Why CEO’s Shouldn’t Have All of the Power

Power, if it is always held by the CEO, can slow a company down, create a workforce that doesn’t buy in, and result in high turnover.

Power, if distributed properly, can result in an agile organization where information flows freely and employees have a sense of ownership over their work.

You are not always the expert, nor should you be

Holacracy is an organizational structure that helps distribute power in a more healthy and productive manner than the traditional command and control structure.

One of the biggest misconceptions is that Holacracy is flat or that it is non hierarchical. However, it is actually very hierarchical, but it is often misrepresented.

What is actually happening is a removal of power from people or positions and a giving of power to specific roles. This power becomes fluid. There is nothing wrong with hierarchy or power. The problem is rigid power.

For example, if the CEO has power every time they are in the room regardless of whether or not they are the subject matter expert, it isn’t a good situation. In this case, someone who is the subject matter expert could know the best course of action, but they are either overruled, or they decide not to speak up for fear of being overruled.

In Holacracy, the subject matter expert would make decisions that fell into their area of expertise.

When the power is fluid and healthy depending on the subject or context, then power becomes a useful tool or energy source that moves around between roles rather than a rigid structure that everyone has to work against.

Holacracy is there to clarify powers, so it can relax relationships. People equate flatness to fairness, but true equality comes when power is clarified and respected. It’s not equality when someone who is new to a subject matter is treated the same as an expert is.

You are slowing down information

There can be a sense of fear when shifting to Holacracy that, as a CEO, you won’t be able to control anything anymore. You see it as something that will create chaos.

The issue is that companies traditionally rely on rigid structures to create predictability and order. Think of your standard top down management style.

But order is possible without predictability.

Holacracy asks us to separate our traditional understanding of order and predictability.

Imagine you are driving a car. When driving, you really have one purpose; Make it from point A to point B. But during your drive, there are millions of things you have to adjust for. There is other traffic, there are potholes, and there are curves in the road.

With all of these things coming your way, your body is continually making small, imperceptible adjustments. Each part of your body is working together to achieve the overall objective of the drive, but they are acting on their own.

In the same way, Holacracy allows teams and individuals to be focused on the purpose of the organization and make decisions autonomously. This leads to an organization that is agile.

Too often, in command and control organizations, by the time information has found its way all the way up and back down the chain of command, the landscape has changed. The decisions that needed to be made weren’t made at the optimum time.

In order to have an organization that is agile, information must be free to flow freely.

You can’t force people to buy in

The result of fluid power and information is trust and buy in from employees.

Many people fail to see how their day to day work actually makes the organization better. So many companies have a mission statement that sits in the employee handbook but doesn’t resonate with their employees.

Instead of mission and vision statements, companies running on Holacracy have a purpose that is very grounded and clear. This is usually just one sentence about what the company is here to do.

When creating a purpose, companies will often ask, “What would there be less of in the world if this org didn’t exist? “What is this organization here to achieve?” “What, if achieved, would make this organization obsolete?”

On top of this, each role sets its own purpose that helps the overall organization achieve its purpose. Every time you take on work, you ask yourself if it helps fulfill your role’s purpose. All of these roles can really align to move a company forward.

This process can really make a purpose statement usable and relevant on a day to day basis in a way that vision and mission statements struggle to achieve.

The command and control structure can also make it so many employees often feel like they have no say in what goes on within the company.

I’ve sat before in meetings with leadership teams for 2 or 3 hours where nobody conflicted with anyone else. How can you talk about the work you are passionate about for that long and have no disagreements?

There are a lot of people who think if they bring something up, they will get shut down or that it won’t change anything. A lot of people sit in meetings and just nod their heads.

So after the meeting, they walk out and feel defeated about their work. They feel like they have no input and that they don’t have the opportunity to air out opinions and speak truth. That leads to a lack of buy in on the decisions the organization has made.

Holacracy uses a process called Integrative Decision Making (IDM). It is an intelligent decision making process that guards autonomy and innovation. IDM also has a deep integration system for disagreements when someone objects to a proposal, but it is much more nuanced and creative than the majority rules of a democratic voting process.

Having a platform for every meeting where people can trust that their input will be heard and considered gives employees a sense of ownership their work.

Being agile in the current landscape

Businesses now receive more change-producing and priority-shifting inputs than companies ever have before, and the traditional command and control structure doesn’t facilitate the agility needed to react and respond to this.

Holacracy is a living system that is built for fluidity of power and information where each role has a purpose that helps drive the organization forward.

It is an agile structure that not only caters itself to the current market, but also to the interest in employees to have purpose and autonomy in their roles.

As a CEO, it can help you create an environment where subject matter experts are making timely decisions, where your employees truly feel connected, and where you can be confident in navigating the current landscape of business.

Pulling it all together

As you can see, a typical org structure doesn’t always best serve the needs of today’s fast paced companies. By moving to a more agile company approach, you can create a stronger culture and move at a much quicker pace.

About the Author

Karim Bishay helps organizations become insanely efficient. He is an industry leading consultant in the areas of Holacracy, Adaptive Organizations, GTD, OKR’s, and Emotional Intelligence. You can learn more about Karim at LivingOrgs.com