HOLACRACY: A CASE STUDY OF DYNAMIC GOVERNANCE FOR THE

MODERN WORKFORCE

by

Bronwyn M. O’Shea

ANGELA BRUCH, PhD, Faculty Mentor and Chair

MIKE DOOGAN, PhD, Committee Member

JOEL WIDZER, PsyD, Committee Member

Andrea Miller, PhD, Dean of Psychology

Harold Abel School of Social and Behavioral Sciences

A Dissertation Presented in Partial Fulfillment

Of the Requirements for the Degree

Doctor of Philosophy

Capella University

September 2016

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© Bronwyn O’Shea, 2016

Abstract

Leadership has taken many forms since the commencement of the organizational

structure and these will be discussed in detail in the literature review. Terms to define

leadership are abundant, confusing and often interchangeable. Dynamic governance, the

term HolacracyOne uses to describe their version of shared leadership, could just as

easily be called distributed authority, self-determination, cooperative leadership, and self-

management along with others, and these terms will be used interchangeably throughout

this paper as none is more accurate than the other. This study found that shared

leadership within organizations was the preferred option for all participants. A

qualitative approach was utilized to understand if holacracy could be a dynamic

organizational structure for the modern workforce. This modern workforce has

ubiquitous connectivity and is linked and online all the time. The intention of the

research was to focus on leadership and how leadership under holacracy might exist and

enhance current leadership theory. The dominant themes centered more on the

mechanics of holacracy than leadership attributes and qualities. The one theme that

underpinned all themes was that of emotional intelligence (EI) which was reflective of

participant comments on limitations regarding the people aspect of the holacratic model.

Lessons learned from this case study suggest that what organizational members think is

important varies, and future research of both qualitative and quantitative methodologies

are necessary in order to enrich the knowledge base on leadership theory and holacracy as

a dynamic governance structure.

iii

Dedication

A simple dedication to both my mother and father who thankfully are still alive at

the age of 87. They now have the pleasure of a having one doctor in the family from their

seven children. I can still recall them driving fifteen hours to watch me graduate when I

received my master’s degree. This is a significant accomplishment for me as I failed high

school and believed that I was not intelligent enough to go to university. I later learned that

I didn’t comprehend knowledge the same way others did, and I certainly didn’t fit into the

traditional model of school education. I started on this journey over seven years ago and I

did not fully grasp the impact this would have on my life and those around me until now. I

learned, if you put your mind to something it can be done, it might take longer than you

first planned, but one foot in front of the other, will keep you on your path. Recently this

quote has come to mean a lot to me,

She believed she could, so she did.

-R.S. Grey

iv

Acknowledgments

To my mentor, Dr. Angela Bruch, who has been on this journey with me for over

two years. With a rough start as I had to have a do over and change topics and change

committee members, Angela guided and supported my interest in this topic and encouraged

me at every milestone.

To Dr. Mike Doogan and Dr. Joel Widzer who served as committee members and

who added their wealth of experience to the success of my research.

To HolacracyOne and Brian Robertson, who graciously supported my research into

his organizational model and provided access to the participants.

To all the participants who gave their time and opinions freely and greatly added to

the process.

To my fellow students at Capella and the faculty at Colloquia who contributed and

kept me focused.

v

Table of Contents

Acknowledgments iv

List of Tables viii

List of Figures ix

CHAPTER 1. INTRODUCTION 1

Background of the Problem (Introduction) 1

Statement of the Problem 11

Purpose of the Study 12

Significance of the Study 14

Research Design 17

Research Question 18

Assumptions and Limitations 20

Definition of Terms 21

Expected Findings 31

Organization of the Remainder of the Study 32

CHAPTER 2. LITERATURE REVIEW 33

Introduction to the Literature Review 33

Theoretical Orientation for the Study 35

Review of Research Literature 62

Review of Methodological Literature Specific to Holacracy 71

Synthesis of the Research Findings 75

Critique of the Previous Research 75

Summary 76

CHAPTER 3. METHODOLOGY 77

vi

Purpose of the Study 77

Research Design 78

Target Population and Participant Selection 82

Procedures 83

Instrument 84

Research Questions 85

Data Analysis 86

Ethical Considerations 89

Expected Findings 92

CHAPTER 4. RESULTS 94

Introduction: The Study and the Researcher 94

Description of the Sample (Participants) 96

Research Methodology Applied to the Data Analysis 99

Presentation of the Data and Results of the Analysis 99

Summary 125

CHAPTER 5. DISCUSSION, IMPLICATIONS, RECOMMENDATIONS 127

Introduction 127

Summary of the Results 128

Discussion of the Results 129

Discussion of the Conclusions 135

Limitations 137

Recommendations for Future Research or Interventions 138

Conclusion 139

REFERENCES 141

vii

APPENDIX A. STATEMENT OF ORIGINAL WORK 172

174APPENDIX B. QUESTIONNAIRE

viii

List of Tables

Table 1. Summary of Evolution of the Management Models 39

Table 2. The Five Pillars of Modern Leadership 61

Table 3. Demographics of Sample 98

Table 4. Themes Ranked by Participants 114

Table 5. Themes Ranked by Relevance 114

ix

List of Figures

Figure 1. Google Trends: Interest over Time (%) of Search Term Holacracy 10

Figure 2. Basic Circle Structure 23

Figure 3. How It Works 24

Figure 4. Linking Circles 25

Figure 5. Corporate Structure – How We Believe It to Be 26

Figure 6. Corporate Structure - How It Really Works 27

Figure 7. A Progressive Focusing Model of the Qualitative Research Process 87

Figure 8. Changing Demographics in Workforce 94

1

CHAPTER 1. INTRODUCTION

Background of the Problem (Introduction)

Evolution as a word evokes an idea of a living being changing over time.

Organizations are considered to evolve in much the same way as organisms in nature and

as such would also change over time (Drew & Wallis, 2014; Pellissier, 2012; Wheatley,

2007). Ulieru (2014) expanded on this notion to suggest that like organisms, organizations

are both autonomous and tied to a larger system. All new theories regardless of what

branch of science take considerable time for the academic community to study,

scientifically examine, and find evidence to support a new theory. New theories

concerning organizations are no different.

While theories that tackle organizations as systems and sub-systems are not new,

the developments in the way technology has enabled information to flow within

organizations has created the need for change and ‘a better mouse trap’, or so is the thought

of many modern organizations (Collins, 2014; van de Kamp, 2014; Pellissier, 2012). Even

the military as suggested by Gen. Stanley McChrystal and discussed online by Howard

Schultz (Schultz, 2015), the CEO of Starbucks had demonstrated a need for new systems

thinking. This new thinking behind flatter systems and sub-systems such as holacracy,

have had little research as there has not been sufficient time for academia or for that matter

the business community to research outcomes (Carson, Tesluk & Marrone, 2007).

2

This research aims to start the conversation regarding dynamic governance which in

simple terms can be described as shared, distributed or collectivistic leadership as defined

by Avolio, Walumbwa and Weber (2009), and these terms will be expanded upon in the

definition section as well as Chapter 2. However there is nothing simple about it or the

implementation of such a strategy within an organization (Collins, 2014).

This introductory chapter is considerably longer than most as it contains non-peer

reviewed articles to set the stage for the topic. Holacracy has had little academic scrutiny

since its introduction in 2007. There has not been sufficient time in which to engage in or

add to the research base, given the contemporary nature and limited adoption of holacracy

by mid to large companies to service a significant sample population. Chapter 2 will

review the academic literature that forms the basis of the theories behind shared leadership,

self-management and the derivatives of management theory that are impossible to separate

from leadership. Many researchers (Avolio et al., 2009; Bangerjee, 2008; Kaag, 2008,

2011; Pratt, 2011) cited the 1924 work of Mary Parker Follett suggesting she started the

discussions about shared leadership. The form this shared leadership took was the notion

of self-managed teams or some self-determination interlaced with a traditional hierarchy

within the top-down management styled companies. Self-management has occurred in

nature for millennia and has managed complex non-linear and chaotic situations outside the

workplace (Laloux, 2014).

One of the modern organizations to embark on a new strategy of shared leadership

was Zappos, the online shoe company, now owned by Amazon. Zappos decided upon

holacracy, a system for managing the organization utilizing a very specific version of

shared leadership. Understanding what holacracy brings to an organization can only really

3

be appreciated by looking at the other models of shared or distributed leadership, as they

relate to the traditional models employed by the vast majority of companies (Ivanov, 2011).

Traditional Organizational Structures

The earliest form of organization as noted in the work by Ackoff (2002) was the

family working at home as a single unit which then segued to working in factories as part

of a production unit or system, and then lastly to where individuals felt they were part of

the system, and ultimately part of something bigger than the organization itself. These

structures were mostly managed by vertical leadership, where managers took a position

outside and above the team with authority and responsibility for the actions and results of

the team (Pearce & Sims, 2002).

Freidman (2000) along with Porter-O’Grady and Malloch (2003) reflected that

organizations prior to 2000 were all about process. Subsequently to the turn of the century,

albeit not that many by comparison to the total number of companies, numerous

organizations are evolving towards complexity. The linear approach of the traditional top-

down hierarchy does not manage complexity with the speed necessary for the “ubiquitous

connectivity” (Collins, 2014, p. 11) of the modern workplace.

Moore’s Law. Gordon Moore was the cofounder of Intel and his other claim to

fame was the understanding of change in technological times (Collins, 2014). Moore’s law

implies change isn’t a straight linear line on a chart, rather change takes place

exponentially. This thinking led to the concept of “ubiquitous connectivity” (p. 11) as

everyone seems to be connected to something or someone all the time.

Traditional hierarchy employs a stable and structured approach with the leader

having ultimate knowledge, wisdom and power (Geer-Frazier, 2014). Uhl-Bien, Marion

4

and McKelvey (2007) further noted that traditional leadership controlled behaviors and

suggested this has been the best option for stable and unchanging environments.

Schraagen, Veld and DeKoning (2010) recommended something new is needed in complex

unstable environments.

Modern Organizational Structures

The seminal work by Frederic Laloux (2014), a former Associate Partner with

McKinsey & Company provided groundbreaking developments in organizational design,

with his book, Reinventing Organizations. The use of the color labels provides an easier

way of relating to the evolution of humanity, nonetheless each phase has an associated text

label to describe the sentiment of the period and the shift into a new paradigm. Colors

prior to red were pre-organizational corporate structures and so have little relevance in the

move towards teal. Red and amber are also both pre-present day and while interesting

from an evolutionary perspective also add little in the move towards teal.

Orange or the “achievement” stage presents the concept of “effectiveness” and that

“the better I understand the way the world operates, the more I can achieve; the best

decision is the one that begets the highest outcome” (Laloux, 2014, p. 24). Laloux further

expanded to illustrate the type of companies that represent orange organizations, for

example; Walmart, Nike and Cocoa-Cola.

Learnings or “breakthroughs” as he called them to reach this new paradigm are

“innovation, accountability and meritocracy” (Laloux, 2014, p. 26). This paradigm is

likely the one that cemented the premise of vertical hierarchy where the thinking was

“everybody should be put in the box of the organizational chart where they can best

5

contribute to the whole” (p. 27). Power was a good thing and no one’s background made a

difference to whether they could get to the top.

Green reflects the “pluralistic” approach where “fairness, equality, harmony,

community, cooperation, and consensus” are valued and “power and hierarchy” (Laloux,

2014, p. 31) are less than ideal. Breakthroughs into this paradigm are “empowerment, a

value-driven culture and inspirational purpose” in addition to a “multiple stakeholder

perspective” (pp. 32-33) and stakeholders are many-fold from investors to management, all

the way through the value chain to customers and society.

Teal is nirvana or the place to aspire to be. Laloux (2014) defined a new metaphor

for this stage “organizations as living systems” and the breakthroughs seen here are “self-

management, wholeness and evolutionary purpose” (pp. 55-56). Examples of the different

evolutionary stages can be summarized with descriptive terms; from the “Wolf Pack”

mentality of red organizations, the strictness seen in the “Army” persona of amber

organizations, to the “Machine” of orange organizations and then to the “Family”

atmosphere in green organizations (Laloux, 2014, p. 36). What is not clear is the term to

describe teal organizations as this concept is still in formation.

Twelve companies were included in Laloux’s research, however holacracy for the

purpose of his research was considered an “organizational operating model” rather than a

company and “provides perhaps the most elegant process to define roles and help them

evolve” (2014, p. 117). What is interesting to note is that many companies in the book are

based in the United States and are much larger than Zappos. Evident in Laloux’s work is

the lack of information that can be derived about teal organizations at this point in its

acceptance, and while Laloux presented companies in his book that reflect teal practices, it

6

is clear that with only half the number being based in the United States, this is not a

watershed migration to this new organizational paradigm. Laloux focused on MorningStar

and Patagonia as successful teal organizations that most people would recognize.

Dr. Gary Hamel, considered a management expert and co-creator of the concept of

core competences which he defined as “a harmonized combination of multiple resources

and skills that distinguish a firm in the marketplace” (Schilling, 2013, p. 117) reviewed

MorningStar’s approach to management in the Harvard Business Review. There he

described the differences between managers and managing and the lack of the word

empowerment in MorningStar’s vocabulary (Hamel, 2011). Hamel noted that the act of

empowering someone suggested a traditional top-down management approach with

someone having the authority to bestow this right upon someone else. He furthered, power

is given to a role or function rather than to a person. In the MorningStar scenario, people

manage themselves or more accurately the tasks they perform, not other people. Self-

management is the act of self-empowerment in its purest sense. Self-management in

organizations could be a simple extension of focusing on one’s own core competencies to

achieve a common goal. Collins (2014), Hamel (2011), Laloux (2014) and Schilling

(2013) add to the increasing amount of non-peer reviewed literature on the topic of

leadership and support further research to add academic rigor to their assertions.

Another company much written about (Collins, 2014; Hamel, 2010) and studied at

length is W.L. Gore and their “un-management” (Shipper & Manz, 1992, p. 50) style of

management which started in 1965. Bill Gore, the owner of W.L. Gore described his

organizational structure as a lattice and had four principles, these being; “fairness, freedom,

commitment and waterline” (Shipper & Manz, 1992, p. 52). The first three principles are

7

easy to understand, while the waterline principle referred to any activity in which the ship

was hit below the level of the ocean resulting in the ship sinking.

Rod Collins (2014) known as an expert in management innovation also created his

own new model for organizations in the 21st century called “Wiki Management” (p. 17).

The term wiki was selected as it translates from Hawaiian to the English word quick.

Collins asserted the underlying premise of wiki management is that like technology,

organizations are network-based and this stands to reason as organizations are made up of

people, who for the most part are usually part of some network-be that as simple as a

family or church, or sporting group, or a Facebook collection of friends.

Many companies over the past twenty years have moved in this direction and

Collins (2014) cited Google, Craigslist, Wikipedia, Linux, Amazon, Salesforce, Whole

Foods, Valve, Threadless and both MorningStar and Zappos as examples of companies

switching to a nontraditional hierarchical structure. Collins paid special attention to W.L.

Gore and Toyota as larger organizations that have had this network approach introduced

and running for over 50 years.

Collins (2014) suggested “effective” (p. 21) organizations work with three models

that intersect between business, operations and management that exist on top of a structure

of values. The values within each model while separate from each other can be used in

multitudes of combinations that seem to reflect a dichotomy of values that support the other

values. These structural value choices are: “serendipity vs. planning, self-organized vs.

centrally organized, emergent vs. directed, simple rules vs. detail coordination” and

“transparency vs. control” (p. 21). In addition to the structural values, Collins proposed

value choices also exist when dealing with relationships, including: “customers vs bosses,

8

networks vs hierarchies, shared understanding vs compliance, leading vs lagging” and

“peers vs supervisors” (p. 49). A similar dichotomy would seem to underpin the

relationship value choices people would favor.

The final element to the wiki management logic defined by Collins (2014) was the

“resetting [of] their organizational principles, process, and practices in three critical areas”

and this took the form of “resetting the managers, resetting the meetings, and resetting the

measures” (p. 58). This directed less focus on what and more focus on people and is in line

with the teal approach to management.

The modern organization is less focused on structure as a physical construct, but

rather on the resources of leadership (Conger & Benjamin, 1999). McCall (1998) in

addition to Vicere and Fulmer (1998) predicted the best practice to ensure competitive

advantage was to focus on leadership at all levels. Katz and Miller (2014) advocated “an

entirely new paradigm” and one that happened rapidly and relinquished the mindset of “the

all-knowing, all-powerful leader” in favor of “an inclusive workplace in which

collaboration can flourish” (p. 40). They promoted that the swiftness of change made it

almost impossible for one leader to succeed and prosper.

Many contemporary authors (Baker, 2014; Laloux, 2014; Stack, 2014) are in

agreement with Katz and Miller (2014), that we are at the “tipping point” driven by the

consumer market on one side and the changing demographic of the workforce on the other

recommending organizations need to “adapt or fail” (p. 40). The former is the strategy

Zappos has chosen to adopt, as referenced by a quote from Tony Hsieh, the CEO of Zappos

that has been included in many online publications, “Having one foot in one world while

9

having the other foot in the other world has slowed down our transformation towards self-

management and self-organization” (Feloni, 2015, para. 6).

January 2014 started like any other month in a new year, with one exception.

Articles and blog posts started to appear with discussions about Zappos and their move to

holacracy. The adoption of this new self-management system had just been announced in

the press in December 2013. Zappos was well known for its corporate culture and if they

were trying something new in the way of management and organizational change, the

business community would no doubt take notice (Feloni, 2015).

Although holacracy as a new organizational design concept had been around since

2007 when Brian Robertson first created it, there had been few large and well recognized

names actually embracing it for the Human Resources and business communities to take

notice. When Zappos adopted the model it created a lot of interest from the media and

since then Zappos and by association holacracy and HolacracyOne, who provide the

implementation support, have all been under extensive scrutiny.

The most recent review of the interest in holacracy can be represented by the

change in interest when used as a search term in Google. Little to no interest was seen until

the peak at 100 in March 2014, with the next highest peak of 85 being registered in May

2015, when the Zappos employees were all issued the ultimatum to “adopt Holacracy or

quit” (Greenfield, 2015, para. 1). While this data is not presented as having academic

rigor, it does reflect change and interest in the larger community for holacracy.

10

Figure 1. Google Trends: Interest over Time (%) of Search Term Holacracy.

Coverage in an online article in January 2014 by Marcus Wohlson of Wired.com

seemed to suggest a positive feeling about the new direction at Zappos with the title, ‘The

next big thing you missed: Companies that work better without bosses’ and introduced his

readers to holacracy as being a system that structured work around what needed to be done,

rather than around the person who does the work. Wohlson also included other companies

who had adopted holacracy including a startup called Medium founded by a co-founder of

Twitter and a non-profit organization called Conscious Capitalism, established by the CEO

of Whole Foods. Other companies would follow, however none to date are as high profile

as Zappos which may be due in part to size as Zappos was by far the largest organization to

engage in such a major undertaking. Questions were raised about titles, compensation,

authority and accountability, which are understandably confusing elements for a new

organizational design.

The tone in many of the online articles that seemed to come out regularly suggested

that Hsieh was personally experimenting with holacracy. Richard Feloni (2015), who

writes for the online publication, Business Insider, and covers management strategy and

entrepreneurialism asked questions and made statements like, “What’s going on inside the

Amazon-owned Zappos? Hsieh is conducting one of the biggest experiments in

11

management history, but one in seven employees didn’t want to take part” (para. 9). The

flipside to this statistic is that six out of seven or 86% chose to stay and rejected the

financial incentive to leave the company, however this is a less sensational headline. Hsieh

had as his goal the transition from a green organization, where there is some employee

freedom but sits on the traditional hierarchy to one that is now teal, where problems are

fixed internally without managers (Feloni, 2015).

While Zappos was the inspiration for this research, being such a well-known

advocate of trying this new organizational design and having only recently started down the

path of change, it was decided not to include Zappos employees in this research. This

allowed for companies that had implanted holacracy for a longer period of time and

without media scrutiny to provide perhaps some valuable insights into this new domain and

create opportunities for more research into organizations utilizing shared leadership.

Statement of the Problem

Organizations have had many labels attached to structures that established rules or

conditions for interactions between employees at all levels. Romme (2003) and later

Chyung (2005) discussed these significant models that emerged from the early 1900s that

became the subject of future research. These models included scientific management

(Taylor, 1911) followed by the behavior engineering model (Gilbert, 1978), front-end

analysis (Harless, 1973) and the organizational elements model (Kaufman, 1988).

The structure of organizations and how to obtain best performance has developed

into its own field namely, human performance technology (HPT) based fundamentally on

the work of Gilbert, Harless and Brethower (Winieki, 2010). Brethower (1997) presented

the notion that “each person is influenced by the intellectual spirit of the times” (p. 29)

12

which is supported by changes in organizational structure as society has evolved. This

supported the creation of the different systems including; (a) mechanism - where society

moved away from home based work in favor of the factory system which viewed labor as

simply a replaceable part of the machine, (b) animate - where owners needed to relinquish

some control and incorporate non-owner management levels, and labor considered

themselves part of the system; and (c) social - where labor considered itself to be part of the

system as well as part of the external environment (Ackoff, 2002). In an attempt to better

understand diverse organizational models and management styles, labels were created to

identify the differences; systems used by organizations were now considered rational,

natural or open (Scott & Davis, 2007).

Purpose of the Study

Holacracy is an organizational design that flattens traditional hierarchy based on

dynamic governance. Holacracy expanded on the models of open circular design which

provided the underpinning to the concept of the collective and the humanizing of the

corporation (Levinson, 1977; Heller, 1985; Jaques, 2003; Romme, 2003). Romme (2003)

discussed Endenburg’s “circular organizational design” (p. 565) at the beginning of the

1970s that to some degree was a reaction to the work councils the Dutch government was

attempting to implement in corporate businesses. The circular design modelled on

cybernetics included a series of processes and feedback loops that enabled quicker

responses to issues (Romme & Endenburg, 2006). The label attributed to this new circular

design was sociocracy, however it became better known as “dynamic governance” (Buck &

Endenburg, 2003, p. 3).

13

Dynamic governance is an open system that emerged and solidified the social

system model and moved the organizational structure closer to that of a community as

argued by Handy (1995) and Ackoff (2002). The holacratic open system is described in

detail in the definitions section of this paper. The work of Mead from the 1930s to

Goffman in the 1980s and researchers in between were all interested in the interaction

between individuals and groups (collective), and how behavior was influenced by

environment and common causes (Styker, 1987). The significant difference between

dynamic governance and holacracy is that in other dynamic governance models the circular

design is placed on top of the existing hierarchy, whereas the design of holacracy is to

remove the hierarchy and make each circle autonomous (Robertson, 2015).

The inclusion of the experiences of employees moving to a holacratic model adds to

the research base of industrial and organizational psychology by extending the discussions

on dynamic governance approaches to organizational design and brings into debate

leadership styles in the knowledge workforce and how this may impact employee

performance. Open system models have developed in more recent years, nonetheless most

of the academic literature has focused on models prior to the 1990s (Grigg, 2010; Kaufield,

2006; Langfred, 2007; Proença, 2010; Scott & Davis, 2007; Zitek & Tiedens, 2012).

Robertson developed a model in 2007 which extended the idea of integrated

product teams (IPT) and self-directed teams (SDT) and offered a new alternative to the

traditional hierarchical structures of the past. Heller as early as 1995 and additionally

Ackoff in 2002, suggested to humanize the company and provide a community (Handy,

1995) and Robertson (2015) presented this with a system of dynamic governance and a

company constitution. While IPT and SDT research exists (Grigg, 2010; Kaufield, 2006;

14

Langfred, 2007; Proença, 2010; Scott & Davis, 2007; Zitek & Tiedens, 2012), there is no

research on the dynamic governance model as presented by using the holacratic

organizational design.

Significance of the Study

Corporate organizations have changed and adopted new practices and structures

over the decades (Blake & Moseley, 2010; Gilbert, 1978; Taylor, 1911) for predominantly

one reason: maximizing profit. Taylor focused on altering behavior “through scientifically

designed management methods, such as appropriate selection, incentives, and training”

(Chyung, 2005, p. 23) and to a certain degree offered some guidance on organizational

structure. Others (Ackoff, 1974; Butler, 1991; Davis & Blalack, 1975; Pane Haden,

Humphreys, Cooke & Penland, 2012) provided support for additional management system

approaches and introduced the newly coined term human performance technology (HPT)

based on Gilbert, Harless and Brethower (Winieki, 2010) to define this new field of

understanding employee impact in the company’s value proposition.

Dynamic governance could be compared to a living constitutional document and the

study investigated the impact organizational change, specifically increased autonomy or

dynamic governance through the holacratic structural approach, may or may not have on

the performance of a company. Higher levels in employee motivation and job satisfaction

have been linked to greater productivity (Hackman & Oldman, 1976; Langfred, 2013;

Langfred & Moye, 2004), which should increase profitability or at least improve other

measures the company determines to indicate success, as profitability is not always the

preferred metric.

15

Autonomy represents one aspect of dynamic governance, and as Heller (1995) and

Ackoff (2002) suggested the humanizing of companies reflected the move to a more

community (Handy, 1995) based model and providing autonomy to individuals offers a

sense of inclusion in outcomes. Organizational structure and optimum open system models

(Scott & Davis, 2007) have seen limited research and to date there appears no research into

the holacratic approach first introduced in 2007. Grigg (2010) along with others (Kaufield,

2006; Langfred, 2007; Proença, 2010; Zitek & Tiedens, 2012) presented research on

autonomy, hierarchical structures, integrated product teams (IPT) and self-directed teams

(SDT) that illustrated open system models. Checkland’s (2000) soft system methodology

came close to holacracy; specifically as most models appear at the team level as opposed to

a company-wide integrated system. This new approach to organizational structure and

leadership style adds to the scientific knowledge base by extending open system models

and leadership theory as they relate to shared or distributed leadership.

Open system models (Scott & Davis, 2007) sometimes referred to as integrated

product teams (IPT) and self-directed teams (SDT) along with many other terms to

represent distributed authority are at the fore front of organizational design research. The

theory underpinning these models is self-determination, however for self-determination to

exist in an organization, a change in leadership or management is necessary (Deci & Ryan,

2008).

Thorpe, Ryba and Denison (2014) contended that sociology is concerned with the

interaction between and within groups, with psychology more often focused on the

behavior of the individual. These two intersect in organizational psychology as the

16

behavior of the individual is influenced by the interactions of the group. Self-

determination theory was best defined by Deci and Ryan (2008) as;

a macro theory of human motivation, self-determination theory (SDT) addresses

such basic issues as personality development, self-regulation, universal

psychological needs, life goals and aspirations, energy and vitality, nonconscious

processes, the relations of culture to motivation, and the impact of social

environments on motivation, affect, behavior, and well-being. (p. 182)

The traditional hierarchy of the military with little self-determination was radically

changed when day to day activities in war zones no longer resembled the frontlines of

previous wars. The modern war called for radical thinking and Gen. McChrystal

documented this with some aptly real world experienced co-authors to reveal the military

had in fact presented its’ own longitudinal study on self-determination and shared

leadership that they called “team of teams” (McChrystal, Collins, Silverman & Fussell,

2015). Interestingly, the book only released in May 2015 is already a #1 best seller on

workplace culture suggesting that there is indeed a cross over from military to civilian

workplaces and HR professionals are interested in looking at the military for possible

change.

Many different innovative management or organizational models are surfacing with

most coming from the business community with little involvement from academia,

although the military had realized change was needed. While their effectiveness is not yet

scientifically supported, anecdotic evidence is cementing the necessity for investigation.

This paper provides one of the first studies into the holacratic model and makes

recommendations for future research.

17

Research Design

Creswell (2013) identified the rationale behind the use of case study methodology

as meeting the need of the researcher to investigate an activity within a bounded system. In

addition, these boundaries need to be clearly definable, and an in-depth level of inquiry sort

from the participants. Chenail (2011) suggested recent developments in qualitative

research methodologies presented little similarity to the studies of prior generations; and

posited that a mixed approach contributed to a more robust study with qualitative research

being valued because of the differences from quantitative and is not seen as having

shortcomings. Similarities exist between qualitative and quantitative methods insofar as

prior generations appeared to incorporate the linear process of quantitative into qualitative

inferring that a linear process contributed in same way to validity (Parlett & Hamilton,

1972; Sinkovic & Alfondi, 2012). Linearity has its place, however underpinning the

qualitative approach is discovery and the understanding that unforeseen situations may lead

to unexpected results.

A qualitative multiple case study has been deemed most appropriate as the

phenomenon currently has had little investigation and this research has at its focus the

understanding of the phenomenon and lessons learned which will contribute to the

appreciation of the positives and negatives of a holacratic approach to organizational

design. Participants provided in-depth knowledge regarding the topic which led to the

development of themes. In comparison to a phenomenological approach where data is

collected about one experience, the case study approach allows for multiple experiences

around one activity and this was the most appropriate to reflect upon the research question

(Creswell, 2013; Stake, 1995).

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Nonetheless, while there are preconceived theories, this multiple case study has a

foundation based on abductive reasoning, that is the refinement of existing theory rather

than inductive or theory creation, or deductive where one has a somewhat preconceived

notion of the outcome. The data will ultimately determine the theoretical implications of

the research (Chenail, 2011).

Research Question

Niels Pflaeging (2015), an advisor on transforming leaders for complexity

explained leadership “Leadership is something natural to groups of human beings. Having

a leader is not” (www.nielspflaeging.com). Adding to the plethora of books released in

2014 on organizational change, Pflaeging (2014) simplified the understanding of traditional

hierarchy first formalized by Taylor in 1911, to the following; “Thinkers/Managers:

strategize, steer, control [and] decide” while “Doers/Workers: execute, obey [and] follow”

and even coined it “tayloristic management Alpha” (p. 4).

There was and still is a price to pay for this division of labor that exists in the vast

majority of organizations today, as is evident in the discussion about orange organizations

(Laloux, 2014). Pflaeging (2014) outlined this price as “systematic gaps” that are formed

and described these gaps as; “1. The Social Gap”, which contributes to “a bias towards

management by numbers and leadership by fear”, “2. The Functional Gap” where a “need

for manager/imposed coordination through process control, interfaces, planning, rules,

standards, hierarchical power etc.” is produced and “3. The Time Gap” which creates “the

division between thinking thinkers and non-thinking doers, between planning and

execution” (p. 5). He concluded with the overarching sentiment that “None of this feels

19

good. None of this creates value for people, customers, or owners: the three gaps all lead

to waste. That’s a high price for the illusion of control” (p. 5).

An interest in organization design and management / leadership led to reviewing the

latest developments and strategies in this field. There are an abundance of experts and

consultants ready to discuss, recommend and implement new ideas with the promise of

greater productivity and a happier workforce as the goal. Selecting only one method of

organizational strategy was difficult but the press around Zappos choosing holacracy as

their approach made it compelling and it seemed like this new approach could provide

interesting research results. The question at the center of the research was: What is the

experience of employees moving from a hierarchical organizational structure to dynamic

governance?

Every one of the companies selected to participate had been operating in some form

of hierarchical structure prior to implementing holacracy. All participants had been

involved with holacracy for a long enough time to understand the differences between top-

down versus shared leadership. A field test confirmed the initial set of questions, however

additional questions not originally included in the field test quickly emerged during the

interviews as relevant and were added in line with progressive focusing (Parlett &

Hamilton, 1976). These additional questions included whether the participant held a

management or supervisory role prior to holacracy and the thoughts regarding

bureaucracy’s impact on decision making.

20

Assumptions and Limitations

Assumptions

The biggest assumption in this research was that a wide range of people were

included, meaning the whole continuum from those who embrace holacracy to those who

were not supportive of holacracy were included in the sample. Honesty was another

assumption and for the most part it appeared to be valid as both positive and negative

feedback was forth coming and sometimes from the same individual. Even in the case

where the participant would not choose to work for another organization using holacracy,

they commented they still favored a shared leadership organization to a traditional

hierarchical one. Shared leadership in its purest form propels an organization towards the

nirvana of teal (Laloux, 2014); however none of the participating organizations were

actually fully immersed in teal behaviors. This assumption perhaps is the most influential

as without the benefit of true shared leadership, holacracy cannot be fully examined.

Finally, there was an assumption that participants were able to separate the

implementation of holacracy from the model or operating system (Robertson, 2015). This

proved difficult for some and muddied the results which could be seen as a limitation,

however as stated in the limitations, these limitations suggest a need for future research.

Limitations

Onwuegbuzie and Leech (2007) concurred that qualitative research is unable to

offer generalizations and this in itself was limiting in the present study as only a small

sample was interviewed. Only 11 participants took part and while multiple companies

were included it cannot be dismissed that only people who were happy with the change

volunteered to participate. There were in fact a number of people who provided negative

21

feedback, however this was a small percentage and so it could be argued the results were

skewed by the sample. Taking this into account, this does not take away from the results

and only strengthens the argument for further and more comprehensive research.

The biggest limitation to the research was time. Holacracy as an organizational

design and model for shared leadership has been around since 2007, nonetheless there are

few companies of any size that have adopted the model for longer than a couple of years.

All participating companies had been involved with holacracy for more than 12 months,

but less than two years and this time frame was not long enough to fully transition any

existing organization to a completely new and radically different management system.

Although several had made significant inroads toward green in Laloux’s (2014) model,

none appeared to have achieved the level of teal at the time of the study, once again making

the case for future research. A longitudinal research study may be the most beneficial

approach to studying holacratic organizational change over time.

Definition of Terms

Holacracy as a new organizational design is not well known and deserves a

comprehensive explanation here, as little academic literature is available to be included in

the Literature Review in Chapter 2. Therefore, prior to the definitions of the other terms

contained in this paper, holacracy will be explained separately.

Holacracy

The evolution of holacracy came about due to a lack of a system that seemed to

work for Brian Robertson when he had his own software company. Like many CEO’s,

Robertson looked to create an organizational structure that would function to meet the

demands of the time. He found little in traditional hierarchy that seemed to adapt quickly

22

enough and drew from the world of Agile and Scrum, both designs having been created to

meet the changing needs for software development. Robertson (2015) was looking for a

method to keep companies “evolving” rather than simply “evolved” (p. 7).

Keeping with the idea of evolution, Robertson (2015) used the analogy of

comparing a holacratic organization to a human body, insofar as there are many parts that

make up the whole. However it is almost impossible to suggest a hierarchy as it can be

contended that without a heart, the body would not function, conversely the same could be

said of a brain, so how can individual parts be presented in any hierarchical power implied

way? Rather they each operate synergistically with each other.

Robertson (2015) described holacracy as, “essentially, it’s a new social technology

for governing and operating an organization, defined by a set of core rules distinctly

different from those of a conventionally governed organization” (p. 12). Robertson

expanded this and suggested it included the following;

a constitution, which sets out the “rules of the game” and redistributes authority, a

new way to structure an organization and define people’s roles and spheres of

authority within it, a unique decision- making process for updating those roles and

authorities, [and] a meeting process for keeping teams in sync and getting work

done together. (p. 12)

Holacracy has its own unique terms and each is described below.

Authority. The most significant change to the traditional top-down hierarchy was

holacracy insisted on self-management by all. Managers were told “it’s no longer your job

to solve everyone’s problems and take responsibility for everything” while workers are

23

told, “you have the responsibility, and the authority, to deal with you own tensions”

(Robertson, 2015, p. 23).

Circles. Visually representing a holacratic organization had a fundimental flaw in

that most diagrams are flat and display in a two dimensional perspective. In this way,

people compare the cirlces within circles as simply a different way to draw boxes below

boxes and therefore in reality is no different to top-down box organizational charts.

Robsinon (2015) even suggested holacracy as illustrated in Figure 2, “looks like a series of

nested circles, like cells within organs within organisms”, however he further noted that no

“part is subjugated to those above it, but retain autonomy, individual authorty, and

wholeness”. (p. 46)

Figure 2. Basic Circle Structure. Reprinted from Holacracy: The New Management System for a Rapidly Changing World, p 47, by B. Robertson, New York, NY: Henry Holt &

Company. Copyright 2015 by R. Robertson. Reprinted with permission.

24

Governance. The distribution of power within an organization still needed a

process and holacracy managed this via governance meetings which focused on the ‘how’

and sets out to define how the organization will look (Robertson, 2015). Integrated with

governance were the other elements and these are demonstrated in Figure 3. Each part

works in rapport with the others and even though it could be considered a bottom-up

structure if a direct comparison is needed, it has been captured with the work and tensions

at the top and the governance at the bottom.

Figure 3. How It Works. Reprinted from Holacracy: The New Management System for a Rapidly Changing World, p 27, by B. Robertson, New York, NY: Henry Holt & Company.

Copyright 2015 by R. Robertson. Reprinted with permission.

Lead and Rep Links. The closest to a management role existing in holacracy is a

lead link who is a person responsible for assigning resources within a circle. This role

looks inwards and does have some authority, however this authority is controlled by the

25

governance process. In constract, a rep link is the conduit to the cirlces outside of their

own circle. Figure 4 reflects the interplay between the circles and the roles.

Figure 4. Linking Circles. Reprinted from Holacracy: The New Management System for a Rapidly Changing World, p 51, by B. Robertson, New York, NY: Henry Holt & Company.

Copyright 2015 by R. Robertson. Reprinted with permission.

Roles. Extending the premise of moving from people to work, the organizational

structure contains roles and no longer reflects titles, departments and people. Holacracy

had been misunderstood as to be “flat”rather than “hierarchial” (Robsinon, 2015, p.48),

however this is incorrect. Instead the hierachy focuses on roles not people.

Structure. To fully appreciate or understand the circle structure of holacracy, the

rationale to deliberately move away from a top-down hierarchy is necessary. Most people

view a top-down traditional hierarchy as simplified by Robertson in Figure 5 as boxes that

26

are set and relationships exist across the dotted lines with clear division of authority. In

reality as clarified in Figure 6, a traditional hierarchy has many underlying influences, both

explicit and implicit. Reversing the perceived power or authority, will not guarantee the

removal of these influences, nonetheless it is presented as a way to mitigate them as the

organization is now role rather than people focused and decisions are made separate to the

individual (Robertson, 2015).

Figure 5. Corporate Structure – How We Believe It to Be. Reprinted from Holacracy: The New Management System for a Rapidly Changing World, p 36, by B. Robertson, New

York, NY: Henry Holt & Company. Copyright 2015 by R. Robertson. Reprinted with

permission.

Tensions. Terminology within new design is nothing new and holacracy presented

several unique terms to better describe what was happening. One of these was “a tension”,

described or explained by Robertson (2015) as the “gap between how things are and how

they could be” (p. 5). Some would simply call these problems and opportunities, however

27

in an attempt to neutralize the term, a tension is neither positive nor negative, just

something that needs to be dealt with at some point.

Figure 6. Corporate Structure - How It Really Works. Reprinted from Holacracy: The New Management System for a Rapidly Changing World, p 37, by B. Robertson, New York,

NY: Henry Holt & Company. Copyright 2015 by R. Robertson. Reprinted with permission.

The Game. Often people engaged in the holacratic process will refer to holacracy

as a game and HolacracyOne, the company created by Robertson to provide the

implementation and support for holacracy even use the term. In any game there is a set of

rules that everyone playing the game needs to comply with and abide by and sometimes

there is even a referee who takes on this role. There is little need for a referee in a

holacratic organization as the constitution provides the structure for the rule book which

like the United States Constitution is a living document with the flexibility to be appended

and added to by a well understood process.

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Non Holacracy Terms

Terms that are independent to holacracy and reflect the broader understanding of

leadership, management and organizational design are highlighted. Definitions of terms in

this study include the following:

Collectivistic Leadership. Yammarino, Salas, Serban, Shirreffs, and Shuffler

(2012) introduced the notion of “we” (p. 382) leadership and identified this as occurring

when individuals take on and relinquish leadership both formally and informally.

Distributed Leadership. English (2008) proposed that “some of the functions of

leadership can be delegated or embedded in other persons or roles in an organization”

(p. 115). Harris (2008) in the same year as English added to the definition by contributing

that the “core assumption is that each member has some leadership abilities that will be

needed by the group at some time” (p. 174).

Dynamic Governance. An open system that emerged and solidified the social

system model and reflects more of a community orientation within governance (Ackoff,

2002; Handy (1995).

Green Organizations. The “pluralistic” approach where “fairness, equality,

harmony, community, cooperation, and consensus” are valued and “power and hierarchy”

are less than ideal (Laloux, 2014, p. 31). Key attributes are “empowerment, a value-driven

culture and inspirational purpose” in addition to a “multiple stakeholder perspective” (pp.

32-33) where many organizations overlaid the concept of shared leadership on top of a

traditional hierarchy.

Laissez-faire Leadership. Described by Bass and Avolio (1994) “Laissez-faire

(LF) style is the avoidance or absence of leadership and is, by definition, the most inactive

29

as well as the most ineffective according to almost all research on the style” (p. 5), thus

making it less relevant to this study. It has however been included as one of the three

modern leadership styles found in studies and so will also attract some if not limited

conversation in Chapter 2. It has been labelled by Wegner (2004) as “a nontransaction

between leaders and followers” (p. 24).

Leadership. Many authors provided definitions about the various forms of

leadership that have existed and many are interlaced with the management style of the time

and will be discussed at length in Chapter 2. One of the earliest modern comprehensive

definitions of leadership to be widely included in research studies is that of Burns (1978)

who stated leadership was; “the reciprocal process of mobilizing, by persons with certain

motives and values, various economic, political and other resources, in a context of

competition and conflict, in order to realize goals independently or mutually held by both

leaders and followers” (p. 425).

Management. Rose (2005) provided a substantial explanation to start the dialogue;

First, there is a ‘technical’ explanation – that management arose to solve the

functional problems of large-scale organization. Secondly, there is an ‘elite’

explanation – that management arose to define and defend the interests of a

particular group, namely managers. Thirdly, there is a ‘political’ explanation – that

management arose in order to control and discipline workers. (p. 55)

Management as a theory will be fully reviewed, compared and contrasted in Chapter 2. It

will be deemed for the purposes of this study to be interchangeable with leadership as an

overarching concept as many of the management theories involved leadership and follower

elements.

30

Orange Organizations. The majority of organizations maintaining traditional top-

down hierarchical structures would be considered orange with “innovation, accountability

and meritocracy” (Laloux, 2014, p. 26) as key attributes and power being directed from

above, however with power and position being determined by performance and ability

rather than some noble title bestowed by birthright.

Shared Leadership. An umbrella term for all types of leadership originating with

the thought that leadership is “simultaneously multidirectional based on a dynamic give-

and-take relationship” (Pearce, Wassenaar, & Manz, 2014, p. 277). Small and Rentsch

(2010) pronounced it as “an emergent process of mutual influence, in which team members

share in performing the leadership functions of the team” (p. 203) based on the earlier work

by Pearce and Sims (2000). Multiple terms are used interchangeably and will be afforded

greater scrutiny in Chapter 2.

Teal Organizations. Presented “organizations as living systems” and key

attributes of “self-management, wholeness and evolutionary purpose” (Laloux, 2014, pp.

55-56) revolved around the individual first and then the organization.

Transactional Leadership. One of the modern leadership labels to emerge to

support the top-down management style (Bass, 1985). Some shared the thought that

transactional leadership was more about the leader than the follower (Burns, 1978;

Northouse, 2004), but was also focused on punishment and rewards (Avolio & Bass, 2002;

Northouse, 2004), where intervention was for the purpose of quality control of output and

could take a passive or active position (Rowold & Rohmann, 2009).

Transformational Leadership. Not a new concept, Burns (1978) explained the

idea of the transformational leader suggesting a focus on the follower, rather than the

31

leader. Bass and Riggio (2006) concurred that the transformational leader will inspire

followers by unifying values to modify attitudes.

Ubiquitous Connectivity. The last of Collins’ triggers influencing change.

Recognizing the other two, “accelerating change” and “escalating complexity” are

important; he suggested the always on premise of the “digital revolution” (Collins, 2014,

pp. 8-11) amplified the others and we are almost unconsciously unaware of our

connectivity and instant availability.

Expected Findings

Qualitative methodology can be used to further recommend additional research and

this study aims to be one of the pioneers in research on holacracy, just one of the shared

leadership models emerging in the 21st Century. The significant difference between other

models that allow some self-determination via self-management or shared leadership is that

holacracy proposes to remove the top-down hierarchy and replace it with an organic self-

regulating organism. Difficult to represent in a 2D flat manner, holacracy is sometimes

considered simply a hierarchy of circles instead of boxes. Organizations who engage in a

dynamic governance approach may need to modify their talent management practices due

to the behaviors necessary to fit with the new structure.

Robson, Schlegelmilch and Bojkowszky (2012) included the elements of

competence, relatedness and autonomy reflected in Deci and Ryan’s self-determination

theory and it is anticipated these will interact with dynamic governance within the

organization. Self-determination is only an option if the opposite to top-down management

style of leadership is embraced by the existing leadership. It is expected that some

32

resistance will be presented by those not only losing their title and authority that goes along

with that title, but also those that no longer have any lead role in the new structure.

Organization of the Remainder of the Study

Holacracy as an organizational design has little academic research and so Chapter 1

contained more than a typical introductory chapter due to the inclusion of non-peer

reviewed literature to set the stage. This study had as its purpose the examination of people

who have experienced the move from traditional hierarchy to shared leadership and the first

chapter used industry experts to illustrate the change needed to move to complexity

Chapter 2 presents the peer reviewed literature on the theories supporting and intertwined

with organizational design and shared leadership. The methodology is outlined in

Chapter 3 with the discussion about data collection and analysis captured in Chapter 4.

Results, conclusions and recommendations are contained in Chapter 5.

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CHAPTER 2. LITERATURE REVIEW

Introduction to the Literature Review

Karl Marx noted the industrial age created the factory system as larger corporate

structures began to emerge based on technological advancements of the time, bringing with

it significant impact to the working class (Mokyr, 2001). Transportation and

manufacturing led to the development of organizational structures to control the output and

profits for owners. Mokyr (2001) remarked that the introduction of best practices were an

unforeseen consequence of the factory system. Early in the 1900’s Taylor presented his

system of scientific management which evoked strict standardization of methods and best

practices to foster greater productivity. The industrial age has been replaced by the

information age and by the knowledge worker for a large percentage of organizations as

technology has removed the need for the production lines of the past in favor of robotics,

and the rise of the internet factored in a completely new set of considerations not

previously even imagined. As jobs change, so typically does the organizational structure.

Wheatley (2007) suggested organizations evolved in much the same way as

organisms in nature; whereas organizations were previously considered a separate physical

construct, they were now widely viewed as a collection of people who came together to

achieve mutual objectives. Sennett (1980) and Ackoff (1981) were pioneers in the early

eighties of what could be today referred to as corporate culture. Both authors wrote

seminal books on the topic, long cited by their contemporaries. More recently Ackoff

34

(2002) himself moved from his long held belief of the ‘God’ theory describing the ultimate

power of one individual as a relic of the past. Instead, Ackoff (2002) suggested as large

public companies shifted power to shareholders and other stakeholders, the organizational

structure shifted more to the sociocractic approach or in other words governance occurred

by a group of like-minded individuals driven by a common goal (Buck & Endenburg,

2003).

Scott and Winiecki (2012) outlined the migration from system models offered by

Ackoff to the typology of the new field of human performance technology (HPT), however

HPT offered “systemic thinking” and for the most part “mechanical, rational systems”

(p. 85). What is deficient in HPT is the discussion concerning open systems and inclusion

of personality or humanity within the organization. Checkland (2000), the pioneer in soft

systems methodology (SSM), came closest to holacracy insofar as SSM offered roles,

norms and values; however SSM suggested more of a framework for problem solving than

a complete organizational structure. Integrated product teams (IPT) or self-directed teams

(SDT) form the basis for the open system organizational framework holacracy presents,

and while research exists on IPT, SDT and hierarchical structures (Grigg, 2010; Kauffeld,

2006; Langfred, 2007; Proença, 2010; Zitek & Tiedens, 2012), there is no significant

research on holacracy specifically and its impact to employee efficiency.

The literature review provides some academic perspective on the theory behind

holacracy, which is for the most part, a non-peer reviewed extension of shared or

distributed leadership. Multiple sources, both peer reviewed and seminal books on shared

leadership were at the center of sourcing relevant authors who contributed to the topic.

Google Scholar was utilized to obtain a wider source than simply relying on the databases

35

available in the Capella University online library. Once found via Google Scholar, the

articles were then accessed for academic integrity and only included if they met the peer

reviewed criteria. Many articles were utilized simply for the definitions of the different

terminology and labels attributed to leadership styles over the years. Additionally, 25

studies were reviewed to ascertain the positive and negative impacts these styles had on

performance.

Search terms used to source articles were shared leadership, distributed authority,

integrated product teams, transactional leadership, transformational leadership, laissez-faire

leadership, collective leadership, culture, management styles, teams, dynamic governance,

organizational citizen behavior, organizational performance, complex adaptive systems.

When looking specifically at the models of dynamic governance, additional search terms

were entered both into the Capella psychology database libraries and Google Scholar and

these included; appreciative inquiry, cellular networks, conscious capitalism, deliberate

democracy, lattice, public value approach, sociocracy, wiki management, wise democracy.

Additionally the terms that describe green and teal organizations along with holons that

describe the concept behind holacracy were engaged in searches. Further articles resulted

from reviewing the reference list in each article found and sourcing the original and

assessing the scientific merit and relevance.

Theoretical Orientation for the Study

There are multiple sub-theories that address changes in organizational structure;

these being leadership, classic organizational, self-determination, motivation and human

relations, nonetheless they all can place their roots back to management theory. It can be

argued that they are all intertwined and none exist in a vacuum. The fact that is significant

36

is that all these sub-theories have developed over time and evolved to meet the needs of the

society at the time (Kulesza, Weaver & Friedman, 2011).

Management and leadership at the organization level and managers and leaders at

the individual level, mirror the dichotomy illustrated by Antonakis and House (2002) who

suggested the first is bureaucratic-transactional and the other charismatic-transforming.

The prior has “control, contracts, rationality and stability”, the other has as its focus

“creating visions, promoting values, risks and changing the status quo” (p. 6).

Understanding the difference between management and leadership has been the topic of

many scholars, however most current or modern scholars writing from the turn of the 21st

century agree that “leadership has always been focused on behavior” and two separate

distinct constructs exist (Hyldelund & Fogtmann, 2011, p. 5). Hyldelund and Fogtmann

further noted that in order to achieve results and guarantee things get done, a hierarchical

structure was implemented. In contrast, “creating excitement and enthusiasm” (p. 5) in

order to achieve results was the key difference when defining leadership. A “paternalistic

relationship” (p. 13) was suggested and reflected the familial hierarchical structure where

the father was the head and all family members were under his control.

Viewpoint (2011) concurred with this in so far as the punishment and reward

system often seen in families and that managers were responsible for the direction,

implementation of objectives and the solving of problems. Managers, it seemed were not

held in high regard with Zaleznick (1978) commenting that it “takes neither genius nor

heroism to be a manager, but rather persistence, tough-mindedness, hard work, intelligence,

analytical ability and, perhaps most important, tolerance and good will” (p. 4). In contrast,

leadership was forward thinking and not so much concerned with the day to day, rather

37

instead of punishment and reward, the leader had “power to influence the thoughts and

actions of other people” (Zaleznick, 1978, p. 2) and created followership. In addition, the

leader had other qualities which were coined “emotional intelligence” or “self-awareness,

self-management, social awareness and social skill” (Goleman, 2000, p. 80).

Leadership style seemed to be influenced by whether the followers were indeed

ready to follow (Hersey & Blanchard, 1969). Earlier, Fiedler’s (1958) work discussed the

effectiveness of a leader as driven by style and situation, noting that true effectiveness

required both. It took many years to expand on his theory (Fiedler, 1996) and furthered the

belief held by Hersey and Blanchard (1969) in a correlation between an employee’s rank

within the organization and the ability to perform autonomously. The lower the employee

resided, the less autonomy the employee was capable of handling, in addition the

confidence in the leader and routine nature of the job impacted the effectiveness of

leadership (Fiedler, 1996). The growth and adaption of theories over time supports the

notion that management theory is not static, even for the same author and is in a continuous

state of transition.

Management theory over time has provided rigor and structure for organizations to

follow and holacracy as an organizational model is no different. In looking to the future, it

is well advised to review the past. Almusaileem (2012) suggested there were really three

distinct management theory periods that reflected changes over time; these being classic

which included bureaucratic, scientific and administrative management styles; human

relations which reflected the need to include the behavioral elements and was also known

as group dynamics, and contemporary which introduced the notion that not one style was

38

suitable for all occasions and managers were there to obtain the best from the workers

using the method or style best suited to the individual and the situation.

Pellissier (2011) had earlier reflected on management theories over time and while

concurred with the first two, suggested contemporary methods extended well past the

simplistic notion presented by Almusaileem. Table 1 illustrates the migration from

scientific management in the early formation of businesses through the behavioral

approaches during the war years, system or contingency approaches of the seventies and

eighties, the operational or lean manufacturing focused in the late eighties and early

nineties to the business improvement or key performance indicator period made possible by

technology and finally to the most recent complexity era that sees the return to the family

oriented framework which existed in the very beginning prior to Taylor.

Complexity and collaboration sees leadership driven by the needs of the worker and

the purest form of shared leadership or distributed power. It can be seen that many

contributors have taken part and the economic environment definitely was a contributing

factor in eliciting change in leadership style (Pellissier, 2011). In Table 1, it is necessary to

note that each period is not a clear number of years and the theories overlap from one

period to another as not all businesses were at the forefront of change. These periods and

their contributors’ theories are discussed in order to understand the development of

management to leadership and beyond. Each has their strengths and weaknesses and

contributes to why shared leadership or distributed power may or may not be a viable

leadership model for the next generation of workers.

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Table 1. Summary of Evolution of the Management Models

Period Focus Contributors Environment

Scientific management

(late 1700s to early

1900s)

Specialization,

Functional Approach

Work Study

Assembly lines

Administrative Theory

Planning and Control

Systems

Smith, Watt, Babbage,

Taylor, Fayol, Galbraith,

Ford, Sloan

Industrial Revolution

World War I Depression

Professional Managers

Behavioral Sciences

(1940-1960)

Participation, Incentive

Schemes, Ergonomics,

Hawthorne Studies

Mayo, Barnard, Drucker

World War II

Unionization

Reconstruction

Management Science

and Systems

Engineering (1960-

1980)

Operations Research

Simulation Modeling

System Dynamics

Systems Engineering

Logistics,

Total Quality

Management

Forrester, Deming,

Juran, Blanchard

Economic growth

Rise of the defense

industry

Cold War Oil crises

High Technology

Investments

Vietnam War

Operations Management

(1980-1990)

Manufacturing

Planning and Control

Just-in-Time,

Business Logistics

Productivity

Management

Lean production

Ishikawa, Taguchi,

Shingo, Juran

Competitiveness Rise of

Japan

Large military spending

Economic recession

Business

Transformation (1990-

2000+)

Strategic Management

Business Reengineering

Theory of Constraints

Benchmarking

Information

Technology,

Organizational Learning

Hammer, Davenport,

Martin, Senge, Goldratt,

Porter, Prahalad, Hamel

Transformation of

various governments

New world order

New socio-economic

problems

Dominance of IT sector

[And, more recently]:

Complexity (2000+)

Complex adaptive

systems (CAS)

Non-linearity

Collaboration

Resilience

Innovation

Emerging

Networked environment

Pattern seeking

Follows questions

Technology is intrinsic

Business as an organic

collective

Reprinted from The Implementation of Resilience Engineering to Enhance Organizational Innovation in A Complex Environment, p 162, by R. Pellissier, 2011, International Journal

of Business and Management. Copyright 2011. International Association of Organizational

Innovation.

40

Management Theories

Scientific Management (late 1700s to early 1900s)

Frederick Taylor is undoubtingly the founder of management theories in the United

States, as many of the modern theories on leadership can trace their roots back to Taylor.

While Taylor endeavored to study the employee process to improve performance and pay a

fair wage for a fair contribution, he lacked the understanding that modern leadership

theories have captured; that is that financial rewards are not the only incentive needed for

employees to be engaged and effective (Cheretis & Mujaba, 2014).

Scientific Management Theory. Scientific management in its simplest terms was

a theory that would lead to “increased productivity, lessened costs, enabled lower prices,

and, as a result, more sales and greater profits” (Crainer, 2003, p. 48). Taylor wanted to

make things better, and while attractive to employers as they could accurately predict

outcome, it resulted in manufacturing workers being reduced to working in a system of

payment per piece which led to a reduction in pay for many employees. The government

even got involved in 1912 with the banning of stopwatches in government facilities

(Crainer, 2003).

Taylor was somewhat an idealist and wrote in his book, The Principles of Scientific

Management that, “The principal object of management should be to secure the maximum

prosperity for the employer, coupled with the maximum prosperity for each employee”

(Taylor, 1911, p. 17). This rarely came true unless all companies operated under the same

principles. The downside of Taylor’s approach if one has to be found was that the role of

manager or supervisor was to measure the results of output, not necessarily contribute to

the output; the upside to measuring output was that management knew exactly how long it

41

would take to make something and that the output would be consistent (Drucker, 1998). In

addition to the downside noted above, the more pressing downside was that ethics often

limited efficiency.

Administrative and Bureaucratic Theory. Henri Fayol and Max Weber being

French and German respectively contributed to their work being ignored in their times, as

their works were not translated into English (Cheretis & Mujaba, 2014). Cheretis and

Mujaba (2014) explained that the administrative and bureaucratic approaches for the first

time were focused on the structure of the organization and not the process to increase

efficiency. Crainer (2003) suggested Fayol was responsible in making the term

management a discipline in its own right and the Frenchman perpetrated that management

was universal to all businesses, regardless of what type of business. A fundamental

extension of Fayol’s work was that management if defined as a principle, could therefore

be taught and this is proven in the western world all these years later by the fact that a

Master of Business Administration degree exists (Crainer, 2003).

Fayol’s 14 ‘general principles of management’, as outlined in Crainer’s 2003 work

were described as:

the universal characteristics of management included the division of work; authority

and responsibility; discipline; unity of command; unity of direction; subordination

of individual interest to general interest; remuneration of employees; centralization;

the scalar chain; order; equity; stability of personnel; initiative; esprit de corps.

(p. 42)

42

Wren and Bedeian (1994) used Fayol’s own statement:

All employees in an enterprise participate to a degree in the administrative function

and have occasion to exercise their administrative faculties and be noticed for them.

Those who are particularly talented can climb from the lowest rung to the highest

levels of the hierarchy of an organization. (pp. 213-214)

to illustrate Fayol’s emphasis on organizational structure. While Taylor was focused on

process, it is clear from this statement Fayol was beginning to move away from simply

process and towards people, although in reality it was more about rules the people would

adhere to and less about providing any autonomy to the workers.

Like Fayol, Weber had principles that were fundamentally based on rules and many

authors (Albrow, 1990; Du Gay, 2000; Hennis, 1988; Kalberg, 1980; Scaff, 2000)

discussed these in their works on management theory. They described these rules as being

something that was inherent in the human condition; in some way a social force that

conditioned a hierarchy or a rationale for contributing to society through work behavior

even if decisions made within the organization differed from the individual. This was only

true when the individual felt the organizational decisions were legitimate. Cheretis and

Mujaba (2014) along with others (Ostrom & Ostrom, 1971; Ostrom, Tiebiut & Warren,

1961; Savas, 1987) reflected some limitations to an organization that became too

bureaucratic as while engaged employees could assist in company growth, too much red

tape or levels of hierarchy in decision making could quickly act as a demotivating force for

once-engaged employees.

Bartels (2009) concurred and suggested that bureaucracy encouraged “mindless

implementation of hierarchical orders, which leads to justification of inhumane action and

43

misplaced social outcomes” (p. 456). Osborne and Plastrik, (1997) discussed and defined

bureaucracies as:

systems designed by a genius to be run by idiots. That may be a little harsh, but it

contains a kernel of truth. In the soul of the bureaucratic machine there lurks a

control freak. Employees are cogs in a highly regulated machine. Their work is

broken down into different functions and described in great detail. Managers do the

thinking; workers do the task they are assigned. Detailed rules and procedures

specify behaviors. (p. 17)

Behavioral Sciences (1940 to 1960s)

The individual or worker as a separate entity and not an automaton began to appear

after World War II and the concept of motivation was introduced as significant in reaching

organizational goals (Jones & George, 2011). Taylor being the previous pioneer in

management theory had a challenger in 1913 when Hugo Munsterberg’s human relations

theory (HRT) started to replace his theory of scientific management and HRT could be

seen as the dawn of industrial psychology (Almusaileem, 2012).

Péter and László (2008) discussed the influence the world wars had on management

theory and while Taylor had become a success in Europe even more so than French born

Fayol; the impact of the Second World War (WWII) can be seen as far more influential in

the evolution of management theory in the United States. Peter Drucker was a Fayolian

advocate and brought these theories to the United States during the migration of Europeans

after WWII.

Human Relations Theory. Kurt Lewin, Chester Bernard and Mary Parker Follett

followed Munsterberg; however the most notable perhaps was George Elton Mayo who ran

44

experiments to determine scientifically the impact to production when including behavioral

facets. Mayo began his work in Australia and travelled to the United States in 1926 and

contributed significantly to the establishment of what is now known as organizational

behavior. Morsi and Idris (2001) presented the results of Mayo’s research which described

workers as having the following qualities:

the individual is a human being who has both a psychological and social

composition; the individual is a member of an informal group whose behavior is

influenced by the values and behavior patterns of that group; the individual's

productivity is affected more by the increased attention, recognition, and

appreciation on the part of supervisors and management, and not by the increase of

wages and other material factors; the management should be aware that the

improvement of human relations, social contacts, and moral rewards are important

factors for work motivation and increasing productivity. (p. 66)

The human relations movement gained much by the contributions of Mayo,

however as Rose (2005) argued, HRT had many other pioneers prior to Mayo and even the

Hawthorne Studies of the 1920’s and 1930’s could not take all the credit in leaping to a

seemingly diametrically opposed alternative to Taylor’s vision. The Hawthorne studies

illuminated the influence modifying the environment had on the workers; nonetheless the

simple inclusion of the control group had an increase in production output (Halpern,

Osofsky & Peskin, 1989; Rose, 2005). Rose furthered there had been evidence of the

Quakers and other religious groups wanting to “meet the moral needs of workers” (p. 45).

In contrast, Taylor was seen as wanting to devoid the organization of the human or

informal aspects, whereas that wasn’t entirely the case, he simply wanted to “overcome its

45

effects” (Rose, 2005, p. 45). Taylor’s vision fell considerably short of the behavioral

movement in many respects, nonetheless it reflected a style to “avoid human relationships”

while HRT reflected a style to manage “through human relationships” (Rose, 2005, p. 46).

While Scientific and HRT perhaps considered a dichotomy which presented an either or

scenario, contemporary theories expanded to illustrate the need for context and not one

approach for all, as was the case with the classic and human relations periods of

management theory.

Lewin was the first psychologist to label management styles and included

“authoritarian, democratic and laissez-faire” (Péter & László, 2008, p. 189) in the results of

his research into group leadership. Follett is most representative of a holacratic approach to

management as the term democratic governance was first introduced in her work. Cheretis

and Mujaba (2014) reflected on comments made by Follett and Graham in 1995 about

Follett’s earlier works:

Follett’s brand of democratic governance cannot be achieved by the mere transfer

of formalized powers or by passive acquiescence to what is done in our name. It can

be created only through the decisions of the individuals directly involved in a

situation. (p. vii)

They furthered when they remarked that Follet’s work “indirectly corrected flaws in

that theory by taking a horizontal instead of a vertical chain-of-command approach to

authority and understanding the importance of employee empowerment to creating value

for a company” (Cheretis & Mujaba, 2014, p. 6).

X&Y Theory. Douglas McGregor, the notable author of Theory X and Y or the

punishment and reward management practices added to the conversation around behavior

46

and attitude and their impact on performance (Cheretis & Mujaba, 2014). These authors

remarked that McGregor’s Theory X and Y could also be the foundation to “value-driven

management” (p. 6), with the treatment of employees directly contributing to their actions.

This value-driven style can be reflective of the thoughts and drivers of the employers, with

micro-management and little autonomy being given to employees as the key element to

theory X and the view that people were lazy and only contributed through fear of

punishment. Theory Y in contrast, found employers showing trust in employees to

contribute and rewarded them and viewed employees as wanting to contribute and have

some autonomy.

Managers who functioned under a Theory X style operated using assumptions about

the employees that included; “people dislike work and will avoid if possible” and “the

average human prefers to be directed, wishes to avoid responsibility, has little ambition,

and wants security” (Bobic & Davis, 2003, p. 244). McGregor (1960) himself suggested

people needed to be “coerced, controlled, directed, and threatened with punishment to get

them” (pp. 33-34) to work. Other authors, (Tausky, 1992; Wilkinson, Godfrey &

Marchington, 1997) proposed that perhaps if a worker did not know how or did not have

the skill to perform a task, this could be construed as laziness; whereas what was needed

was initial direction, rather than ongoing micromanagement.

McGregor had identified the management style that had emerged as a result of the

Great Depression and the world wars and named it Theory X. In the 1950’s after studying

enterprises for the last 30 years, he reflected upon other assumptions made by another

management style and named this Theory Y. Assumptions McGregor (1960) concluded

that contributed to this new management style were:

47

the expenditure of physical and mental effort in work is as natural as play or rest;

external control and the threat of punishment are not the only means for bringing

about effort toward organizational objectives. Man will exercise self-direction and

self-control in the service of objectives to which he is committed; commitment to

objectives is a function of the rewards associated with their achievement; the

average human being learns, under proper conditions, not only to accept

responsibility but to seek it; the capacity to exercise a relatively high degree of

imagination, ingenuity, and creativity in the solution of organizational problems is

widely, not narrowly, distributed in the population; under the conditions of modern

industrial life, the intellectual potentialities of the average human being are only

partially utilized. (pp. 47-48)

The basis for these changes concentrated around how the idea or work had changed from

the 1920s to the 1960s with the resemblance to Maslow’s (1943) hierarchy fading as the

basic needs of individuals were met and now people looked at other aspects in their

working life.

The significant changes were noted by Bobic and Davis (2003) and career paths,

job security and satisfaction along with the preference of creativity over security were the

issues important to the current worker. Bobic and Davis also noted that while there were

emerging changes from the employee perspective, there was the long-held belief a worker

could be guaranteed a job for life with a company, should they want it. This is not the case

today. McGregor himself had surmised that Theory X wasn’t necessarily the best or most

productive management method and commented in 1960, “Only the management that has

confidence in human capacities and is itself directed toward organizational objectives

48

rather than toward the preservation of personal power can grasp the implications of this

emerging theory” (p. 160). Early management theories continue to be examined and used

as a basis for development of current theories, whether consciously or subconsciously, as is

the case of holacracy as McGregor’s Y theory can be seen in its distributed authority.

Cheretis and Mujaba illustrated this when they commented in their article printed in

an Advanced Management Journal in 2014 about Theory Y as being a “form of

management [that] leads to higher employee satisfaction and productivity in the long term”

(p. 6). Bobic and Davis (2003) earlier than Cheretis and Mujaba argued against the

wisdom of Theory Y as being the magic panacea for maximum performance and Theory X

as being archaic due to human nature. While a decade could make a significant difference,

Bobic and Davis made a rational argument insofar as the more creative the individual, the

more they would be in favor of a Theory Y form of management. In opposition to that,

Theory X was in a lot of ways based on Maslow’s theory of needs and the authors and

other scholars (Fernando, 2001; Staw & Epstein 2000) suggested that Theory X is still

prevalent, not because of its superiority over Theory Y, rather that Theory Y is lacking in

understanding of basic human nature.

An argument could be made that using Maslow (1943) as a foundation of his

management theory presented limitations as Maslow’s research into motivation was at a

personal level and did not reflect the work context (Bobic & Davis, 2003). In addition, the

ability for an individual to reach the peak of Maslow’s pyramid is highly questionable in a

work setting (Hansen, 2000). Bobic and Davis further noted there was a suggestion that

Maslow’s work had a cultural bias, and there is little evidence that this management style

will be valid for a culturally diverse workforce. Lastly, Rowan (1999) contributed to the

49

conversation about the limitations in basing Theory X on Maslow due to the nature of

movement up and down the pyramid and the different needs necessary depending upon the

direction being taken.

Management Science and Systems Engineering (1960 to 1980)

The wars fundamentally changed the makeup of the workforce as women had taken

on roles previously considered the domain of men. In addition to this, soldiers needed to

readjust to being workers and not soldiers. The United States had thrived under the

influence of Taylorism in many industrial factories and this furthers the notion that there

was not a clear cut division of one management theory at a time as McGregor’s Theory X

and Y was evolving in parallel, along with the other behavioral based theories born from

HRT. Mele, Pels and Polese (2010) asserted that as far back as Aristotle, knowledge was

the contribution or understanding of the total entity rather than that of the single units.

With that being said, there were many that struggled with this as it related to management,

as previous theories had been more focused on the individual elements in the process as

was the case with Taylorism and the individual person in HRT.

A new approach dubbed systems theory reflected the interest in the dynamics

between the system and its parts (Bogdanov, 1980; László, 1996; Meadows & Wright,

2008; von Bertalanffy, 1968). Capra (1997) reflected on a holistic approach which was not

that different to the work of Follett and cited the work of others (Checkland, 2000; Jackson,

2003) that commented that a “shift in attention from the part to the whole” (p. 126) was

necessary to truly uncover what each individual part contributed. Management along with

marketing authors and scholars (Aldrich, 1979; Lawrence & Lorsch, 1967) adopted,

whether they consciously knew it or not, a perception of the organization as a system and

50

began to investigate how the organization and its environment were related. Mele et al.

(2010) discussed the earlier 1968 thoughts of von Bertalanffy where it was emphasized it

was not possible to accurately appreciate the phenomenon unless perceived from “a higher

level: a holistic perspective” (p. 126). This holistic approach differed from holacracy as

systems theory merely engaged in the departmental structure and one person one job,

holacracy has its core, roles and not jobs and that one person can fulfil multiple roles across

different departments.

General Systems Theory. A “complex of interacting elements” was how von

Bertalanffy (1968, p. 14) defined a system. Systems theory developed across multiple

disciplines as an organization is not that dissimilar to nature, nevertheless there were

nuances peculiar to some (Drew et al., 2014; Mele et al., 2010; Pellissier, 2012; Wheatley,

2007). Von Bertalanffy’s approach isolated the similarities and “focus[ed] on interactions”

(Mele et al., 2010, p. 127). Fundamental to the similarities were also the differences

individual elements would contribute with different interactions. Three distinct systems,

these being, open, closed and isolated were identified by von Bertalanffy and Mele et al.

(2010) explained the differences in that open systems combined “exchanges of energy,

matter, people, and information with the external environment”; closed systems reflected

“no exchanges of information and matter, just exchanges of energy” and isolated systems

presented “no exchange of elements” (p. 127).

Many of the sciences contributed to systems theory and have relevance to the

development of open systems; from psychology and sociology we obtained cognitive

aspects (Clarke, 2013) and cybernetic aspects were born from information technology

(Beer, 1972). The result of this contribution is many systems perspectives are still present

51

today, although many have been adapted over time. The viable system model and viable

system approach were notable additions to open system theory. What is of importance to

this phase of management theory is with the wide spread introduction of technology away

from just the factory or production floor, feedback is now available in a timelier manner.

Open Systems Theory (OST). Boulding (1956) along with Katz and Kahn (1978)

discussed the attributes of OST as they related to the ability of an organization to acclimate

to conditional changes in the environment. These changes redirected the energy exchanges

insofar as OST saw the organization as “a system built by energetic input-output where the

energy coming from the output reactivates the system” (Mele et al., 2010, p. 127). OST

suggested an organization able to entertain the notion of external drivers would be more

adaptable and recognize better results as a consequence.

Viable System Model (VSM). The viable system model as the name suggested

was focused on surviving and being adaptable to change (Beer, 1972). It had at its core

cybernetics or information technology that was able to provide feedback and then make

changes based on that feedback. In 2010, Mele et al. reflected on the work of Beer (1972)

and others (Christopher, 2007; Espejo & Harnden, 1989) and condensed how an

organization might use a VSM to restructure for improvement to three components, these

being; “ i) change management; ii) understanding the organization as an integrated whole;

iii) evaluating the essential functions of implementation, coordination, control, intelligence

and policy” (p. 128).

Viable System Approach (VSA). Organization and management combined in a

VSA approach and deliver sub-systems and supra-systems. It almost could be argued that

OST looked externally and VSM looked internal with VSA being the best of both. The

52

analyses of internal component relationships were at the heart of sub-systems and the

systemic influences and the contextual connections of the enterprise were the domain of

supra-systems (Barile & Polese, 2010; Spohrer, Golinelli, Piciocchi, & Bassano, 2010).

Systems Theory Application. Thinking in terms of systems presented the

evolution from independent thought and isolationism to the understanding of the

interrelationship between the organization, its workforce and its environment. The

organization as an entity could be seen to have its own personality and behavior (Mele et

al., 2010). Italian scholars Formisano, Fedele, and Antonucci (2015) were published in a

Chinese business journal and cited their fellow country people, Gatti, Biferali and Volpe

(2009) who mostly wrote in Italian. Gatti et al. (2009) were convinced the intersection of

individual lifestyles, motivations, conditions and social relationship dynamics all

contributed to organizational success. Polese (2010) another Italian scholar, echoed the

earlier thoughts of Gatti et al. (2009) when he stated individuals were important to a

business’ performance. Components of systems theory were applied directly to

management and are included in no particular order of relevance to organizational success.

It needs to be noted however that the concept of a system is reflective upon the perspective

of the observer and is contextual and may lack objectivity.

Senge (1990) was interested in how knowledge became part of the core personality

of an organization, similar to the ability of an individual to learn, develop and grow; an

organization has the capacity to develop. The ability to learn and develop its own

knowledge is created by the organizational system of skills and competencies (Nonaka &

Tacheucki, 1995). Value became a word associated with businesses and the act of value

creation was maintained both at the sub-system and supra-system levels as the organization

53

is viewed at the holistic level (Mele et al., 2010). Quality was reflected in management

with the Total Quality Management (TQM) movement and combined the notion of

knowledge directly into the process of relationships.

The environment is interesting as it relates to system theory as Brownlie (1994)

suggested it is merely a “mental representation embodied in a cognitive structure which is

enacted in retrospect and fashioned out of the discrete experiences of managers” (p. 147).

Moreover the environment is an intertwined network of relationships between stakeholders

(Pfeffer & Salancik, 1978). These authors attempted to define an organizational

environment as an elusive construct rather than the corporal notion understood when the

term is used to explain a concrete or physical structure. This constructed concept is more

useful than a physical one in that the interdependencies embedded into relationships

provide a better and clearer understanding into system thinking.

Relationships are between internal and external, both animate and inanimate within

and without the organization. The engagement between information, functions and people

is critical to system thinking. Mele et al. (2010) remarked moving from “static structural

relationships into dynamic interactions with other viable systems” (p. 131) is what will

make an organization competitive. An organization will limit its ability to be viable and

stable if it is unable to adapt. While adaptation and stability seem counter intuitive, Mele et

al. suggested it is the ability to adapt to “continual dynamic processes” (p. 131) that will

make organizations viable, stability is garnered by learning to adapt. Finally, complexity

as it relates to system thinking redirects the attention to networks and the interaction

between multiple systems. Networked systems combined variety, variability and

54

indeterminacy. It wasn’t until the early 2000’s that complex adaptive systems (CAS)

became part of the management theory conversation.

Total Quality Management. Pellissier (2011) included TQM as part of the

Management Science and Systems Engineering (1960 to 1980) period in part to move it

away from the behavioral aspects of the previous period, as it was much more focused on

process then behavior. Deming and Juran cited as being the fathers of Total Quality

Management (TQM), took the principles of Taylor’s scientific management approach to

Japan after the war in an attempt to rebuild the nation’s industrial sector (Péter & László,

2008). Shiba, Graham and Walden (1993) defined the 1950’s phenomenon rather

succinctly,

TQM is a learning system: Through TQM every size of unit, from individual to

team to company to region and nation, can learn how to learn. TQM can be thought

of a system for learning new skill for the benefit of society ….TQM as a system for

developing individual, team, company and national skill. (p. 534)

Leadership styles in Japan morphed the United States version of Taylorism into a

significant competitive advantage with modern analytical systems adding to defining a new

management methodology. United States scientists had developed “mathematical, logical

and statistical models and techniques” as a result of the war to assist with “long-term

military analysis, forecasting and planning” and when adjusted to business by Ansoff in

1965, created the new and separate discipline “strategic planning and strategic

management” (Péter & László, 2008, p. 190). In addition to the change in process

management theory, the inclusion of human aspects brought the dawn of the discipline of

Human Resource Management.

55

Operations Management (1980 to 1990)

Most of the operations management theories came as a result of TQM. While

Deming and Juran had taken TQM to Japan, the mere cost of land in that country

predicated the need for improvement in the previous system models (Pheng & Chuan,

2001). Low (1992) and later Low and Chong (1999, 2000) discussed how productivity

could be increased by using a new philosophy named just-in-time (JIT). Later JIT was

taken to Europe, Britain and the United States. Many other later theories from the 1980s

through to even the modern day manufacturing companies are still based on JIT, however it

appears that it is being kept more on the production floor than the echelons of management.

Just-In-Time (JIT). Toyota Japan was the architect of JIT. Japanese terms of

Kanban and Kaizen were central to the JIT concept, with Kanban reflecting almost the

energy exchange earlier suggested by von Bertalanffy (1968). Kaizen means continuous

improvement which could not exist without the feedback of the prior system models. Even

though it could be argued that JIT was a production system, Pheng and Chuan (2001)

posited that Toyota realized a commitment to this philosophy was required by top

management and employees.

Lean Production. Translating JIT into English produced the word lean which was

expanded somewhat from JIT to include all the aspects to the production environment and

effective use of resources, it also included looking towards a flatter organizational model

(Pheng & Chuuan, 2001).

Business Transformation (1990 to 2000+)

Many of the principles of Fayol were discarded in the dawn of the internet age,

although the internet was well and truly alive in the early 1990s, the business applications

56

were slow to keep pace. With the internet however, researchers were able to review large

quantities of information and analyze the performance of many more companies. The

transformation of business brought about the transformation of management style and in its

simplest terms can be described as either “autocratic” or “permissive” (Linski, 2014, p. 16)

existing at either end of the management spectrum. Taylorism and Fayolism exist at the

autocratic end and holacracy and shared leadership at the other. As with all spectrums, no

end is better or worse than the other, they are simply different.

Theory Z. William Ocuhi studied Japanese (Theory J) and American (Theory A)

companies and later developed as a result of this study, his merged theory Z ideology (Daft,

2004; Linski, 2014; Lunenburg, 2013). In contrast to the earlier X and Y theories of

McGregor, where he reflected on the differences in management styles of the leaders,

Lunenburg outlined Oculi’s theory as all encumbering and saw the organization as having

one culture and management interested in:

long-term employment, consensual decision making, individual responsibility, slow

evaluation and promotion, an informal control system with explicit measures of

performance, moderately specialized career paths, and extensive commitment to all

aspects of the employee's life, including family. (p. 58)

Organizational culture had been thought about since the early 1900s but it was the

industrial revolution that gave rise to the popular notion of culture and a company having

its own personality (Kaufman, 2001). Others along with Linski, (Jain & Premkumar, 2010)

considered the importance social aspects influenced the company culture and suggested

that management teams needed to highlight and cultivate this personality.

57

Participative management being another name for Theory Z was the first real step

towards the more bottoms up approach to management upon which holacracy is based.

Juechter (1982) identified some potential limitations with this style of management and

considered these three scenarios;

(1) conditioned employees are not prepared to give input because they are unaware

that input is now allowed; (2) employees do not know enough about the

organization, as a whole, to provide valuable input; and (3) employees believe that

the organizational leadership will not take heed of their concerns or the feedback

that is given, if by lower-level employees. (p. 45)

There is a reliance on the employees to want to participate to make this style of

management successful and may not suit all organizations. In clear contrast from the

autocratic style of those leaders with the principle of my way is the right way and no

consultation with employees is necessary, leaders have emerged that had a permissive

approach that valued the input of employees and even presented employees with autonomy

to carry out their duties.

Strategic Management. As businesses transformed from the industrial era to the

knowledge based economy and external factors now impacted business, the focus of

management was to look forward and to strategize about what could happen, rather than

look backward and simply make decisions based on the past. Pellissier (2012) argued this

point and reflected on relationships and desired outcomes rather than process as the process

does not always assure the required result. The focus on the future and the concept of

constant change was highlighted by Pellissier with the introduction of the term “complex

responses processes (CRPs)” (p 43). CRPs represented the notion of time and interaction

58

of humans and the state of “perpetual construction” (Pellissier, 2012, p. 23) as it related to

processes having to adapt to internal and external factors and nothing being predetermined

as it had been in the Taylor and Fayol models. This new term moved management models

from business transformation which to a large degree was still focused on process to

complexity models we find ourselves currently navigating through.

Complexity (2000+)

Most previous models prior to complexity with the exception of strategic

management were concerned with the process to complete the product in the required time

in order for it to be sold. Complexity also has this as part of its model, however in addition

it included nonlinear subsystems and adaption. It understood that systems did not exist in

vacuums.

Pellissier (2012) reflected on the work by Standish (2008) and defined complexity

in this manner; complexity has parts and the mere number of separate unique parts

contributes to complexity, for example a commercial airliner has substantially more unique

parts than a glider; however they practically accomplish the same function. In contrast to

this; a hill of salt could have many more parts than a glider, but not be as complex. Next

there is the number of unique parts, a nursery rhyme and the novel War and Peace are both

created using the alphabet, however the language in the novel would be considered far

more complex. Lastly with complexity there is the notion of context. Central to reviewing

the science behind complexity is the fundamental relationship between elements, be that

people or organizations.

Complex Adaptive Systems (CAS). Pellissier in 2011 cited his previous work and

succinctly illustrated how technology had influence management as a result of the

59

information overload and the ubiquitous nature of communication. He reflected that

complex adaptive systems contained, “relationships and communication”, “the elasticity of

knowledge”, “an overreliance on experts”, “the trade-off between richness and reach”,

“tendency to control” and “speed and innovation” (p. 26). In summary, there was a move

from competition to cooperation. Knowledge is a commodity and has value, everyone can

provide valuable insight without having to be an expert, we are comfortable with shallow

communication when speed and reach take a higher priority over accuracy, power exists by

controlling information, and ability to adapt is essential. Collaboration and innovation are

contained in the concept of complexity and both reflect the nonlinear nature of the modern

management model. The most significant change from the previous models to complexity

is the notion of change and the understanding that growth will be impeded if external

change happens faster than the organization’s internal ability to change.

All the models and theories described above represent the development of

management models over time. Most reflect the change in organizations over time due to

environmental impacts; be that wars, oil crises, technological advances, geopolitical

influences and changes in socio-economics. These management models illustrate for the

most part the heavy reliance on process and the organization as an entity that is producing a

product, rather than a community with a common goal that extends past the walls of the

organization. These models are important as they form the basis of the migration from

management to leadership; be that autocratic in the first instance to the more evolved

concept of distributed leadership which is the central principle behind holacracy.

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Leadership Theories

More important than the management models are the individual leadership models

as these generated the genesis for holacracy. The premise behind this research was that

individuals would want strong direct leadership and would resist any change to a

distributed leadership model as most individuals need someone to follow. Different

leadership models ran parallel with the management models, however became a separate

focus from management with management keeping its’ focus on managing process and

leadership evolving into managing behaviors. Many terms had been used to describe

leadership; nonetheless it makes sense for the purpose of this research to categorize them in

the same manner James MacGregor Burns did in 1978 when he wrote his book on

leadership. He concluded that leadership fell into either one of these classifications; either

you were a transactional or transformational leader.

These differences centered on transactional leadership using the association

between input and remuneration; the concentration on the here and now, the

standardization of motivation versus reward and goals and performance rewards. In

contrast, the transformational leader is always looking forward and engaging the emotions

and seeks to stimulate the individual with growth opportunities.

Hyldelund and Fogtmann (2011) in their dissertation provided a concise reflection

of Antonakis and House (2002) who had earlier categorized the work of previous scholars

to identify five pillars of modern leadership based on the contingency, behavioral and trait

leadership theories of the past; however expanded on these to include the follower. This

summation is outlined in Table 2. In simplest terms leadership styles could be defined as

transactional or transformational, nonetheless the additional term charismatic had been

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introduced early by Weber (1968) which could be either. Recent research reflected the

leadership aspects to management style after the industrial age and the move from scientific

to behavioral. The review of the research literature will therefore focus on leadership styles

as these directly relate to holacracy as it is more of a leadership than a management trend,

although it heavily influences process.

Table 2. The Five Pillars of Modern Leadership

1. Charismatic

Leadership

2. Transactional

Leadership

3. Empirical

Studies on

Charismatic

Leadership

4. Managers vs.

Leaders

5. The Leader-

Follower

Interaction

Max Weber (1968)

introduced

charismatic

leadership. He

argued that in times

of crisis followers

would place their

own fate in the

hands of a

charismatic leader.

However, once

stability was

restored, the

organization would

shift back to its

“natural”

bureaucratic state.

Downton (1973)

introduced the

concept

transactional

leadership, where

leadership is

conducted through

exchanges and

rewards between

leaders and

employees.

Conversely, he

argued that

charismatic leaders

were able shift the

status quo by

persuading others.

House (1997)

was the first to

conduct

empirical studies

on charismatic

leadership. He

found that

charismatic

leaders would

challenge the

status quo and

establish

emotional

connections with

followers and

create a sense of

appreciation and

adoration of the

leader.

Zaleznik (1978)

discussed the

difference

between

managers and

leaders. He saw

managers as

rational,

bureaucratic and

seeking

stability,

whereas leaders

were creative,

visionary and

users of

emotional

attachment to

followers‟

values in order

to realize these

visions.

Burns (1978)

discussed how the

leader-follower

interaction would

always be either

transactional or

transformational

and that the two

cannot exist

simultaneously.

Reprinted from The New Leadership Genre, p 6, by A. Hyldelund, & H. C. Fogtmann,

2011, Doctoral dissertation). Retrieved from studenttheses.cbs.dk. (x656699743).

http://hdl.handle.net/10417/2621. Copyright 2011 by A. Hyldelund, & H. C. Fogtmann.

62

Review of Research Literature

Burns (1978) provided his definition of leadership stating:

leadership is the reciprocal process of mobilizing, by persons with certain motives

and values, various economic, political and other resources, in a context of

competition and conflict, in order to realize goals independently or mutually held by

both leaders and followers. (p. 425)

Kotter (1999) noted “leadership is the development of vision and strategies, the alignment

of relevant people behind those strategies, and the empowerment of individuals to make the

visions happen despite obstacles” (p. 10). More recently, Kouzes and Posner (2007)

offered a clearer succinct interpretation “leadership is a relationship between those who

aspire to lead and those who choose to follow” (p. 20). All these scholars made the clear

separation between management and leadership as none of the definitions mentioned

procedures or operations, rather they are more abstract and speak to relationships between

individuals.

Hyldelund and Fogtmann presented a term “new leadership genre” (2011, p. 3) in

their dissertation on leadership and stated that many opposing views exist on what actually

defined good leadership. They concluded that modern leadership generally was reflected

by three leadership theories, these being transformational, servant and charismatic. They

suggested these three styles provided the best opportunity to increase organizational

performance in contrast to the previous styles that were more transactional.

Transactional Leadership

House proposed his path-goal theory in 1971 which concentrated on the carrot and

stick approach, or reward and punishment driving behaviors. This could be seen as being

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transactional along with transformational and was based on Vroom’s 1964 theory of

expectation and looking at motivational drivers. It was situational and the leadership style

was fluid depending upon individual need. House later developed his theory in the mid-

1990s which illustrates how leadership continues to evolve and his theory moved closer to

that of being charismatic than transactional. The mid to late1990s saw great change and

challenges with the dawn and expansion of the internet and led to the evolution of

leadership theories.

Transformational Leadership

The strict notion of the transformational leader was derived from the work by Burns

(1978) and later extended by Bass (1985) and it could be seen to mimic the reward aspect

of the path-goal theory of House, however it included the concept of belief or trust or

confidence in the employee that hadn’t been present in previous styles of leadership. Burns

(1978) explained transformation leadership as “moral in that it raises the level of human

conduct and ethical aspiration of both leader and led” (p. 20). Podsakoff, MacKenzie,

Moorman and Fetter (1990) remarked that the transformational leader should “induce

followers to suppress their own self- interests for the greater good of the organization” (p.

108).

Other scholars of the time (Avolio & Bass, 1988; Podsakoff et al., 1990) and some

more recently (Ardichvili & Manderscheid, 2008; Bass & Riggio, 2006; Cragg &

Spurgeon, 2007; Northouse, 2004; Yukl, 2006; Zaleznik, 1978) noted the goal of the

transformational leader was to influence followers and provide encouragement to exceed

the minimum expectations and reach far beyond the initial expectations. Many other

authors (Einstein & Humphreys, 2001; Kouzes & Posner, 2007; Tichy & Devana, 1990)

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concluded that transformational leaders are able to tap into the very nature of the individual

and change the energy and drivers of those individuals. Bass (1985) suggested this type of

leadership infuses a positive influence and the key drivers of organizational performance

can be affected. Haynes (2007) went further and inferred research supported the notion of

more functional relationships between individuals and their managers as a result of this

type of leadership style.

Theories were constantly being adapted and broadened from the work of others; for

example; House drew from the work of Evans (1970) while Theory U (Scharmer, 2009)

drew from the work by Glasl (1997) that dealt with the development of the organization

from a social aspect. In contrast to the other theories with alphabetical labels, theory U

dealt with the learning of the individual rather than the behavior of the leader. It was a

concept of acquiring new knowledge and allowing self-motivation to change the individual

and was particularly relevant in change management scenarios.

Bass and Riggio (2006) divided transformational leadership into four concepts; (a)

having charisma, (b) being inspirationally motivating, (c) intellectually stimulating, and (d)

providing individual consideration (p. 5). Mumford and Strange (2002) commented on this

and suggested that this illustrated the multidimensional nature of leadership and others

(Dumdum, Lowe & Avolio, 2002; Kark & Shamir, 2002) concurred that this

multidimensional aspect to leadership is the fundamental difference between leadership and

management and results in greater productivity and individual satisfaction.

Hyldelund and Fogtmann (2011) highlighted a limitation of the transformational

style of leadership insofar as it relates to the stability of the organization and they

contended the transformational leader is best suited to times of change rather than in a

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period of stability. In a period of stability, the mere concept of transforming things could

be detrimental. Another limitation as indicated by Graham (1991) was the focus of the

transformational leader will always be organizational rather than individual.

Servant-Leadership

All three of these new leadership genre theories are remarkably similar to each

other with the major difference being the point of reference. The transformational leader

while providing autonomy and the notion that the individual should think for themselves,

the servant leader almost retreats into the background and lets the individual shine.

Robert Greenleaf (1970) first coined the term servant-leadership and he defined it

as “the servant-leader is servant first ... becoming a servant-leader begins with the natural

feeling that one wants to serve, to serve first. The conscious choice brings one to aspire to

lead” (p. 13). Graham (1991) nearly two decades later suggested that “it is the leader who

models service by humbly serving the led, rather than expecting to be served by them,” (p.

111). Smith, Montagno and Kuzmenko (2004) agreed the fundamental difference between

the non-charismatic transformational leader and the servant-leader was the point of focus,

as both styles attempted to offer follower empowerment. The charismatic leader relies on

the ability to be a larger than life figure who elicits a following.

Later Anderson (2009) modernized and removed the emotional sentiment of

Greenleaf’s definition and defined it as “servant-leadership takes place when leaders

assume the position of a servant to their fellow workers” (p. 5). The removal of the

emotion or feeling is interesting as other scholars (Giampetro-Meyer, Brown, Browne, &

Kubasek, 1998; Winston, 1999) albeit earlier in time than Anderson, presented the

fundamental element to the servant-leader as being that emotional connection with the

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individuals. Servant-leadership is almost a calling and is derived from the leader’s innate

qualities of trust and authenticity and lack of ego. Spears (1995) identified 10

characteristics of servant leadership; “listening, empathy, healing, awareness, persuasion,

conceptualization, foresight, stewardship, commitment to the growth of people, and

building community” (p. 13-16). These reflected the most complete list of characteristics,

as Patterson (2003) and Russell (2001) each identified seven and eight respectively. The

lack of evidence tying this style of leadership to organizational performance has limited its

acceptance in favor of the transformational and charismatic leader.

Charismatic Leadership

Max Weber (1968) was the first to identify the charismatic leader. Avolio and

Yammarino (2002) concurred with the definitions provided by Kim, Dansereau and

Kim (2002) when they outlined Weber’s definition of the charisma as having; “1) the

ability to formulate visions or missions, 2) the ability to have extraordinary or exceptional

personal qualities and 3) the notion that charisma needs follower recognition” (p. 146).

Charismatic leadership therefore is somewhat different from the transformational and

servant-leadership styles insofar as they others do not seek out recognition and rather are

still focused on achieving the organizational goals. Like transformational leadership

though, the charismatic leader is essential in times of strife as it is the pull or charm of the

leader that empowers and engages the individuals to excel and achieve. It is also now

extended to charismatic followership (Kim et al., 2002) where in the first instance the

charismatic leader can motivate individuals to contribute and achieve the goals of the

organization whether or not these are in line with the goals of the individual; to the second

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instance where the charismatic leader is concerned with helping individuals achieve their

personal goals which in turn will lead to achievement of the organizational objectives.

Meindl (1993) reflected on the work of Hollander (1978) who recognized early that

leadership was not a solo pursuit, rather the combination of the leader, the follower and the

situation or context they find themselves in. Meindl furthered that “leadership is nothing

without followership” (p. 99). In order for the charismatic leader to be successful, the

leader needs followers and while the term followership has been used in connection with

leadership for many decades it is still considered a relatively new term. Graham (1991)

also reflected on the part followers played in the process and had this definition, “followers

discern the genuineness of the leader’s gift, granting him or her authority over them (...)

[and] are educated human beings capable of constructive creativity,” (pp. 108-109).

Trice and Beyer (1986, as cited by Flynn & Staw, 2004) rejected the premise by

Weber that the personality and behavior of the charismatic leader was the sole success

factor and suggested it was influenced in no small part by the relationship between the

leader and the follower. It was also argued by Meindl (1993), Steyrer (1998) and Howell

and Shamir (2005) that more focus should be aimed at the follower rather than the leader

and future studies could benefit by studying the relationship of the participants rather than

simple the behaviors of the leader as it is definitely a social interaction that is at the heart of

the leadership construct.

Charismatic leadership can cause harm to individuals along with the organization if

they are motivating followers for personal rather than organizational goals (Howell &

Avolio, 1992). While a mission can exist, the unethical charismatic leader uses their charm

in some cases to the detriment of the followers as can be seen by Bernie Madoff and other

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heads in financial organizations who are able to coerce followers. Eatwell (2006) argued

the complexities of the modern world make the charismatic leader better suited to the

sporting field or community groups, as more than charisma is needed to meet dynamic

organizational demands.

Andersen (2009) had a different perspective and stated:

managers in business and in public agencies do not have followers; only political

and religious leaders have followers. Followers are neither hired nor paid. Managers

have subordinates, and they are all employees. Those who are employed by

business enterprises or who work for public agencies do not necessarily share the

goals of their companies or institutions. (p. 11)

Earlier research by Graham (1991) presented transformational and servant-leadership as

derivatives of charismatic leadership with both of them being ethical and motivating. Kark

and Shamir (2002) suggested that followers who are engaged with solving the problem and

generating new ideas are likely to increase the effectiveness of the leader and the

satisfaction of the employee. One common thread in all the contemporary styles of

leadership is the authenticity, trustworthiness and integrity of the leader, nevertheless this

attributes are not always directly correlated to the leader’s overall success (Spears &

Lawrence, 2004).

Laissez-Faire Leadership

In addition to the other three, a lack of leadership or the transactional style referred

to as laissez-faire will be included; however a lack of taking any action does not establish

shared leadership. Ardichvili and Manderscheid (2008) and their contemporary scholars

Rue and Byars (2007) concurred that if followers were left to make decisions for

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themselves, this style of leadership would be called laissez-faire rather than shared

leadership as the word shared, suggested engagement between leader and follower. In the

case of the laissez-faire leader, the follower has no one to follow.

Shared Leadership

Shared leadership has in actuality been around since the beginning of the 1900s in

the business world and this is evident by the necessity as seen by Fayol (1916) to establish

the “only one manager” rule as he was aware of the phenomenon and commented “double

leadership unfortunately [is] frequently existing and causes great damage to large and small

businesses” (p. 47). Gibb’s (1954) thoughts on shared leadership entertained the group

notion went he stated “leadership is probably best conceived as a group quality, as a set of

functions which must be carried out by the group” (p. 884). Fayol saw shared leadership as

a negative whereas Gibbs’ thoughts seem to reflect a more positive outlook.

Many scholars (Choi, Holmberg, Löwstedt & Brommels, 2012; Döös 2015;

Eckman, 2007; Gronn & Hamilton, 2004; O’Toole, Galbraith, & Lawler, 2002; Rosengren

& Bondas, 2010) noted in their research the existence of shared duties, however there was a

definite lack of understanding of how it could be understood and have a framework built

around it (Bolden, Hawkins, Gosling, & Taylor, 2011; Yukl, 2009). Döös (2105) reflected

on the previous work by herself and colleague Wilhelmson in 2003 when they constructed

a categorization of shared leadership as it related to managers and the division of tasks.

This categorization was derived from the abundance of terms coined by previous scholars

beginning with Gronn (1999) and the term leadership couple; co-leadership by Heenan and

Bennis (1999) to leading in pairs (Alvarez, Svejenova & Vives, 2007) and shared

leadership (Pearce & Conger, 2003). Wilhelmson (2006) contributed the term, joint

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leadership along with co-principalship by Eckman (2007) and distributed leadership by

Bunnell (2008) and finally Rosengren and Bondas (2010) introduced two-getherness and

Järvinen, Ansio and Houni (2015) contributed dual leadership.

Pearce (2004) presented the notion of influence between the leaders that was mutual

and dynamic. Moving past the duality of the simple shared leadership model where two

people co-existed in the same role, the matter of leadership led to the development of the

hierarchical organizational chart. This chart presented a clear example of who was leading

whom and who reported to whom. In hierarchical leadership, the locus of control is top

down and organizational outcomes are seen to be directly in the leader’s job description.

Shared leadership moves away from the concept of leader and follower and embraces in its

truest form the flat structure that offers self-empowerment and autonomy.

Pearce and Conger (2003) explained shared leadership as ‘‘a dynamic, interactive

influence process among individuals in groups for which the objective is to lead one

another to the achievement of group or organizational goals or both’’ (p. 1). Pearce along

with his colleagues Manz and Sims (2014) acknowledged the nature of shared leadership

being a meta-theory of the larger overarching theory of leadership and Pearce also

collaborated with Wasenaar and Manz (2014) and determined that “all leadership is shared

leadership; it is simply a matter of degree - sometimes it is shared completely while at other

times it is not shared at all” (p. 276).

Many terms have been included in the leadership vocabulary and include

collaborative, collective, distributed, democratic and dynamic governance to name but a

few. Many studies have been undertaken to research leadership styles during the last one

hundred years and many styles have evolved based on the economy and environment at the

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time. The focus of the next section will be studies that concentrated on contemporary or

emerging leadership styles as these are most closely aligned with the premise behind

Holacracy. In addition, studies that have been completed within the last decade will take

precedent.

Review of Methodological Literature Specific to Holacracy

Quantitative Research

There have been quantitative studies by Walumbwa, Peng, Lawler and Shi (2004)

and Felfe and Schyns (2004) on transformation leadership and organizational effectiveness

and by Webb (2007) on preferred leadership styles of 223 senior executives; along with

long term leadership research by Kouzes and Posner (2007) that involved a government

and business population of over 75,000 executives that spanned decades. International

research was undertaken in Norway (Hetland & Sandal, 2003) and Taiwan (Tsai, Chen &

Cheng, 2009) that investigated the impact leadership styles had on employee performance.

The absence of leadership or the laissez-faire approach has also had some recent attention

with Barbuto (2005) including 186 leaders and later nearly 800 managers across different

industries were included in a study (Hinkin & Schriesheim, 2008) to understand the

absence of leadership. Many used the Multifactor Leadership Questionnaire (MLQ) and

the multiple studies across many countries have confirmed similar outcomes.

Several dissertations from Capella University in the last twelve years have followed

the quantitative path to analyze the impact leadership styles had on organizational

outcomes. Wegner (2004) expanded on the previous studies (Atwater & Bass, 1994;

Mowday, Porter, & Steers, 1982; Pearce & Ravlin, 1987) by including the employee

perspective, and utilized the term “employee empowerment” (p. 3). Perceptions of the

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leader were captured, along with the perception of the subordinate. Three different

organizations were included and in excess of 280 individuals were asked to rate the three

different leadership styles; these being transactional, transformational and laissez-faire.

Based on the prior methodology by Bass and Avoilio (1994), Wegner’s (2004)

results added to the research by the inclusion of employee empowerment, which could be

considered the precursor to true or distributed or shared leadership. Many companies had

been engaged with shared leadership, W.L. Gore and MorningStar since the 1950’s, but

there had been no wide spread acceptance of that practice and still is only embraced by

progressive organizations. The comparison of the different age groups in the workforce

was the focus of Just’s (2011) research, with all four generations being included in another

MLQ survey to analyze leadership styles. Prior research (Landry, 2009; Licata, 2007;

Riescher, 2009; Walker, 2006) had examined leadership styles; however none had included

all four groups in the one study with the focus on the small business sector.

Gender was added to the prior research by Perkins (2014) in another MLQ study on

leadership and organizational performance. In addition to the MLQ that would reflect the

leadership qualities, gender and organizational performance indicators were collected.

Perkins (2014) examined 19 leaders and 35 subordinates in a global construction and

project management firm. Gender had been the subject of prior research (Reuvers, Van

Engen, Vinkenburg & Wilson-Evered, 2008) that looked at innovative behavior between

males and females. Earlier research (Alimo-Metcalfe & Alban-Metcalfe, 2003; Bass &

Avolio, 1995) had revealed the transformational appeal from women in contrast to the

more transactional appear from men. Expanding from strictly transformational leadership

Frooman, Mendelson and Murphy (2012) included the variable absenteeism in their

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research using a self-reporting questionnaire. It aimed to contrast transformational to

laissez-faire or passive avoidant leadership styles. Not surprising, the passive approach to

leadership had a negative effort.

Qualitative Research

Weibler and Rohn-Endres (2010) utilized a grounded theory approach to integrate

social networks into shared leadership theory and determined an essential element was the

learning between individuals. They also reflected on the network diagram to reflect the

new flatter structure that would replace the traditional hierarchical chart. Studies in Asia

were undertaken in 2011 and 2012 by Bildstein, Gueldenberg and Tjitra (2012) with senior

executives and direct reports with a focus on the follower’s point of view. Results found

that cultural perspectives are important factors to be included. An interesting qualitative

study was undertaken in 2012 and represented a single case study approach when the lead

guitarist of a rock band was selected to be the focus on hierarchy and shared leadership.

Multiple styles of leadership were observed as all playing a part in the potential for shared

leadership in a traditional organizational structure. The subject exhibited transformational,

servant and authentic leadership qualities and concurs with Pearce, Wasenaar and Manz

(2014) and their premise that all leadership is shared, it is simply on a continuum.

Slantcheva-Durst (2014) included the group-level concept of governance (Fletcher

& Käufer, 2003; Pearce & Sims, 2002) where the team is the one driving the sharing of

leadership. While this is fundamentally at the team level and not across teams, it does

represent the interest in the shared leadership concept and the impact to organizational

productivity. The outcome presented new models and reflected the move away from

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leadership being owned by the individual leader or even as the relationship between the

leader and his/her followers and rather than interaction between equals.

Mixed Research

The research undertaken by Hyldelund and Fogtmann (2011) in the pursuit of their

dissertation was one of the most recent that looked at new leadership genre and their

hypotheses were designed to answer the research question, “Are business managers in

Denmark today practicing leadership according to the theories of the new leadership genre

and how is this visible?” (p. 9). It was partly similar in methodology to that of this study as

it deemed the qualitative approach was better suited to the available sample size.

Antonakis & House (2002) had suggested the MLQ could be utilized to measure

transformational leadership in a reliable and valid manner, nonetheless the intangible

behavioral facets to leadership can be better explored and measured using qualitative

approaches.

Their approach was to interview 12 participants who were in leadership positions;

however the first difference was the focus in the approach to leadership in contrast to how

they experienced leadership, and the second was that no followers were included in the

sample. In addition, quantitative data from a doctoral dissertation from 100 top Canadian

companies was included which attempted to make the correlation between leadership style

and financial performance, along with Danish employee satisfaction surveys.

Distributed leadership (DL) as a concept was the subject of research in 2013 by a

collaboration between Indian and Danish scholars, Jain and Jeppe Jeppesen, respectively.

This research involved 180 participants from private and public companies and conducted

personal and group interviews along with a questionnaire to allow for a mixed approach.

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The results revealed the presence of different dimensions and the significance of DL and

further illustrated the role cultural context plays in relationship to successful DL.

Synthesis of the Research Findings

Kouzes and Posner (2007) concluded in a similar fashion to Spears and Lawrence

(2004) that leaders needed to reflect an authenticity and honesty worth following and in

doing so would attract the followership of energetic, ethical and inspired individuals. All

the quantitative studies from the Capella dissertations (Just, 2011; Perkins, 2014; Wegner,

2004) reviewed and the non-Capella research whether prior or subsequent to 2000,

reflected similar results with a positive relationship for transformational leaders impacting

organizational health. Wegner (2004) had an interesting finding as it related to leaders

actually being aware of their own style. As would be expected the laissez-faire or lack of

leadership resulted in the least positive outcome. The Danish study concluded that the

mindset of the employee had changed and an expanded view that looked past simply the

skill aspect to the employee had led to an acceptance of the new leadership style that

seemed to be prevalent in the companies included in the study.

Critique of the Previous Research

All the previous research and studies added to the knowledge pool and looked from

different perspectives to review and understand leadership and for that matter management,

and how it has changed over time due to economic and environmental causes. None really

stood out as being that radical in their results and all seem to agree that the laissez-faire or

absence of leadership has a negative impact on performance. Shared leadership as a model

or emerging variance to the existing transformational leadership style is lacking the

sophistication of a clear direction for implementation and management. While shared or

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distributed leadership has been championed in a few companies like, W.L. Gore and

MorningStar for over fifty years, there has not been sufficient adoption to establish

standards. Holacracy as a new variation on the shared leadership model has had little

quantitative or qualitative research, and the outcomes from this qualitative research will

provide an understanding into the experiences of individuals and provide possibilities and

directions for future research.

Summary

Research into the correlation between leadership styles and organizational

performance has been undertaken for decades with the Lieberson and O’Conner (1972)

study being cited frequently and the results indicating little attribution being given to

changes in leadership style impacting performance variances. More recent results revealed

employees are impacted by their direct supervisor and that satisfaction is influenced by the

style of the leader (Hogan & Kaiser, 2005; Ireland & Hitt, 2005). Einstien and Humphreys

(2001) argued that being transformational was not engaging in a different style of

leadership, it was simply demonstrating an evolution into a better version of leadership,

insofar as the leader is able to understand and adapt to the dynamics and complexities of

modern business.

Chapter 3 will introduce the methodology of the study including the design,

population, selection, questions, analysis, expected results and ethical considerations.

Chapter 4 provides the themes, along with the description of the sample and analysis details

and results. Chapter 5 will include the summary and discussion of the results and the

conclusions and future research opportunities.

77

CHAPTER 3. METHODOLOGY

Purpose of the Study

This study was aimed to provide CEO’s, senior management and organizational

development experts with knowledge regarding how dynamic governance may impact

selection, recruitment and retention of employees. Acquaah (2004) presented opinions

from studies (Organ, 1988; MacKenzie, Podsakoff & Fetter, 1991, 1993; Podsakoff,

Aherne & Mackenzie, 1997; Podsakoff & MacKenzie, 1994, 1997) that organizational

citizenship behavior (OCB) can “positively influence organizational performance or

success” (p. 126). OCB is the manner in which employees interact and is influenced by

organizational design. Ivanov (2011) described the lack of scientific principles applied to

the design of organizations; particularly those who are based on the knowledge worker, can

dramatically impact engagement and productivity as the employees can feel underutilized

when constrained by traditional hierarchical or closed system models. Organizations who

engage in a dynamic governance approach may need to modify their talent management

practices due to the behaviors necessary to fit with the new structure.

Case study methodology was selected over phenomenological as Creswell (2013)

outlined the differences between the two as phenomenology requires the participants to

have “shared the experience” and a case studies “an event, program, an activity, or more

than one individual” (p. 105). Baxter and Jack (2008) concurred with Stake’s collective

methodology for case study utilizing “categorical aggregation and direct interpretation”

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allowing the topic to be investigated and present greater “insight and understanding”

(p. 550) than an intrinsic case study. In Stake’s own words, he suggested “we want to

appreciate the uniqueness and complexity of [ϴ,] the case” (1995, p. 16), however

differentiated between intrinsic and instrumental as it relates to focus, with intrinsic having

at its focus the case; whereby instrumental is more directed by the issues. Parlett &

Hamilton (1972) extended Stake’s methodology insofar as using abductive reasoning

allows for themes to emerge throughout the data collection phase rather than collecting all

data prior to any coding taking place.

Research Design

Onwuegbuzie and Leech (2007) suggested qualitative research seeks to “extract

meaning from [their] data” (p. 106) as opposed to quantitative which seeks to generalize.

This formed the rationale of selecting a qualitative approach and extended to assessing

what sample size was appropriate when using qualitative approaches. According to

Creswell (2013) case studies need three to five cases to provide data saturation. Multiple

organizations were included and while saturation appeared evident at five, the remainder of

the sample was engaged to guarantee saturation requirements and maintain scientific

integrity. The experience of employees where holacracy had been introduced is the unit of

analysis.

Debate circulate between qualitative and quantitative and which is the superior

methodology and some even say qualitative is “messy” (Gummesson, 2005; Orton, 1997;

Parkhe, 1993) and Sinkovics & Alfoldi (2012) also acknowledged the nonlinearity of the

research process. The business community seemed to concur and has favored qualitative

research in recent years as a method to greater understand the individual phenomenon

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instead of sweeping generalizations offered by quantitative methods (Chenail, 2011; Wertz,

2011). Issues pertaining to linearity of deductive reasoning to present qualitative research

as “a predictable, orderly and entirely deliberate process, based on credibility,

dependability, transferability and confirmability” (Sinkovics & Alfoldi, 2012) can be offset

by using a progressive focusing approach (Parlett & Hamilton, 1972). The researcher was

somewhat committed to an existing notion on theory, nonetheless was open to discovery

and as such engaged in abductive reasoning rather than the generation of new

theory (Sinkovics & Alfoldi, 2012).

In light of the boundaries needed to limit data overload that is often present in case

study research, standardized semi-structured 60 to 90 minute conversational interviews

(Patton, 2002) were undertaken with a stratified purposeful sample of 12 participants from

a client list supplied by HolacracyOne, the organization that developed holacracy. One was

removed as holacracy was no longer being utilized at the organization. The remaining 11

participants were interviewed utilizing recorded Skype phone calls and no additional

interviews were needed for clarification. These participants represented different stages

within the process of holacracy being implemented and data can therefore be analyzed

within, between and across cases. Initial contact was made by HolacracyOne and followed

up by the researcher requesting consent from the participants to be included in the study.

Prior to interviews, a field test was undertaken, by a representative of HolacracyOne, a PhD

specialist in case study research and a licensee who implements holacracy, to hone and

narrow the questions.

Standardized, semi-structured questions were employed for this study, along with a

simple survey to collect demographic information. The standard questions led to additional

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questions and these were infused into future interviews. Direct participant observation

could have been useful, however it was not part of the study as the remote locations of

participants restricted face to face engagement, and nonetheless the non-face to face

presented a greater opportunity for candor.

Demographic data was collected to assist with any generalizations, however as most

participants fell into the same groups, this proved less valuable and supports a larger

sample population in future research. The original non demographic questions asked were:

Q. How would you describe the way you worked before holacracy? In terms of

hierarchy, titles, etc., politics, familial or not, relationships, “role-

ationships”.

Q. How does holacracy impact your day to day work?

Q. What were your perceptions of holacracy prior to it being introduced at the

company?

Q. How would you describe holacracy? To someone who had no experience or

exposure to it.

Q. What are your perceptions of holacracy now?

Q. What do you dislike most about holacracy?

Q. What do you like most about holacracy?

Q. What were the things you struggled with when holacracy was implemented

in your organization?

Q. How has your motivation/productivity changed since moving to holacracy?

Q. What are your thoughts on the lack of titles or hierarchy?

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Q. How does this affect your career progression and movement into a

management role?

Q. What is your overall experience of having holacracy introduced into your

working environment?

Additional questions asked were:

Q. Describe your level within the company prior to the introduction of

holacracy.

Q. How did the organizational structure change, did they replace the existing

hierarchical organizational chart, or did they simply place holacracy on top?

Q. What are your thoughts on moving to another company that works in a

holacratic model?

Q. What things could be handled differently, or make holacracy better?

Q. What are your thoughts on how bureaucracy has changed and affected the

decision making process?

Q. What are your thoughts on consensus in the holacratic model?

Q. What are your thoughts about the overall implementation versus the model

itself?

Q. What leadership changes took place as a result of the introduction of

holacracy?

NVivo was used to transcribe the interviews and perform an initial analysis

following the Stake coding approach (Stake, 1995, p. 209). Data was stored in multiple

places, including a thumb drive located at the researcher’s primary location along with

cloud based storage with password protection. The researcher scheduled a Skype interview

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and advised participants that it would be recorded. The standard questions were asked and

then the participants were offered an opportunity to add any information they deemed

relevant. This information formed the basis of additional questions being included in

subsequent interviews.

Prior to the call the participants received the request to participate from their

management or representative tasked with being the liaison for the project. This request

included an outline of the study and request for consent and the guarantee of participant

anonymity. An acknowledgement of the time required was given and the request made as

to the appropriateness of the time and should that time not be convenient, an alternate time

would be arranged. Once on the call the researcher spent several minutes building rapport

prior to beginning with the preliminary demographic questions which were multiple choice.

The semi-structured questions were started and based on the responses additional questions

were introduced that emerged from the answers given by participants. Some presented

additional demographic data, while most simply enriched the responses from the original

questions.

Target Population and Participant Selection

The number of participants was small as the study was not looking to generalize to

the larger population, rather to suggest causal speculation that might offer support for

future quantitative research which could offer that generalization. The object of the study

was to gain knowledge regarding dynamic governance using the holacratic structure within

organizations; nevertheless it was anticipated that multiple demographics would exist and

offer additional understandings. The larger population is several thousand individuals

currently working at organizations who have deployed the holacratic model over the last

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nine years. Direct clients of HolacracyOne were the source of participation and are a sub-

group of the total population due to the model being licensed to other organizations for

implementation. HolacracyOne committed to sharing the participation request for this

study with multiple client companies of which twelve to fifteen participants were randomly

selected for the study. The study ended up including eleven participants from multiple

companies across multiple geographic locations within the United States that had been

using holacracy for more than one year.

Procedures

The sampling method followed the outline of stratified purposeful sampling where

the participants were identified by the deployment of holacracy within the company, as

well as the length of time (at least 12 months) holacracy had been deployed within the

company, as the study would be limited unless participants had adequate time to experience

the phenomenon. Participants were contacted by HolacracyOne in the first instance and

presented with an overview of the study and the participation requirements. Included in

this was the knowledge that to increase the scientific merit of the study, participants were

randomly selected and so not all who responded were selected for participation. The

researcher has no affiliation with HolacracyOne or any of the participating companies.

Steps for Sampling

1. Researcher sent email to HolacracyOne outlining the criteria for client companies to

be considered for the study.

2. Researcher sent out participant email to HolacracyOne, who in turn made contact

with clients outlining the study with a clear message that HolacracyOne was neutral

about whether or not clients participated, will not know if clients chose to

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participate and is only sharing the recruitment materials. This communication

included Researcher contact information.

3. Interested volunteer companies completed an expression of interest email form to

be included in the study.

4. Volunteer companies recommended participation by their employees and

employees volunteered anonymously from the organization.

5. Researcher forwarded a web-based consent form for the participant to complete,

which was signed, scanned and returned via email.

6. Once the signed consent form was returned the researcher made contact to advise

each participant of the next steps.

7. A calendar appointment was scheduled based on the participant’s availability and

the interview took place.

Instrument

Standardized semi-structured questions formed the basis of the interview to be

conducted in this study. The rationale behind this approach is supported by Patton (2002)

where this approach offers the best opportunity for repeatability and therefore contributes

to reliability and transferability. The questionnaire is included in Appendix B.

The demographic questions related to sex and time in the workplace along with

experience within a holacratic environment and level within the organization prior to

holacracy being introduced. The size of the organization and the number of people within

the organization involved with holacracy was included, as some companies implementing

holacracy had chosen a phased in approach rather than engaging the entire organization at

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once. Another interesting question posed was whether the participant had any control or

input into the decision to implement holacracy.

The main interview questions pertained to the type of hierarchical structure the

participant had previously worked in and how holacracy impacted their day to day work.

Holacracy, being a relatively new word or concept for most people presented some novel

and interesting responses both positive and negative when asked the question, how would

the participant describe holacracy to someone new to it? In order not to lead the

participants into any particular direction, the questions were intentionally somewhat vague

and simply requested the participants to indicate firstly what they most disliked and then

what they most liked about holacracy. In this manner, the media bias that presented certain

limiting perceptions was mitigated as much as possible. In addition to the participant’s

perceptions prior to holacracy being introduced, the question of how they perceived it after

the introduction was included.

Implementation struggles and impacts on motivation and productivity were a source

of much conversation as were the participants’ thoughts on the lack of titles, which is one

of the key media biases. Lack of titles led to the question of career progression and

management roles in addition to whether a holacratic organization would be chosen if the

participant were to leave their current company. Finally, the overall experience of having

holacracy introduced was discussed with each participant and they were free to linger on

this point as long as they felt they needed.

Research Questions

Qualitative research aims to understand experiences; however it typically results in

uncovering more research opportunities, as the nature of qualitative inquiry is to explore a

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phenomenon not yet fully understood or researched via hard quantitative methodologies.

This study is no different, in that the research question explored the experiences of

employees moving from a hierarchical organizational structure to dynamic governance.

With qualitative as in quantitative, data is king and while quantitative results indicate a

positive or negative response to hypotheses, qualitative results merely present opportunities

for further and more in depth research.

Data Analysis

Sinkovics and Alfondi (2012) elaborated on the concept of progressive focusing

(Parlett & Hamilton, 1976) and extended the Stake model based on Iacobucci and Churchill

(2010) and Sinovics, Penz and Ghauri’s (2008) work for a qualitative research process to

include iterative abduction (p. 825). Figure 7 outlines the complete research process from

defining the topic and question to the final write up, and is included as with progressive

focusing, the topic and question are not always off limits as data will ultimately crystalize

the studied phenomenon.

The reason for the inclusion here is to emphasize the importance of being open to

the notion that during the data collection process the research question may in fact be

influenced. It is not suggested that research design, sampling and data collection phases

will change or indeed the manner in which data is analyzed, just the notion that due to the

nature of case study research, the perceived phenomenon may change. In the case of this

research, the research question itself did not change, however interview questions were

added during the iterative process.

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Figure 7. A Progressive Focusing Model of the Qualitative Research Process. Reprinted

from Progressive Focusing and Trustworthiness in Qualitative Research, p 825, by R.

Sinkovics & E. Alfoldi, 2012, Management International Review (MIR), 52(6), 817-845.

doi:10.1007/s11575-012-0140-5. Copyright 2012 by Management International Review.

NVivo from QSR was selected as the tool to use for the capturing and storing,

coding for the literature review and for the data as it presented the researcher with an all-

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encompassing platform with the added benefit of providing audit trail capabilities. The

iterative model may appear to suggest lack of rigor, but this is counter balanced or offset by

the inclusion of the audit trail feature of NVivo. Task 4 utilized NVivo to track the

recorded interview audio files as well as enabling the correct transcription of the

interviews.

Individual participant coding began after the first three interviews and served as a

base line for themes and negated any bias the researcher may have introduced as a result of

adapting future questions based on only one participant. The remaining interviews were

scheduled with sufficient time to transcribe and code the themes between participants in

adherence to the iterative model.

Data Collection and Preparation (Step 4)

All data collected was saved using a unique anonymous file name that included no

identifying participant information. A separate password protected file has the names of

the participants and the associated anonymous indicator for control purposes. This is

stored in a separate location to that of the data and on a separate flash drive to maintain as

much security as possible. All files have a prefix to indicate whether an audio,

transcription or note file for each participant.

The transcribed audio files of the participants were prepared as a group to determine

word frequency (feature of NVivo). This indicated across all files the most used words and

these were coded to create themes for analysis. Individual files were treated to the same

analysis to see if individual participants had strong themes across responses.

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Analysis (Step 5)

After the coding produced themes, be that single or multiple, the results were

compared to the research question to reflect whether the phenomenon being studied was

accurate. While the framework outlined by Sinkovics and Alfondi (2012) was utilized, this

only supplemented the principles of case study analysis outlined by Stake (1995), these

being “direct interpretation” and “categorical aggregation” (p. 74).

Individual and aggregated themes arising from the coding were aligned with the

preconceived theories; in addition as part of the process, additional theories presented

themselves as genuine alternatives to the original theories as often arise in case study

research. It was necessary to expand the questions for the remaining participants to support

additional theories. Bringer, Johnson and Brackenridge (2004) contributed by stating

“transparency is necessary for accountability” (p. 262) and this transparency was

obtainable to the researcher by way of the audit trail and memoing being so easily

accessible in NVivo. NVivo offers considerable analysis tools and while not at quantitative

sophistication, affords the researcher a greater command of investigation than would be

available utilizing non computerized software methods.

Ethical Considerations

Credibility, Dependability and Transferability

Creswell (2013) provided a “synthesis of validation perspectives” (p. 248) from

other researchers who contributed to the field. This synthesis contributed to the four

primary terms or concepts of credibility, authenticity, criticality and integrity.

Alternatively the terms proposed by Lincoln and Guba (1985) were credibility,

dependability, confirmability and transferability. The definition of each being; accuracy of

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interpretation of meaning, everyone’s opinion is included, critical analysis of research

facets along with critical self-assessment of researchers, respectfully. A key point

proposed by Creswell (2013) was the belief that any qualitative research study is by the

very nature of the approach viewed through the lens or filter of the researcher.

Johnson (1997) presented thirteen strategies for research validity. Of the 13 offered

by Johnson, several of them are not appropriate for the proposed case study, these being

“extended fieldwork, peer review, investigator triangulation, negative case sampling and

pattern matching” (p. 283). This is based on the fact that a single investigator was involved

and therefore investigator triangulation and interaction with other researchers was not

possible, pattern matching isn’t in line with an abductive approach and negative case

sampling isn’t deemed to offer additional insight.

In addition to his strategies as described above, Johnson (1997) offered further

definitions of validity critical to the qualitative approach. The validity aspects discussed

included descriptive, which refers to accuracy, and interpretive which refers to the correct

understanding of meaning and both are closely linked to credibility. Theoretical which

refers to the explanation of data, not specifically with the expectation of a theory emerging,

rather simply the correct description of the phenomenon and this relates back to criticality.

Internal and external validity are the well-known aspects for consideration and Johnson

(1997) suggested that qualitative research can to a certain degree offer elements of both.

Internal validity could be considered if the aspect of theoretical validity was also in place.

External validity is somewhat harder as the mere suggestion of generalizations of

qualitative results alarm quantitative researchers.

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Krefting (1991) offered some modifications of the term transferability and

suggested the term “applicability” instead; nonetheless it refers to the same concept of the

findings being relevant to “other contexts and settings or with other groups” (p. 216) and

also included the more quantitative term of generalization. Creswell (2013) also reflected

upon the natural generalizations available to case study methodology (p. 200). An

interesting viewpoint of Lincoln and Guba (1985) as offered by Krefting (1991) is one of

passing the responsibility of transferability to the “person wanting to transfer the findings”

rather than making it the responsibility of the “original researcher” (p. 216). This shift of

accountability or duty appears logical as it would be prohibitive for all possible contexts to

be foreseen by the original researcher; this shouldn’t nevertheless offer a ‘get out of jail

free card’. It appears counterintuitive for one researcher to be potentially designing

research with the next researcher in mind. The priority for any sound research is to respond

in the best manner appropriate to obtain data that will contribute to the knowledge base by

succinctly demonstrating answers to the research question.

Dependability in the final sense is the comparison from quantitative research’s

reliability construct. This is the underlying ability of the study to be reproduced and what

is interesting in this concept is that while the study could potential be replicated, the results

may or may not be replicated. This could be an issue with transferability and the natural

generalizations often presented by the case study approach; however the knowledge base

still has the opportunity to grow even if the results are not replicated precisely.

Houghton, Casey, Shaw and Murphy (2013) outlined strategies to determine rigor

in the four criteria set by Lincoln and Guba (1985). Several will be lacking in the study

due to the nature of methodology, these being; “prolonged engagement and persistent

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observation”, “triangulation”, “peer debriefing” and “member checking” (Houghton et al.,

2013, p. 13) that support credibility. Dependability and confirmability would be supported

by audit trails and reflexivity and these two criteria can be maintained through the use of

NVivo and the audit trail and memo features. Finally, transferability as mentioned earlier

is really out of the scope of the original researcher insofar as it is impossible to envisage all

potential scenarios; nonetheless it can be enriched by use of “thick descriptions” (Houghton

et al., 2013, p. 13). Credibility of the researcher is demonstrated by the experience

gathered by the business analyst role undertaken in previous years and the similarities of

collecting information from business subjects and developing them into themes and

priorities and the production of reports outlining these contributions by stakeholders within

the company.

Expected Findings

The researcher perceived the participants would be eager to have structure and that

the traditional hierarchical organizational design would be favored by the older more

experienced worker and that if anyone was to be happy about the lack of traditional

concentrated authority, it would be the younger worker. Additionally, there was the

perception that people who had authority and the title to go along with the management

role would be reluctant to relinquish that control. This perception proved for the most part

to be accurate, however not in all cases and it had much more to do with the

implementation of the model, rather than the model itself.

The overarching perception was the majority of participants were going to be

negative about the model and the change organizations were required to make to properly

entertain holacracy. An extension of this perception centered on whom would volunteer to

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participate and this will be discussed in the section on limitations, however with the small

sample size, it cannot be ruled out that individuals who were negative about holacracy were

reluctant to take part even with the promise of anonymity. In contrast to this, there were

several participants who were negative towards holacracy as it was implemented, but were

still favorable to a shared or distributed leadership model.

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CHAPTER 4. RESULTS

Introduction: The Study and the Researcher

The changing demographics in the workforce over the last two decades have given

rise to an increase in recent research into leadership rather than management practices

(Just, 2011; Landry, 2009; Licata, 2007; Perkins, 2014; Riescher, 2009; Walker, 2006).

The generational migration will continue as Baby Boomers exit the workforce in larger

quantities, and Gen Xers lose their short-lived position of being the largest population in

the workforce in favor of the Millennials (Gen Y); who took their place as the largest group

in the workforce in the first quarter of 2015, according to the U.S Census Bureau data

analyzed by Pew Research Center (Fry, 2015).

Figure 8. Changing Demographics in Workforce. Reprinted from Millennials Surpass Gen Xers as the Largest Generation in U.S. Labor Force, by R. Fry, 2015, Pew Research Center

tabulations of monthly 1995-2015 Current Population Surveys, Integrated Public Use

Microdata Series (IPUMS). Copyright 2015, Pew Research.

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One thing is constant however, each generation seems to need different things as we

have moved from the manufacturing / industrial era into the knowledge based workplace.

Baby Boomers had World Wars and lack of instant communication (Collins, 2104). Hamel

(2010) had similar views of Collins (2014) who suggested Gen Xers were somewhat caught

in the middle between being on the forefront of the new information age with the baby

boomer innovators, Steve Jobs and Bill Gates leading the way in the workforce. However

it was the Baby Boomers that held a large percentage of the teaching positions for Gen

Xers. Gen Xers came across the technology in the workplace, however the Millennials

came across it in school, paving the way for the ubiquitous communication era we are now

in and the adaption of leadership styles to support the modern workforce (Collins, 2014).

The results from this study illustrate the need for further quantitative and qualitative

research into the different types of leadership models making their mark on the new

demographics in the workforce. It is important to note as discussed earlier, there have been

companies participating in shared or distributed leadership models for over 50 years; it is

simply though they have been in the minority and the workforce mainly consisted of Baby

Boomers and Gen Xers, not Millennials. The data from the research provided common

themes and presented similarities and differences amongst the generational groups, and as

is the objective of utilizing a case study approach presented opportunities for future

research in this topic area.

A background in interacting with a broad range of workers over a decade, in a

direct human resource role combined with a significant number of years managing

departments in information technology, human resources and finance led this researcher to

question best practices in leadership. An understanding or the interest in understanding the

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human element of the workplace was driven by the introduction to Neuro-Linguistic

Programming (NLP) over fifteen years ago. An approach to communicate and establish

what works and what does not, seemed to be valuable in the workplace. With this human

element piece, this researcher was interested in how holacracy could work, as at face value,

it appeared less about the human element and more about the process as it was developed

from a systems approach based on programming methodologies.

Strict disciplined lines of authority were experienced while the researcher was in

the Australian Army and moving countries provided a cultural awareness that exists

between two western English speaking environments. The military and workplace

environments encouraged a preconceived notion that the results would present the need for

structured leadership. To limit any bias the researcher may have held, the exposure to the

holacratic model was limited to a half day workshop prior to starting the research. While

the book written by the author Brian Robertson (2015) was read along with online articles

and peer-reviewed journal articles on the topic for the literature review, the researcher did

not engage or work for any company using holacracy during the research.

Description of the Sample (Participants)

The sample contained existing clients of HolacracyOne, the company who created

the holacratic approach and who also provided facilitation and implementation of the

adoption of holacracy. Initially the clients were contacted by HolacracyOne and the

research study was introduced and discussed with them, prior to contact being made by the

researcher. Once confirmation of client involvement was secured, the researcher reached

out directly and obtained commitment from three companies. A fourth had been included,

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however it was deemed this company fell outside the scope of the criteria for inclusion and

resulted in the participant from this company being excluded.

Companies needed to have been using holacracy within the company and that

participants had been exposed to holacracy for at least twelve months for them to meet the

criteria for inclusion. In one company there was one participant who had only had

exposure for seven months; however the company had completed implementation by the

six month mark and was fully up and running on their own. This participant (P2) was an

outlier as P2 was in a single demographic group (only two to three years total in the

workforce) and due to this limited time in the workforce overall and limited exposure to

holacracy and other organizational structures was deemed not to be suitable for inclusion in

the analysis. P2’s viewpoint nonetheless was positive and may reflect the next generation

and certainly adds to the support for additional research into this demographic group.

The study aimed to include 12 participants from four companies, however in the

final tally; only three companies were involved with ten appropriate participants. Table 3

outlines the demographic makeup of the sample. The participants covered a range of

positions within the company, from rank and file to senior level executives, however due to

the small sample size specific titles are being withheld as these have the potential for

identifying participants. The size of the three companies ranged from under 15 to around

100 employees.

The mix of males to females was 60% to 40% in favor of males. The majority, 80%

of the participants had been in the workforce in excess of ten years. Whether someone had

been a manager or not prior to the introduction of holacracy was 60% in favor of not being

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a manager. This is relevant as one of the key attributes of holacracy is the removal of

managers in the traditional sense in order to allow self-management by the individual.

The results indicated a 50/50 split when asked the question of whether they were

involved in the decision to have holacracy introduced. Upon clarification, all participants

revealed that while they were introduced to the concept via a taster or other method of

understanding what holacracy was, the majority were not really the final decision-maker

and it was the CEO who had the ultimate power in the decision. The taster was a half day

interactive session facilitated by HolacracyOne that gave participants hands on experience

with the fundamentals of holacracy, these being the tactical and governance meetings.

Only one participant, P1 indicated that less than 100% of the employees were engaged in

holacracy and P1 suggested that it was 50-75% and that some still needed to take it on

board fully.

Table 3. Demographics of Sample

Participant

No Sex

Time in

Workforce

Involved in making

decision

Was a Manager Prior to

Holacracy

1 m >10 years no No

3 m >10 years no No

4 f 6 - 10 years yes No

5 f >10 years no No

6 m 3 to 5 years yes No

7 f >10 years no Yes

8 f >10 years yes No

9 m >10 years no Yes

10 m >10 years yes Yes

11 m >10 years yes Yes

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Research Methodology Applied to the Data Analysis

Sinkovics and Alfondi’s (2012) model on progressive focusing discussed in detail

in Chapter 3, and outlined in Figure 7 was used throughout the interviewing process and

the first three interviews highlighted additional points of questioning that might occur in

future interviews. The researcher did not lead future participants down this line of thought,

rather allowed for that line to develop on its own in the first instance, however after all the

initial questions were asked, the additional points were raised if not already mentioned by

the participant.

All interviews were conducted using Skype and recorded with the consent of the

participant. These audio files were saved with the date and duration of the call. Once

loaded into NVivo, the addition of which participant the file belonged to was added. An

excel spreadsheet was utilized in order to transcribe the interviews so to match the answers

from each participant and include any additional comments. The participant’s responses

were collected in a separate column for each question so that a visual comparison between

each participant was available. The individual responses were then taken separately into

NVivo along with the complete responses for individual and within group analysis. The

interviews ranged in time from P1 that lasted only 34 minutes and 42 seconds to P11 that

lasted 2 hours, 27 minutes and 28 seconds.

Presentation of the Data and Results of the Analysis

The study aimed at understanding the experiences of employees in a holacratic

organization and whether it could be the leadership model for the modern workforce. The

term modern workforce in this context is speaking less about the demographics in the

workplace and more about the next generation of leadership. The overall feedback from

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participants indicated there was more of an interest in shared or distributed leadership than

holacracy itself. The data illustrates the positives and negatives to holacracy and

participants were also asked if they could make suggestions to improve holacracy.

Direct Interpretation

Individual participants were asked a series of demographic questions first and

responses are included in Table 3. The questions included in Chapter 3 and Appendix B

were tailored to focus on an area of holacracy while not leading the participant to any

preconceived theories of the researcher. Many questions led the researcher to skip specific

questions as they had been incorporated into the free flow format of previous questions.

The discussion below illustrates the most common themes arising from the interviews.

Q. How would you describe the way you worked before holacracy?

Guiding Question: In terms of hierarchy, titles, etc., politics, familial or not,

relationships, “role-ationships”.

The first question attempted to ascertain the prior structure participants were used to

working in. This was standard across the sample group with all having experienced a

traditional hierarchy to some degree or another.

P1 stated:

Prior to now, all structures you can think of, I have been in the workforce for a long

time, including the military strict hierarchical structure. I have also worked in a

straight union management shop where there a lot more formal contractual rules, I

have also worked in open shop where they are more based on familiarity with the

individuals who you knew who could do what job and there was a lot more personal

task orientated work groups than any type of a role based task, prior to this it was

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more of a management type structure that had multiple layers and you weren’t not

necessarily receiving information second or even third hand, it might have been

filtered through a number of individuals.

P3 shared:

I think it was pretty standard hierarchy, you know there was the owner and

underneath him there are executives and underneath them there were managers and

then managers under them sometimes, so I was about 4 steps away from the owner,

several layers. Our group, every group is kind of different we did have a good bit of

autonomy in the manager but she was pretty good at being hands off.

P9 revealed:

I had a positive work environment, had good working relationship with manager,

traditional hierarchy structure, my manager had a manager who had an executive

who reported directed to owner.

Q. How does holacracy impact your day to day work?

The impact holacracy had on the day to day work was the second question posed to

the sample with the responses being mixed from not at all really to simplifying things to

meetings were now a major component.

P1 concluded:

I think it simplifies my day to day work in that I know what my roles are clearly

and what I am expected to perform even on a daily basis.

P3 suggested:

One way is the meetings. That was probably the biggest change that affected me

was that it brought structure to these meetings. I'm sure there are a lot of different

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ways you could structure meetings that aren’t holacracy but there were all these

kind of rules you had to follow in our meetings and one of the problems at our

company before was that meetings could be just very unorganized. Like a half hour

could be wasted on that long chit chatting or dancing around something that wasn’t

going to get through anyway.

P6 succinctly added:

it helps me make decisions more . . . prior I would just try and do things and now

there is a place for it, and we put it somewhere, there is a reluctance to do

something now that it belongs to someone else, I would bypass helping someone

because the appropriate role does it, changes the way I think.

Q. What were your perceptions of holacracy prior to it being introduced at the

company?

Most participants had very little if any prior involvement with holacracy until they

were exposed to the introduction to it at their company. One participant, who will remain

unidentified for confidentiality reasons, was the CEO of one of the companies and the

decision maker and so was extremely conversant with holacracy. Others had the preview

on a taster day facilitated by HolacracyOne.

P1 mentioned:

Wow, yeah I thought it was a wacky idea really, I was always used to someone

being in charge whether it be in a management type or at leader type and telling me

what to do, I didn’t understand that it would be as self-directed as it is and I think

that is one of the points that I like about it.

P4 had some concept or perception:

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My perception it was more of a flat organization where it distributed authority and

that office politics would no longer get in the way of the work.

P5 highlighted:

I didn’t know anything about it. The only company that was mentioned was

Zappos, no perceptions at all.

P6 had some interesting thoughts:

I didn’t know anything about it, wasn’t exposed to it, until the tastier, was only

exposed to the meeting structure and I thought it was unnecessary and awkward,

then you could get excited, how hard could this be. The idea that there wouldn’t be

a manager - that was unbelievable, let’s do this so I can go back to work - didn’t

think it would be such a big thing.

P7 was intrigued:

I was really intrigued and interested by what was presented to us and what the

intended hopes would be, I went into it with being excited and interested.

P8 commented:

I had only briefly heard about it - I came in unbiased.

Q. How would you describe holacracy?

Guiding Question: To someone who had no experience or exposure to it.

When asked to describe holacracy to someone who had not had any exposure, most

had a good grasp, but most were also not extremely succinct with their explanation with the

exception of P1.

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P1 explained it clearly:

I would describe it as basically you are self-managed with goals or roles that you

are expected to fill and you do them the way you see fit.

P3 went into the finer points and terminology:

That’s tough. It's a kind of starts with you identifying the role that you do. And

then you have the power to do whatever you need to complete those things. So you

have that role but you also have accountability. You're open to do whatever you

need to do unless you violate someone’s domain. And that domain is based on the

circle structure, where if someone is in the same circle as you and they have this

domain, you can’t violate that but if they are in a circle and it's like not actually

connected to yours, you can do whatever you need to get done.

P6 revealed:

It is distributed based on work, we don’t have to report to anyone, we don’t have

managers, and everything is run by the work. We have structured meetings and we

don’t allow people to go outside the structure, the idea that there are no managers

hasn’t changed but the meetings have changed, the work driven organization is very

different.

P7 elaborated:

I talk about it in terms in taking an organization to be self-directed to be self-

managing to be organizationally flat, open up the possibility for cross organization

collaboration in new ways that aren’t tied as tightly to department and old ways of

defining the work and news ways of people collaborating.

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P9 discussed the power dynamic:

It gives it pushes down the power of decision making, once you have your domain

or your area you work on different roles and responsibilities you make decisions on

it and you don’t ask you don’t have to ask for permission.

P11 described it the best:

I use the analogy - an ant colony or bee hives. There are a lot of roles in this natural

environment, they have very specific jobs to do and they don’t ask the queen for

permission to do it, they just do it. It is just built into the rules and everybody does

their job and the intelligence of the system is in the structure and that people are

able to use their creativity and best judgement in any roles and accountabilities they

have and there is a certain amount of autonomy but a certain set of tight rules that

keep it contained and meeting its purpose.

Q. What are your perceptions of holacracy now?

In contrast to the prior perceptions, participants were asked their perceptions of

holacracy after experiencing it for a year. Responses ranged from liberating on a personal

level to stifling communication on a group level. The flatness of the structure was also

questioned as the prior perception was that holacracy was going to be flat, however the

reality in most companies was the traditional top down hierarchy was merely moved to a

series of circles within circles and potentially within more circles, thereby simply

duplicating the traditional structure. The main significant post implementation

acknowledgement was that the structure had remained somewhat similar with previous

managers taking on the lead link role and by proxy having the same perceived authority in

some cases as they did before.

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While P6 had a negative reaction to communication as it related to communicating

outside meetings, there was also a positive in that there was now a perception that there

was a place for everything.

P6 had the revelation:

It has been helpful to me that everything has a home, it is not best for me just to do

everything or make the company better - you get detached from things and I was

probably wasting a lot of time doing things that I shouldn’t have.

P7 had positive feedback:

I think that as an operating system for the company it offers a lot of benefits, it has

reenergized me it has given me a new starting point to move forward with company

it is more freeing it is there are nuances and layers of where it works and there are

stumbling, it is very positive picture.

Q. What do you dislike most about holacracy?

The semi-structured question about what participants most disliked about holacracy

presented interesting results. These results may have some basis or bias in the

demographic age group contained in the sample and would require a greater population to

determine this, however this in itself strongly supports the need for additional research into

holacracy and other distributed leadership models. P1 felt the direction of the company

was now handled by committee and was much happier when there were strong leadership

skills being channeled through one senior individual. In opposition to P1’s own statement,

P1then noted:

Right or wrong, as long as we are moving forward and it doesn’t do the

organization harm, just do it, and that is kind of a personal preference on my part.

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P3 felt:

I don't really dislike like anything about it, like I’m fine with it I guess, the only

negative I would have is that I haven't really seen any big improvement.

P5 suggested:

it is just another way of doing business, its ok, take care of your people first , not a

real fan of this … there is not a set structure and that really opens you up to things,

your company is going to have a problem. We all need to be in the same ship, we

don’t need to be in separate dinghies - less clarity, less direction . . . I don’t know

that this is working, we are not all rowing the same direction.

This lack of improvement may be due to a number of reasons inside and outside of

holacracy and whether there was a strong methodology for measuring success and whether

this measure of success had been modified since the introduction of holacracy. P6 had

strong feelings about the communication in and out of the meetings.

P6 concluded:

Communication has changed, certain people don’t operate well in the meetings, and

they don’t know how to speak out or adjust to structure so we are losing their

opinion or voice. People are unable or overwhelmed in the meeting format. Some

people prefer to just go through the motions . . . people are intimated by the rules.

P7 contributed:

Challenges are human challenges, challenges which are really all about people and

the individual drivers and the motivations of people, that basic human challenges

show different ways based on the organization. In holacracy the people who have

needs that are around ego, they are having huge challenges to adapting to holacracy.

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In a few cases, there was a certain feeling of holacracy not providing everything

that might be needed. To illustrate, P9 described the implementation as:

they throw all the parts of holacracy and then you are thrown off the cliff and

expected to build an airplane but you are not told how to do it, there are key

features that companies need to functions but you aren’t given the how to do it.

While P10 was the most vocally negative, the participants for the most part even

though the question focused on the dislikes of holacracy also mentioned what they liked

about holacracy in the same breath and so were able to see both good and bad. In most

cases when asked to separate the implementation from the model, participants saw value in

the distributed leadership model, if not holacracy itself.

Q. What do you like most about holacracy?

From dislikes to likes, participants were asked to focus on what they liked about

holacracy.

P1 responded briefly:

I kind of like it that it makes us responsible for our own actions.

P3 noted:

It has organized our meetings a little better I like that. I do feel a little bit more

empowered when I like that it.

P4 felt:

I like that everyone has their own space before the meetings were monopolized and

now it is freeing to see people come out of their shell.

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P6 concurred with P4:

I love meetings because they are quick. I am very comfortable. I have meetings

and I know what to expect . . . I appreciate taking ownership of things. I am in role

that has nothing to do with my background and I can have ownership of new things.

P7 expressed:

There is a clearly articulated process for supporting individual’s autonomy and

desire to embrace the work and if there is a decision to be made about the work, the

individual in their role needs to reach out or clarify or raise a tension. There is a

clearly defined process for a level playing field - power is invested in the individual

and it is not an arbitrary management structure.

P11 reflected:

I like the elegance of it in terms of a natural system - it has an evolutionary

component to it. I have seen people in the organization that would have never had

opportunities to shine to do things to step forward and do things if they were in a

meeting in the past.

Q. What were the things you struggled with when holacracy was implemented

in your organization?

In any change management scenario there are struggles organizations are faced

with. HolacracyOne provided the framework and the facilitation to assist with

implementation, however when asked about the struggles, participants were mixed.

P3 revealed:

Obviously all these rules and stuff were kind of weird, but everyone struggled with

them. We went through a lot of practice and things and it all sort of made sense – it

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seemed like an overly complex board game - so there was a system there - so it kind

of made sense to me. The thing I struggled with and the thing I still struggle with is

how we change the circle structure.

P4 concluded:

Sitting down with managers to defined roles and we found their former managers

didn’t know what they actually did.

P6 added:

Definitely the communication - we had people who didn’t like meetings, didn’t like

the structure, they would shut down and just go through the motions. We have

people not communicating - well that took a while to get back to, and using

common sense.

P7’s focus was the human element:

We continue to struggle with the human piece of this. For people who are looking

to get those egos met, one way to get this in holacracy is to use land grab around

roles and domains, despite the process for governance “safe enough to try” is very

low, and there is always the course to undo. There are land grabs that roles that get

bigger and step on other roles, and take over, in ways that or not comfortable it is

hard to reverse it, even though holacracy has a way to reverse it, what to do with

someone who isn’t performing some of the checks and balances on people are not

as available as they should be in theory as they should be.

P9 had struggles around meetings

There was a struggle understanding who does what. We were still able to go back

to the old job roles and it wasn’t clear who had domain over what. The increase in

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meetings was definitely something to get used to - 1.5 to 2 hours a week, it does

feel like there are more meetings.

Q. How has your motivation/productivity changed since moving to Holacracy?

Motivation and / or productivity were discussed with the follow up question to the

struggles during implementation as motivation during change management can drastically

impact the success of change.

P1 commented:

Personally I think it is improved, I find myself to be more focused. I find that there

were other many tasks that my plate. There are tasks which are a higher priority -

which I deem as a higher priority.

P3 was initially motivated:

When it started I was way in to holacracy and I was kind of disappointed when I

had to do real work. I was sort of into all the meetings and stuff, but now is it sort

of this thing in the background. It is probably how it should be - yeah definitely not

as excited about it as I was.

P4 added:

It hasn’t yet and I don’t think it will. Motivation is kind of the same for about 90%

and 5% are now empowered. Some are less motivated as they don’t understand

how to get things done. We had people who were super motivated before. If

anything it has slowed us down.

P5 concluded:

Mine hasn’t changed, my motivation to do things hasn’t changed - that’s how I am

as a person.

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Q. What are your thoughts on the lack of titles or hierarchy?

One of the major differences between traditional hierarchy and holacracy is the lack

of formal manager titles and the flatness this presents. This lack of titles and the impact it

would have on progression within their current company or transition to another company

elicited similar comments. While titles were not considered important within the current

company, the majority of participants concluded that there was still a need for an external

title when engaging without outside people. Additionally, it was also noted by the majority

that most lead link roles were indeed being filled by prior managers and so regardless of

titles being changed, there was still a perception of hierarchy in the organization. The mere

view of circles within circles (sub-circles) gave way to the notion of hierarchy and the

perception that the General Company Circle (GCC) was higher than all other circles, as this

was where most of the strategy was performed.

Progressive focusing (Sinkovics & Alfondi, 2012) added to the richness of the data

by the inclusion of participant’s thoughts on decision making and consensus. These two

components are often discussed by Feloni (2015) as representing those who oppose

holacracy. There were in fact more positive comments about decision making than

negative, and the overall impression of holacracy had an impact on this positive or negative

reaction.

Q. What are your thoughts on moving to another company that works in a

holacratic model?

When asked whether they would go to another company managed under holacracy,

the percentage was 80% and this was predicated by the stage the participant was at in their

career. Notwithstanding any negativity about holacracy, all participants saw tremendous

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value in shared or distributed leadership and saw this as the way leadership would be

heading. With regards to implementation and ideas about how to make things better, the

comments were all around the people side of the model and not so much around holacracy

itself.

P11 put it succinctly:

It is a little social petri dish and you can see how people evolve.

NVivo allowed for data analysis and contributed to coding of major themes. Each

transcript was coded separately and then recoded based on additional themes emerging

from subsequent interviews. Initially the terms hierarchy and structure were coded as

individual items as were consensus and decision making, however once all coding was

processed, these themes were joined, respectively. Initial coding included terms that were

recoded to match one of the final 14, some of these terms were: manager, leader,

distributed authority, shared leadership, bureaucracy and circles. Other terms were

originally coded as potentials, however based on later interviews, were considered not as

relevant for analysis. The final codes were; Structure or Hierarchy, Meetings, Decision

Making, Leadership, Self- Management, Productivity /Motivation, Accountability,

Transparency, Emotional Intelligence, Communication, Culture, Collaboration, Rules and

Clarity.

Categorical Aggregation

There was only one theme that was included by all ten participants, this being

structure or hierarchy, eight commented on meetings and decision making and finally seven

had leadership and self-management as themes. Interesting to note is that while more

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participants included structure and hierarchy, the quantity of references highlighted a

greater relevance for meetings and decision making.

Table 4. Themes Ranked by Participants

Theme No of Participants Relevance

Structure or Hierarchy 10 25

Meetings 8 29

Decision Making 8 27

Leadership 7 18

Self- Management 7 12

Productivity /Motivation 5 16

Accountability 5 13

Transparency 5 9

Emotional Intelligence 4 14

Communication 4 11

Culture 4 7

Collaboration 4 6

Rules 4 5

Clarity 3 5

Table 5. Themes Ranked by Relevance

Theme No of Participants Relevance

Meetings 8 29

Decision Making 8 27

Structure or Hierarchy 10 25

Leadership 7 18

Productivity / Motivation 5 16

Emotional Intelligence 4 14

Accountability 5 13

Self- Management 7 12

Communication 4 11

Transparency 5 9

Culture 4 7

Collaboration 4 6

Rules 4 5

Clarity 3 5

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Table 4 illustrates the ranking based on number of participants, while Table 5

illustrates the ranking based on relevance.

Within Case Analysis

It was a reasonable assumption to consider meetings, decision making and

hierarchical structure as being the top three themes to emerge with leadership and

productivity / motivation rounding out the top five. These themes will be discussed in

detail, while the other notable inclusions being culture and emotional intelligence (EI) will

be discussed as they intertwine and impact the top five.

Meetings. Meeting formats are a fundamental shift from the traditional hierarchical

structure to that of holacracy with the introduction of both governance and tactical

meetings. The governance meeting could be described as the strategy or the working on

the business type meeting, while the tactical meetings focus on operational aspects. It did

seem to vary depending upon the level of employee and overall response to holacracy, be

that positive or negative.

P3 had a lot to say about meetings with several comments cementing the perceived

difference between traditional meetings and those within holacracy:

I like all the rules and stuff like I said it reminds me of a game and it has organized

our meetings a little better I like that.

P3 continued:

That was probably the biggest change that affected me as that it brought a structure

to these meetings - that are much more structured and I'm sure there are a lot of

different ways you could structure meetings that aren’t holacracy. There were all

these kinds of rules you had to follow in our meetings and I think a problem at our

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company before was that meetings could be just very unorganized. A lot of people

had problems with the meeting structure you know - you are not allowed to talk at

certain times and everything, I really liked it because it seemed like more of a game

and I enjoyed that part of it, interestingly we had more governance meetings in the

beginning. We still have them now but not as often and it was the governance that

had the real structured thing – and tactical are much looser and people were

struggling with the governance meetings - when they couldn’t talk at a particular

time and everything.

P4 stated:

I like that everyone has their own space before the meetings were monopolized and

now it is freeing to see people come out of their shell.

P6 commented about the change, however was quick to suggest that holacracy may

not be at fault, but also does recognize that:

It has hindered our ability to communicate outside of meetings, we used meetings to

bring tensions and we forgot or were persuaded not to just walk across and discuss

this. I don’t think holacracy has promoted this but we will wait to bring things up

in a meeting.

And,

Some people prefer to just go through the motions, we are way better now . . . it

has held us back; people are intimated by the rules.

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Along with,

We never would have objected to the president before . . . now everyone feels like

it is a requirement to give opinions and sometimes too much, when we aren’t even

in the role to say it - we have given ourselves the space to own the work.

In summary P6 mentioned:

I love meetings because they are quick. I am very comfortable. I have meetings

and I know what to expect.

P9, while not commenting on the structure of the meeting as much as the time

commitment needed:

The increase in meeting was definitely something to get used to, one and a half to

two hours a week; it does feel like there are more meetings.

Decision-Making. Considered to be slowed down by implementing holacracy and

outsiders quick to include this as a limiting factor of holacracy (Feloni, 2015), this theme

might be the most interesting outcome. It was with purpose not included as a separate

question and was left to percolate if participants felt it was something that caused concern

or was limiting. The initial three participants had no negative direct reaction to decision

making, on the contrary it was more positive than negative, with the exception of P10 who

for the most part had an overarching negative response to holacracy in general. The

positive feedback reflected a faster decision making process in most cases, although there

was some confusion as illustrated by P1 who commented:

Part of the structure of holacracy is to basically debate that until you reach a

consensus, not unlike contract negotiation. I find it very similar, it’s kind of getting

to yes. So if both sides agree they've got something. And that's kind of the feeling

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that I have with the holacracy. The premise of holacracy is that it is not decision by

consensus, rather the person with the authority given to them by the role they own

is free to make decisions as long as they don’t impact someone else’s domain.

P3 diametrically contradicted P1 and argued against consensus:

I like that idea not decision by committee as that is a trap our company fell into a lot

everyone trying to make everyone agree. I do see some people wanting to buy in -

so I just say hey were not looking for consensus.

P4 reflected the true essence of decision making in holacracy:

Decisions are coming from the bottom up rather than the top down . . . there has

been change, some things are moving slower and some things are moving faster

because they are clearer, but most are being run through the lead link.

P6 was confident:

It has helped my decision-making a ton; it has allowed me to stop doing things that

would be handled by someone else.

P7 felt:

If there are decisions to be made about the work the individual in their role needs to

reach out or clarify or raise a tension. There is a clearly defined process for a level

playing field for that. The power is invested in the individual and not in an arbitrary

management structure.

P8 concurred with the other positive responses:

As a group we are making decisions quicker than we did before, because of the

process.

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As did P9:

It pushes down the power of decision-making. You work on different roles and

responsibilities and you make decisions on it and you don’t ask you don’t have to

ask for permission. I think decisions are made a little bit faster if people are

comfortable. I can make a decision if no one else has domain do not have to wait

for a meeting.

Structure or Hierarchy. The structural change was always going to elicit strong

reactions and the researcher felt individuals would prefer structure over lack of direction or

a single point of vision. This seemed to be truer in the more experienced individual and

certainly was not the norm or consensus of the group.

P1 was the only participant who had strong feelings about the visionary leader prior

to experiencing holacracy, where the feelings changed and P1 was extremely vocal:

I thought it was a wacky idea really. I was always used to someone being in charge

whether it is in a management type or at leader type and telling me what to do. I

didn’t understand that it would be as self-directed as it is and I think that is one of

the points that I like about it. I find it very liberating, it is not as structured - I am

freer to say no to individuals than I previously were. The same managerial types,

who had offices before, still have offices. I don’t think anyone should have an

office, except maybe the owner of the company. That doesn't mean offices

shouldn’t be made available for private conferences or little get togethers or talks

but, I don't think people should have offices, I think it should be an open area where

you can go and sit and do whatever you want. I think the old hierarchy needs to let

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go. I think they need to put their egos aside and realize they have a role and a

function.

P3 reflected on limited change in the structure:

We're still one in a circle which is pretty much mimics our old department. We have

a lead link there was their old manager. I would say it's really kind of the same

kind of hierarchy.

P4 concurred:

We haven’t moved out of the department structure.

While P5 suggested:

It is a different structure, it is kind of freeing.

P6 had conflicting thoughts:

I thought it was unnecessary and awkward, then you could get excited - how hard

could this be? The idea that there wouldn’t be manager that was unbelievable.

Let’s do this so I can go back to work.

P8 provided an interesting analogy:

It’s like peddling backwards on your bike; you know how to go forward - it’s going

to take time to learn to go backwards.

P9 appreciated both perspectives:

I have seen the people who have embraced holacracy - they have been able to free

themselves from the structure. People who are not embracing it – cant.

P11 provided a succinct analogy of how the structure should work, however also

reflected that the organization is not there yet.

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P11’s analogy:

An ant colony or bee hive and there are a lot of roles in this natural environment,

they have very specific jobs to do and they don’t ask the queen for permission to do

it, they just do it. It is just built into the rules and everybody does their job and the

intelligence of the system is in the structure and that people are able to use their

creativity and best judgement in any roles and accountabilities they have and there

is a certain amount of autonomy but a certain set of tight rules that keep it contained

and meeting its purpose.

Leadership. The role leadership played in the discussions was interesting as most

conversations lingered on the issues prior managers were having adapting to no longer

having subordinate’s. Along with leadership, the concept of transparency came into play;

with people reflecting on the organization as somewhat of a family structure in the past

with the father and mother shielding the children from the problems of the household.

With the move to holacracy, the children now get to see the parents fighting openly and the

reaction by most was they would prefer not to see that.

P4 stated:

The dysfunction in the executive team is really transparent now - there isn’t

anywhere to hide and the transition for executives is hard.

P9 had some insights:

A good leader will be able to adapt to this and still be a good lead, someone who is

a bad manager will gain benefit from this. We are doing something that is not

normal yet and might not ever be normal and we are doing it because the owner on

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some level believes that it will move us forward and he is putting more people on

an even level, I like that - I appreciate that.

Productivity / Motivation. The thoughts around productivity and /or motivation

were solicited for two reasons. Firstly to define what if any measures had been put in place

to gauge success and secondly to determine how the change had affected motivation and to

some extent the organizational culture. Culture was coded separately from productivity in

order not to skew the results as the terms were used in different contexts, nonetheless there

are some similarities.

P3 concluded:

I haven't really seen any big improvement.

P4 reflected:

I knew how to do things in a traditional hierarchy but now I have to work out how

to do it. Things aren’t as clear now, but they feel more compelled to make them

clear. Things are not as clear now as they were before.

P4 furthered on the topic of motivation specifically:

Motivation is kind of the same for about 90% and 5% are now empowered Some

are less motivated as they don’t understand how to get things done. We had people

who were super motivated before. If anything it has slowed us down.

P7 also presented a positive response:

It has reenergized me. It has given me a new starting point to move forward with

the company - it is more freeing . . . there are nuances and layers of where it works

and there are stumbling - it is very positive picture.

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P11’s response was also positive:

I mean it is energizing, it’s exciting.

Culture. Culture was not addressed as a separate question as was the case with

productivity, needless to say was included by a number of participants and some felt the

culture had indeed changed which is not too surprising as P4 commented, “culture has

changed but people are not happy with change” and P5 concurred by stating, “our culture

within our group is still there, but there is a spark that is kind of missing, things used to

happen without thinking about it - it is not as happy as it used to be”. P9 had an interesting

perspective and mentioned, “I find myself talking with pride about it, pride in the company

for thinking outside the box”, however did concede that “a lot of the world isn’t built for

holacracy”.

Emotional Intelligence (EI). It was only mentioned by a few participants using

the exact terminology; however it was clear from conversations, many participants had

reflected on the lack of ability in individuals to have the skill set to handle their new

environment. P4 was very clear and stated “holacracy needs emotional stable people” and

“they are not taking things as business, they are taking it personal, we don’t have the

emotional intelligence to handle”. P7 added “there are land grabs. Roles that get bigger

and step on other roles, and take over, in ways that or not comfortable it is hard to reverse

it”. P7 furthered “it is about emotional intelligence, there is a huge assumption of

emotional intelligence and a bias towards smaller companies that can rally behind a

vision”. In conclusion, P7 suggested “if you have experienced emotional intelligence, that

they will have an easier time”.

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Thematic Synthesis

P2 had already been excluded due to not meeting the inclusion criteria and being

considered an outlier. P10 was also excluded as being an outlier, as this participant was

extremely negative towards holacracy as a model and had an obvious bias.

Themes common across remaining participants included meetings, where 89%

responded and while some had struggled with the structure, there were no extremely

negative responses to the new meeting structure. Decision-making saw 89% of participants

engage in this conversation, while not specifically in the initial interview questions. The

overall viewpoint on decision-making was that it was faster in most cases as it was pushed

down and made by the person assigned to that role. Structure or hierarchy was included

with the highest percentage of participants at 100% concurring that a shared leadership

model was one they would all prefer. The majority also concurred that at the present time,

the holacratic model of circles was for the most part placed on top of their traditional

hierarchical structure with most prior managers taking on the pseudo or perceived

supervisor role of lead link.

Leadership was discussed by 78% of participants and not in the sense that would

have first been expected. Typically when leadership is discussed, the concepts of

visionary, autocratic and perhaps servant- leadership are mentioned. Most participants,

focused on the inability of prior managers to adapt rather than their leadership style.

Self-Management, the reciprocal of hierarchical leadership presented with the same

number of participants as leadership with 78% including this theme. Leadership being

focused on others, self-management reflected on the participant directly, nonetheless many

participants also reflected on the self-management abilities of their colleagues. An element

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to this was the theme around emotional intelligence (EI); however by excluding P10 as an

outlier, this reduced the percentage of participants concerned with EI to 44%, nonetheless

still nearly half of participants reflected on the emotional intelligence element. An increase

in the sample would be required to ascertain any demographic predisposition to this. Due

to the sample size any expansion on demographic data could negatively impact the

confidentiality of the participants.

Secondary themes intermingled with primary themes as collaboration was reflected

positively by P4, P7 and P8. Inferred positive reactions towards transparency from P6, P7

and P8 imitated their positive reaction to meetings in addition to the positive reaction of

participants P1 and P5. When looking at transparency however, P5 did comment “it is like

a family, it is all rosy and then they see the parents are not happy the children are not

happy”.

Naturalistic Generalizations

In contrast to expected findings of individuals preferring structure and strong

leadership from a single visionary, it was evident from interviews that the majority of

participants were happy with and would seek out a holacratic work environment if they had

the choice. In addition, the shared or distributed leadership model is the preferred

leadership style. The number of participants with an overall negative response was 20%,

nonetheless 80% would be happy in a holacratic environment and 100% would favor the

shared or distributed leadership model.

Summary

This research aimed to gather the experiences of individuals functioning in a

holacratic environment to better understand if this dynamic organizational structure could

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be the structure for the modern workforce. Modern workforce in this context does not

reflect the changing demographic of the workplace and the overshadowing of Gen Xers by

Millennials; rather it is focused on the leadership style for the modern workforce. The data

revealed three major themes of meetings, decision-making and structure or hierarchy along

with minor themes of leadership and productivity. Other themes intertwined included

culture and emotional intelligence. Chapter 5 will discuss and interpret these results and

reflect on the literature on the topic. In addition, recommendations for future research will

be garnered from the larger meaning of the results discussed in Chapter 5.

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CHAPTER 5. DISCUSSION, IMPLICATIONS, RECOMMENDATIONS

Introduction

A major shift from management to leadership evolved from Taylorism and the

factory worker to the information age and the knowledge worker. With management being

the driver of process improvement and top down approaches of discipline to leadership

being the self-empowerment of the worker and self-distributed authority. The evolution of

management and leadership theories discussed in the literature review reflected on changes

manifested by the economic and technological dynamics of the workforce. In short, the

modern organization was forced to change and adapt. Some companies were the pioneers

in this like W.L Gore and MorningStar who adopted a distributed leadership model over

fifty years ago. Others and most mainstream non internet or technology companies are still

utilizing the top down traditional hierarchy. This is evident by the lack of companies

available for inclusion in this research.

Zappos, a company known for its innovation in people management was the

catalyst for this research after they adopted holacracy, a new shared leadership model

developed in 2007. Increased media awareness highlighted the lack of understanding for

this model. Due to this media attention, Zappos employees were purposely not included

and the research aimed at using companies that had been involved with holacracy for at

least 12 months. This chapter will revisit the overarching question of whether this

organizational model can be a new dynamic structure for the modern workforce. In

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addition, the results will be summarized and implications discussed as they relate to

existing literature and finally limitations and future research will contribute to the overall

body of knowledge for shared or distributed leadership.

Summary of the Findings

Many other dissertations and research studies (Barbuto, 2005; Felfe & Schyns,

2004; Hetland & Sandal, 2003; Hinkin & Schriesheim, 2008; Just, 2011; Kouzes & Posner,

2007; Perkins, 2014; Tsai, Chen & Cheng, 2009; Walumbwa, Peng, Lawler & Shi, 2004;

Wegner, 2004) have been conducted in the United States and around the world on

management and /or leadership and in most of these cases, the research had mostly been of

a quantitative nature and utilized a proven Multifactor Leadership Questionnaire (MLQ) to

elicit traits of leadership and in some, how subordinates attitudes were affected by certain

types of leaders. No studies were found that had been published on holacracy specifically

and shared leadership from the employee perspective.

In order to gain insight and make recommendations for future research, a qualitative

methodology approach was selected. A series of semi-structured questions without any

direction or presumptions of outcomes were presented to participants. Media attention had

provided some potential areas of weakness in the model; nonetheless the questions were

not directed at specifics, rather left vague in order to garner the actual experiences of

participants. This proved interesting as much media speculation centered on decision-

making and the additional bureaucracy that holacracy would add to an organization.

While many themes arose from the interviews, once coded and analyzed, five

strong themes presented as the most relevant across all participants. Meetings, decision-

making, structure and hierarchy, leadership and productivity / motivation were the top five

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themes respectively. In addition to the five, two more; culture and emotional intelligence

percolated amongst the five. One participant was disregarded prior to any coding as P2 did

not meet the criteria for having been in the holacratic environment for over one year and in

addition to that had limited overall work experience when compared to the others in the

sample. After final coding, P10 was removed from the thematic analysis as this participant

presented with a self-confessed bias to holacracy and the decision was made that inclusion

would add little richness.

Discussion of the Findings

The results for the most part did not reflect the body of work in the academic

literature as most of the prior knowledge base was focused on management or leadership

traits of the single individual at the helm. Nonacademic literature introduced in Chapter 1

provided modern approaches to leadership (Baker, 2014; Collins, 2014; Katz & Miller,

2014; Laloux, 2014; Stack, 2014) whereas other academic scholars looked at hierarchy and

self-directed teams (Grigg, 2010; Kaufield, 2006; Langfred, 2007; Proença, 2010; Zitek &

Tiedens, 2012). Not surprisingly the top two themes based on relevancy were neither

leadership nor hierarchy, rather meetings and decision-making as these two elements are

the fundamental differences in the holacracy model.

Meetings

A diametrical approach to traditional hierarchy with meetings being attended by

only the senior leadership in each department, holacracy aims to engage everyone in the

meetings that pertain to their area of expertise. The meetings also have a definite structure,

being either governance - working on the business; or tactical - working in the business. In

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the holacratic model anyone and everyone has their own space to be heard. This was

mentioned by most participants; however there were both positive and negative reactions.

P3 observed:

A lot of people had problems with the meeting structure you know - you are not

allowed to talk at certain times and everything . . . when they couldn’t talk at a

particular time.

P4 stated:

I like that everyone has their own space before the meetings were monopolized and

now it is freeing to see people come out of their shell.

P6 remarked:

Some people prefer to just go through the motions . . . it has held us back; people

are intimated by the rules . . . We never would have objected to the president before

. . . now everyone feels like it is a requirement to give opinions and sometimes too

much, when we aren’t even in the role to say it - we have given ourselves the space

to own the work.

Prior academic literature failed to include any research on the execution of

leadership at this level; rather the focus was on traits or behaviors of the leader. With no

direct question in the positive or negative, the theme of meetings emerged in consensus as

the most prevalent theme. Meetings contributed to 15% of all conversations undertaken

with participants, and 89% of all participants mentioned the term as least once. This is not

surprising given that the new meeting format is the most different from traditional

hierarchy and the meeting structure itself is considerably different from the management

meeting structure observed by senior executive teams during typical strategy sessions.

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Some research included meetings albeit in an assumed fashion as the era of Total Quality

Management (TQM) did include the process of delivery; however this had more to do with

documenting the process of production than the process of meetings. Holacracy is

extremely rigid in meeting structure.

Decision-Making

Decision-making was a topic of great interest by the media predicting it to be the

downfall of holacracy (Feloni, 2015); however when reviewing academic literature on

leadership, decision-making was not a strong pervasive concept. There was some inclusion

with the idea of bureaucracy and autocratic styles of managers and leaders, but prior

research revolved around the interaction between leaders and subordinates and simply

whether shared or distributed leadership (DL) was a good thing or presented significant

improvements in productivity and even followership – the notion of the degree to which

someone is covertly encouraged to follow the leader (Jain & Jeppe Jeppesen, 2013;

Zaleznick, 1978). In line with followership, authenticity and honesty were also outcomes

in prior research (Hollander, 1978; Kim et al., 2002; Meindl, 1993; Steyrer, 1998);

however the aspect of decision-making fell short even when discussing G.L Gore and

MorningStar who had both been long advocates of DL (Kouzes & Posner, 2007; Spears &

Lawrence, 2004).

Participants in contrast to academic literature ranked decision-making as the second

most relevant theme with 14% of all conversations mentioning the term. For the most part,

the ability for an individual to have ownership over their domain was a positive thing.

Only one participant failed to bring up or comment on decision making when guided as

decision-making was not included as its own unique question on purpose. With the media

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attention directing the conversation that way, it was the intention to let themes evolve

organically and not force participants into preconceived outcomes.

Structure or Hierarchy

While mentioned by 100% of participants, structure or hierarchy placed third in

terms of relevance with 13% of all conversations commenting on change in structure. Most

agreed that the traditional hierarchical structure had not been removed, rather the boxes had

simply been replaced by circles and sub circles. Once again, academic literature placed

little emphasis on organizational structure in favor of traits and behavior of leaders. It is as

though structure or traditional hierarchy exists in a vacuum to leadership. Crainer and

Mujaba (2014) did present the notion that the transactional approach was somewhat

focused on organizational structure and linked this to increased productivity, however it

was still focused on management of resources rather than the leadership of people.

W.L. Gore’s organization was presented as a lattice structure rather than a top down box

based diagram, but was still more of an expression of their distributed leadership than any

formal organizational design.

Most of the conversations around structure came from the direct questions posed to

participants in regards to them explaining what holacracy is or how they would describe it

to someone not yet familiar with it. The separation of people with titles and roles was

clearly understood, however there was some disagreement between the clarity of the

previous hierarchy and the flattening of the holacratic one. Several now understood and

cherished the ability to be able to say no and push back on tasks that in the past they would

have simply taken on. Explicit roles and accountability presented a new found freedom not

previously afforded the rank and file.

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Leadership

Leadership or the new methodology of leadership prescribed by a holacratic

organization is central to the research question and is fundamentally opposite to the

traditional hierarchical notion of leadership being separate to structure. It is the underlying

premise of holacracy that change in organizational structure empowers change in the

leadership model. Scholars had agreed that leadership did in fact evolve to suit the

demands in the economic environments companies found themselves operating in

(Kulesza, Weaver & Friedman, 2011; Pellissier, 2011). It was conceivably and highly

expected that multiple models existed concurrently (Almusaileem, 2012; Pellissier, 2011).

The dichotomy of bureaucratic-transactional and charismatic-transforming

leadership illustrated by Antonakis and House (2002) was in essence the representations of

management and leadership. Management focused on the transactional elements or process

and leadership focused on traits and behaviors of leaders and to a certain degree in recent

years, traits and behaviors of the rank and file. Not dissimilar to the transactional /

transformational continuum, leadership in its previous iterations and shared or distributed

authority exist on their own continuum.

Early scholars concluded there was some correlation between the rank of an

employee and their ability or aptitude to self-manage (Fiedler, 1996; Hersey & Blanchard,

1969). Leadership and self-management were discussed by the same percentage of

participants with 78% making reference to both terms. Leadership however obtained a

higher level of relevance at 9% over 6% for self-management. This was reflected in the

responses around the problems prior leaders or managers were having adapting to the

holacratic environment.

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Productivity / Motivation

Certain scholars included productivity and motivation in their leadership theories

with many contributing to the theory that an effective or productive leader would influence

and encourage greater output through transformational or charismatic leadership than

through transactional leadership. (Ardichvili & Manderscheid, 2008; Avolio & Bass, 1988;

Bass & Riggio, 2006; Cragg & Spurgeon, 2007; Northouse, 2004; Podsakoff et al., 1990;

Yukl, 2006; Zaleznik, 1978). Productivity was discussed by nearly 60% of participants and

most suggested they were still too early in the process to really judge the success of the

change. Relevancy was only 8% and this reflected that any change management initiative

takes time to produce results and for the most part, productivity was understood by most to

be something that would increase over time, however there were more important issues at

hand.

Culture and Emotional Intelligence (EI)

Participants often discussed emotional intelligence whether by that term or some

derivative as a contributing factor to someone’s leadership ability. Goleman (2000) had

reflected on this and was aware that “self-awareness, self-management, social awareness

and social skill” (p. 80) were necessary for effective leadership. Culture was the other

aspect discussed and scored the same as EI with 44% of participants commenting on it,

however nearly twice as many of participants (7%) feeling EI held more relevance to the

change management process happening with the introduction of holacracy. The academic

literature was somewhat silent with the exception of Goleman in respect to culture and EI

and EI was not discussed as it related to follower only leaders. The whole issue

surrounding EI that has emerged from this study reflects on the lack of attention given to

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the people aspects within holacracy and shared leadership in general, and supports the call

for future research to include EI of all participants in company leadership.

Discussion of the Conclusions

Chapter 1 made mention the aim of this research was to start the conversation

regarding dynamic governance and a new organizational model called holacracy. In that

sense it has achieved its objective. While self-managed or integrated product teams (IPTs)

have evolved at the micro level, there had not been distributed authority or shared

leadership at the macro level with a few exceptions. This new thinking discussed in the

books by Laloux (2014) and Collins (2014) expanded on the holacratic model presented by

Robertson in 2007. Flatter structures and the end of the ego driven CEO were becoming

more the norm with Zappos taking a stand as a large organization willing to embrace a

shared leadership model previously only existing in organizations smaller than 100

employees.

The results of this research while reflective of the significant differences in the

methodology of holacracy and a traditional hierarchical organization provide little in the

way of a definitive response to the research question that dynamic governance in the

holacratic form is the organizational structure for the modern workforce. In reality

however, it does support the notion of the movement from the authoritarian manager to the

self-directed individual contributing to a larger shared vision. All participants were in

agreement that a shared leadership environment was one they would prefer over traditional

hierarchy; however only 80% would choose a holacratic organization and many had

reservations concerning implementation. No generalizations to the larger population can

be transferred however with 100% of participants favoring a shared leadership organization

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it definitely contradicts the initial view of the researcher which was individuals would be

happier with structure and a visionary leader.

No theme garnered more than 15% relevancy and the difference between each of

the fourteen themes was in most cases 1% or less. This suggests further research and more

directed questioning on each of the themes by a larger sample population. It is also

assumed here that the length of time holacracy had been implemented in each of the

companies needed to be considerably longer; however this would have reduced the sample

population and created a significant bias in the results. Fourteen themes emerged and while

some could be amalgamated for example leadership and self-management; this was not

undertaken as these are seen, as reflected by the participants, as opposing ends of the same

continuum. Transparency, collaboration and communication could be considered

likeminded as could clarity; nonetheless without further questioning of participants, the

value of maintaining separate themes was deemed to outweigh any revelations combining

them could potentially offer. Even when leadership and self-management were combined,

the result again was less than 15% and was barely higher than meetings and decision-

making at 14% and 13% respectively.

A fundamental component to holacracy is shared leadership or self-management

and what was evident from participants was the focus on transactional level activities, these

being meetings and decision-making. Clearly as holacracy is a new model, the differences

between existing organizational structures will be paramount; however the body of research

into leadership theory could undoubtingly benefit from additional understanding into the

shared leadership aspect of holacracy, rather than the mechanics of the day to day

management of the model. Current academic literature for the most part researches

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leadership from the perspective of the individual leader and in most cases this is a single

individual or small group of individuals that oversee the larger body of individual

contributors. Holacracy aims to make each individual their own leader and it is from this

perspective further research should be viewed.

One critical element understated by many participants was the emotional

intelligence (EI) theme and this is not surprising due to the fact that you need some level of

EI to be aware there is a lack of it. Goleman (2000) contended most leaders or people in

leadership positions have “blind spots” (p. 88) and are simply unaware of their own

limitations and frequently seek out coaches who highlight growth areas. This was

illustrated by many participants stating they no longer needed to listen to others and should

they not feel like finishing a task or going to a meeting or even showing up at work, they

didn’t have to, as they no longer had a manager they reported to; they reported to

themselves. This was not the intention of holacracy; rather the freedom holacracy presents

should elicit the opposite reaction in individuals.

Limitations

The intention of any qualitative research is to capture the experiences of

participants and garner potential frameworks for future research. It is always conceivable

and somewhat predictable that a small sample population will result in a further reduction

once all data are collected. This research followed that prediction with the first participant

being discounted due to holacracy no longer being the chosen model for that organization.

A second participant was eliminated as the time with the organization was less than the

criteria of one year. The starting sample size of 12 was reduced to ten with a final

participant not included in the thematic analysis due to the overarching negativity towards

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holacracy as a model. This final sample size is the first limitation in this research,

nonetheless a saturation of responses were received after the first 5 interviews.

In respect to adding to the knowledge base on leadership theory, the results reflect

more interest in the mechanics of the new model then the traits and behaviors of leaders.

This could be because holacracy has not had enough time to be implemented and adopted

by a significant number of organizations for more than one year, by companies willing to

take part in the research. Assumptions can be made to the reasons for this, however add

little to the value of the study.

Recommendations for Future Research or Interventions

A qualitative study might present recommendations for quantitative research in

order to provide generalizations based on themes uncovered during the qualitative study. It

is unknown whether there is a validated quantitative instrument for shared or distributed

leadership. In lieu of this and with the large sample population available within Zappos, it

would be recommended to utilize this group for an in-depth qualitative study. This

additional qualitative study could expand on the leadership and self-management themes

and redirect the study to have this focus rather than spend time on the mechanics of

meetings and decision-making, although decision-making may play a part in leadership.

An underlying theme only recognized by 44% of participants was emotional

intelligence (EI) and there are instruments that measure this and therefore a quantitative

study could be conducted on this element of holacracy and added to the qualitative

approach. There are two population samples that would be useful for future research, the

first being the individuals currently working in a holacratic organization and those who

have left one. The media highlighted the fact that Zappos offered a package to all its

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employees and 14% decided to leave with the package. What was unclear was the root

cause of individuals taking the package as that was never published. In contrast, it was

never actively mentioned that 86% chose to stay in the holacratic environment.

This research included two new ideas with regards to leadership and at this time no

academic research exists on the work of Laloux (2014) and Collins (2014). Zappos is

attempting to move to teal or the nirvana of organizational structures. As we move from

the confines of the traditional organizational hierarchy and physical office locations to the

virtual or remote worker who by the very nature of that situation must be self-managed to

some degree, further research is essential to discover how the modern workforce will adapt

to new leadership and organizational models.

Conclusion

Holacracy gained wide media attention in 2015 when online articles were

commenting that Tony Hsieh was experimenting with Zappos and giving individuals an out

of the madness. Each new notion of leadership theory has had its adversaries and

detractors and holacracy is no different. Total Quality Management (TQM) and Just in

Time (JIT) at one point were what companies had to adopt to be successful. There are

companies in manufacturing that are no doubt still using TQM or JIT and it is likely that

this is the best methodology for them. What separates TQM and JIT though is that they are

both management practices as opposed to leadership theories. What cannot be argued is

that with each new age be that driven by war, technology or a generational change in the

working population, leadership is here to stay in some form or another.

Most recent scholars agree transformational or charismatic leadership will

positively affect productivity and by association the performance of the organization based

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on whatever measures the organization deems relevant (Hyldelund & Fogtmann, 2011; Jain

& Jeppe Jeppesen, 2013; Just, 2011; Kouzes & Posner, 2007; Perkins, 2014). All

participants, including those who did not particularly like holacracy, were drawn to a

shared leadership environment. There was a clear direction presented that each participant

in the study had a desire to be a leader to some degree. This may have only been seen as

the participants were all volunteers and those not attracted to a leadership role did not

volunteer to participate. Is leadership therefore a calling and only those willing to answer

the call will step up to take the lead? That is for future research.

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172

APPENDIX A. STATEMENT OF ORIGINAL WORK

Academic Honesty Policy

Capella University’s Academic Honesty Policy (3.01.01) holds learners accountable for the

integrity of work they submit, which includes but is not limited to discussion postings,

assignments, comprehensive exams, and the dissertation or capstone project.

Established in the Policy are the expectations for original work, rationale for the policy,

definition of terms that pertain to academic honesty and original work, and disciplinary

consequences of academic dishonesty. Also stated in the Policy is the expectation that

learners will follow APA rules for citing another person’s ideas or works.

The following standards for original work and definition of plagiarism are discussed in the

Policy:

Learners are expected to be the sole authors of their work and to acknowledge the

authorship of others’ work through proper citation and reference. Use of another

person’s ideas, including another learner’s, without proper reference or citation

constitutes plagiarism and academic dishonesty and is prohibited conduct. (p. 1)

Plagiarism is one example of academic dishonesty. Plagiarism is presenting

someone else’s ideas or work as your own. Plagiarism also includes copying

verbatim or rephrasing ideas without properly acknowledging the source by author,

date, and publication medium. (p. 2)

Capella University’s Research Misconduct Policy (3.03.06) holds learners accountable for

research integrity. What constitutes research misconduct is discussed in the Policy:

Research misconduct includes but is not limited to falsification, fabrication,

plagiarism, misappropriation, or other practices that seriously deviate from those

that are commonly accepted within the academic community for proposing,

conducting, or reviewing research, or in reporting research results. (p. 1)

Learners failing to abide by these policies are subject to consequences, including but not

limited to dismissal or revocation of the degree.

173

Statement of Original Work and Signature

I have read, understood, and abided by Capella University’s Academic Honesty Policy

(3.01.01) and Research Misconduct Policy (3.03.06), including Policy Statements,

Rationale, and Definitions.

I attest that this dissertation or capstone project is my own work. Where I have used the

ideas or words of others, I have paraphrased, summarized, or used direct quotes following

the guidelines set forth in the APA Publication Manual.

Learner name

and date Bronwyn O’Shea 9/30/2016

Mentor name

and school Angela Bruch, Capella University

174

APPENDIX B. QUESTIONNAIRE

Holacracy - A case study of dynamic governance for the modern workforce?

PARTICPANT INFORMATION

Participant Name: Participant No:

DEMOGRAPHIC QUESTIONS

Gender: � Male / � Female

Time in the workforce: � Less than 1 year

� 2-3 years

� 3-5 years

� Greater than 6 -10

� Greater than 10

How long have you been working in a

holacratic work environment?

� Less than 1 year

� 1 year

� 2-3 years

� Greater than 3

Were you working at the organization prior to

holacracy being introduced?

� Yes

� No

Were you involved with the decision to

implement holacracy in the organization?

�Yes

� No

What is the size of the organization? ______________

How many employees within the organization

are involved with holacracy?

� Less than 50%

� 50-75%

� 100%

175

INTERVIEW QUESTIONS

How would you describe the way you worked before holacracy?

In terms of hierarchy, titles, etc., politics, familial or not, relationships, “role-ationships”.

How does holacracy impact your day to day work?

What were your perceptions of holacracy prior to it being introduced at the company?

How would you describe holacracy? To someone who had no experience or exposure to it.

What are your perceptions of holacracy now?

What do you dislike most about holacracy?

What do you like the most about holacracy?

What were the things you struggled with when holacracy was implemented in your

organization?

How has your motivation/productivity changed since moving to Holacracy?

What are your thoughts on the lack of titles or hierarchy?

How does this affect your career progression and movement into a management role?

What is your overall experience of having holacracy introduced into your working

environment?

ADDITIONAL QUESTIONS

Describe your level within the company prior to the introduction of holacracy.

How did the organization structure change, did they replace the existing hierarchical

organizational chart, or did they simply place holacracy on top?

What are your thoughts on moving to another company that works in a holacratic model?

What things could be handled differently, or make holacracy better?

What are your thoughts on how bureaucracy has changed and affected the decision making

process?

What are your thoughts on consensus in the holacratic model?

What are your thoughts about the overall implementation versus the model itself?

What leadership changes took place as a result of the introduction of holacracy?