Gallup statistics on employee engagement sparked a national fervor with their bleak outlook. But the research consultancy released some related numbers that, while less widely reported, are just as interesting. 

Namely, that 70 percent of the variance in engagement is accounted for by managers.

Management and Engagement Go Hand-in-Hand

That management style affects engagement should seem obvious, but now we have confirmation. 

Organizations seem to understand this point implicitly, with the countless approaches to management, many of which are touted precisely for their ability to improve culture. Executives blogging over their company intranets and minimizing the space between themselves and their employees is now commonplace. All over, we see efforts to "empower" employees.

Bottom-up management, flattened hierarchies and employee communication through intranets are a few ways that companies are trying to rethink traditional management approaches. The idea being that by giving employees increased responsibility for their departments’ performance, they become more creative and more motivated. Both of which play a big part in employee engagement. 

A number of companies have made headlines in recent years for their experiments in non-top-down management styles of various stripes. Perhaps most famous is Zappos’ attempt at instituting Holacracy.

Revisiting Holacracy

Holacracy is a trademarked organizational design model with its own guidelines, systems of governance, and even software that helps you implement it. The idea behind Holacracy is a complete decentralization of power and a rather utopian vision of collaboration and responsibility sharing. 

Zappos efforts in eliminating managers and job titles is frequently held up as the poster child of Holacratic initiatives. 

How did it work out for the company? 

In a word, not great. 

Fourteen percent of the company’s employees resigned rather than make the change. Telus Chief Envisioner and author Dan Pontefract wrote an in depth article on the subject where he examined some of the roadblocks the company encountered in trying to implement the approach. 

Other companies, including publishing platform Medium and WordPress’ parent company Automattic, implemented Holacracy or a similar structure and reported much more positive experiences than Zappos.

Pounding a Square Peg in a Round Hole

So what went wrong when Zappos decided to nix its organizational structure “Hol”-cloth?

As Pontefract pointed out, Zappos had a thriving culture prior to CEO Tony Hsieh shaking things up. It appears that Holacracy was part of an effort of continuous improvement, but at risk of using a complete cliché, “If it ain’t broke, don’t fix it.” 

Many of the other companies that used Holacracy-like systems adopted only pieces of the model — or central tenets — without forcing employees to follow it to the letter. Even Medium, Holacracy’s second most famous champion, is moving on from the system as it scales up in its operations.

Learning Opportunities

While no company is perfect, and improvement is typically positive, there’s no such thing as a one-size-fits-all solution. Different companies have different needs, and when change exists for its own sake, rather than to address challenges while celebrating successes, that change is less likely to be for the better.

Bottom-up management, flattened organizational structures and Holacracy all rest on solid theories. 

Employees who have a larger share of responsibility and directly see the impact of their actions are more engaged. If management nurtures their creativity and rewards that creativity when it pays off, that too helps engagement. 

So while Holacracy has many sensible ideas at the root of it, including its endorsement of self-organized teams, taking any model in its entirety and expecting your organization to conform to it exactly is akin to hammering a square peg into a round hole. It ignores subtlety and risks permanently damaging company culture.

Adopt as Needed

Without fitting a specific model to your engagement efforts, it’s still completely possible to learn from non-top-down management styles. You don’t have to completely scrap your structure to support your employees, keep them motivated and engaged. 

Especially with the saturation of digital tools for the workplace, employers have nearly limitless options for connecting each person at every level of an organization. Because of the breadth and variety of options, companies can address areas that need improvement while at the same time leaving successful parts of their culture to continue thriving. 

For example, task and project management tools democratize the act of task delegation by allowing employees to form ad hoc teams around projects and to give one another assignments without needing a manager. This lets workers own more responsibility, and it builds transparency.

Company forums and employee blogs on the organization's intranet also encourages transparency at all levels of an organization, sometimes giving employees a direct line to executives and illuminating the company’s decision making process. They also encourage a culture of knowledge sharing, breaking down silos and making vital information easily available to all employees. 

These tools, and many others like them, accomplish much of what the proponents of Holacracy and other non-top-down management systems hope to encourage. They don’t take radical steps to decentralize leadership, but they do aid and engage workers across an organization. 

Maybe the reason Holacracy didn’t work for Zappos is that its efforts to decentralize power were themselves too centralized — that is, they existed as a part of a single methodology. The tools are available to companies to implement bottom-up leadership or flat organizational structures where it’s appropriate and beneficial. The intentions in these models are good. It’s up to the individual companies to implement them wisely.

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