Suffering from a bad case of micro-managing? Maybe you are doing it yourself. Either way, it’s bad for business. We look at a new movement called ‘holacracy’ and how it may save your business (and your sanity).

With companies like Deloitte and NAB getting rid of classical performance reviews in favour of more regular feedback loops, scrutiny on how you run your business is now extending even further, this time to the traditional management structure.

As a result a style known as ‘holacracy’, that does away with management hierarchies by distributing authority among employees is now taking hold in companies across Australia.

With many claiming it is transforming their business from both a productivity and return per employee perspective, is it time you revisited your own beliefs about management?

What is holacracy?

Organisations employing a holacratic approach to management aim to empower teams of people to make business decisions, rather than rely on the traditional sign-off of by managers at the top of the tree.

In a nutshell, it’s about getting rid of the dreaded micro-management culture and office politics by distributing authority to those closest to the job that needs to get done. Advocates claim it reduces bottlenecks, creates more engaged employees and increases retention.

People don’t leave jobs, they leave managers

With studies showing that 50% of employees change jobs due to a poor relationship with their manager, holacracy might be the antidote your business needs.

Revenue and profits can take a hit when those staff that do leave are of the ‘racehorse’ variety, employees that live the culture, perform at a high level and thrive on being self-directed.

Instead, companies are often left with the ‘B players’, employees that fly under the radar on performance and culture and cost more than they bring in.

Four ways to introduce holacracy

Changing the management structure within your business is not for the faint-hearted. And while it may pay off in the long run, bringing your employees along for the ride is critical to avoid confusion and alleviate fears around loss of status and control.

Here are four actions you can take today to kick-start your holacratic journey, without throwing the management baby out with the bathwater.

1. Hire entrepreneurial-minded people to begin with

Unlike the corporate groundhog, small business is an ideal business environment for a self-driven, entrepreneurial minded employee who enjoys fulfilling multiple roles within your business, rather than slavishly adhering to a job description. Start building out your team with people you can trust to make decisions and holacracy should naturally follow.

2. Start distributing authority to your existing employees

As your business grows, as a manager it gets harder and harder to be across all the details you need in order to make decisions. Forcing your employees to run everything by you can result in decision paralysis, as you struggle to get your head around the pros and cons of every choice. Instead, let go of the reins with senior employees you trust and create a culture where they can call the shots, within reason.

3. Revisit your business structure more than once a year

Instead of sticking to an outdated organisational structure, capture regular feedback from your team about what is and isn’t working and then use that feedback to make small iterations to your organisational structure, rather than big ones. Small changes over time add up, but are far more palatable to employees than dramatic changes overnight.

4. Create a truly transparent culture, not a veil of transparency

Many organisations like to think they’re transparent, but more than often it tends to be one rule for employees and another rule for management. Employees soon wise up to this and this can lead to dissatisfaction and disillusionment.

Instead, for every project or task within your business, create clearly defined processes around who is responsible for what and to what extent task owners can make decisions without your input. This way employees won’t feel disempowered when you override decisions they thought were theirs to make.