Idea in Brief

The Hype

Holacracy and other forms of self-organization have been getting a lot of press. Proponents hail them as “flat” environments that foster flexibility, engagement, productivity, and efficiency. Critics say they’re naive, unrealistic experiments.

The Reality

Neither view is quite right. Although the new forms can help organizations become more adaptable and nimble, most companies shouldn’t adopt their principles wholesale.

The Potential

A piecemeal approach usually makes sense. Organizations can use elements of self-management in areas where the need for adaptability is high, and traditional models where reliability is paramount.

It was a Thursday afternoon in Las Vegas. Five employees were camped out in a team room at Zappos, the largest company so far to implement holacracy—a form of self-management that confers decision power on fluid teams, or “circles,” and roles rather than individuals. On this particular day, in May 2015, the circle charged with overseeing holacracy’s adoption was questioning the method’s effectiveness.

A version of this article appeared in the July–August 2016 issue (pp.38–49) of Harvard Business Review.