What we learned when we ‘fired’ all our managers

Eighteen months ago, I made the decision to fire all of my company’s managers. By “fire,” I mean remove their management responsibilities and instead, have them focus their efforts on actually doing the work they were originally hired to do (which in Inventium‘s case, is innovation consulting) rather than spend countless hours managing people.

Many companies around the world have done the same thing over the last few years. Perhaps most famously, Tony Hsieh, CEO of Zappos, implemented a holocracy in 2013. Hsieh describes how when cities get bigger, productivity increases. Yet, when companies get bigger, the opposite happens:

“In a city, people and businesses are self-organizing. We’re trying to do the same thing by switching from a normal hierarchical structure to a system called holacracy, which enables employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do.”
While adopting a self-management model hasn’t been without its challenges, the net result has been positive and I have learned several things along the way.

1. Understand the holocracy rules, then break them.

Before implementing our version of a holocracy, we immersed ourselves in the literature and “rules” of holocracy. Certainly one of the criticisms of the system is that it replaces one bureaucratic, rule-driven system with another. There is plenty of jargon and new terms to use and understand. After reviewing it all, we took what we liked, and created some new systems of our own.

For example, while no one has a manager at Inventium, people constantly work in different team combinations so rather than having “circles” as a true holocracy prescribes, we hire people who are self-motivated and self-driven and are comfortable working both on their own and with a variety of different team combinations.

2. Reflect, reflect and then reflect again.

A component I felt was missing from a standard holocracy model was finding a fair way to evaluate team members’ performance, especially given many of my team members work solo for a chunk of their time. One of the methods we introduced into our system was a quarterly self-reflection. Each team member is asked questions such as:

• What are the key things you have done/achieved this last quarter which have made you proudest?
• What have been your most significant learnings this quarter? How have these led to self-improvement?
• Reflect on a time that you may have failed this past quarter. How have you incorporated the learnings from this into your future “self”?
• What are you most looking forward to achieving next quarter?

We have found this self-reflection to be incredibly helpful not only for individuals to look back and recognise what they have achieved, but in making pay rise decisions. Using other data points, such as client feedback, helps to provide a complete picture.

In addition, I’ve regularly sought the team’s reflections on how the new system has been working and what needs tweaking. This has led to us deviating from the traditional holocracy model, but making it work for our unique culture.

3. Treat people like adults and they will behave this way.

One of my biggest frustrations with how I see most companies run is that people (namely, bad managers) treat their staff like children. At its worst, bad managers micromanage and have a blatant distrust for their team.

Firing the managers was our way of treating people like adults. I want my whole team to act like a founder and make decisions as if they ran the company. I had been inspired by Netflix’s slide deck that outlined its “Freedom and Responsibility Culture” and how the company’s expenses policy was “Act in Netflix’s best interests.” Essentially, asking people to adopt a founder mindset.

Over the last 18 months, I have seen individuals within the team at Inventium really push themselves forward and take ownership of their development and progress. I am constantly pleasantly surprised when I hear about people making changes to processes without my approval because they felt it was the right thing to do.

4. Not everyone loves not having a manager.

In running a holocracy, I have found people’s response to be binary. People either love it and thrive, or it makes them feel extremely uncomfortable and they inevitably leave. Certainly, at Zappos, 18 percent of staff voted with their feet and left.

To ensure we bring in the former type of people, the two key qualities we now look for when recruiting people are:

• Highly autonomous. People who love having the freedom to do things their way and make their own decisions come to life without managers.
• Self-driven in their approach to learning. While we have a somewhat structured approach to induction, when it comes to learning the tools and frameworks that underpin our innovation consulting business, we give people an end goal but little guidance on to how to get there. People who need their hand held every step of the way would hate it, whereas those who are self-motivated thrive and learn fast.

So, while a holocracy model is certainly not for everyone, it has created an environment at Inventium where people have freedom, are treated like adults and individually can have a big impact on the company.