tech-led companies designing far more agile organisational structures and processes that reflect the way that they work. No powerful management hierarchies, no bosses, no job titles, self-managed teams, freedom to express oneself – sounds fabulous, right? But recent reports have indicated that not everyone at Zappos loves this new way of working. Earlier this year, they offered employees a severance package to leave if they didn’t agree with the way things were working. 14% of the workforce took the package.
So could it be that this Utopian vision of the future of organisations as a Holacracy is a step too far, even for some of the brightest young things? Right now it may be, but given time this will become more normalised in tech-led organisations. However, I’m not convinced that we’ll all be working in Holacracies in five, ten, even twenty years’ time.
Back to my point about context! I cannot see a global 50k employee organisation becoming a Holacracy (and I’m not sure Brian Robertson, founder of the Holacracy approach, ever intended it to extend that far). What I can envisage is a time where people are not hired into specific roles, but into work areas or on to specific short-term projects as the norm. I also love the idea of people applying to work for a specific coach, mentor, advocate (Guide?), rather than for a specific role. More on that another time….
So, before you rush towards the latest shiny new innovation in management practices, it would be worth pausing to ask yourself the following questions:
1. Is this the right thing for our organisation, right now?
2. Will it work culturally?
3. What preparations do we need to make, in order to make this really work for us?
4. Are the Leadership Team bought in to this change?
5. Do we need to phase our approach, so that we are headed for the ideal, but in manageable steps?
Emma Sawula is co-founder of The Geek People @thegeekpeople. She specialises in organisational development, performance management and organisational culture and transformation. You can follow her @emmazulu