No boss, no problem: Exploring the power of self-managed organizations

Imagine leading a company where there are no rigid hierarchies and teams collectively make decisions. For organizations that prioritize innovation, autonomy, and creativity, self-managed models like holacracy are gaining traction. These frameworks shift the focus from traditional authority structures to empowered teams, offering leaders a way to cultivate flexibility and collaboration throughout their workforce.

The system was popularized by companies like Zappos (USA) and Buurtzorg (Netherlands), and it aligns with Frederick Laloux’s ideas about ‘Teal organizations’ gathered in his best-selling book Reinventing Organizations where self-management is a core principle. So, what is the purpose of these new ways of working, why is the movement gaining momentum, and what are the pros and cons?

Purpose-driven structure

Holacracy, introduced by Brian J. Robertson, is a management framework designed to distribute authority and decision-making across teams. Instead of adhering to traditional leadership hierarchies, individuals in self-managed organizations take on defined roles and collectively contribute to decision-making. As described by Corporate Rebels, “Holacracy is a never-ending search process for the structure that’s most ‘fit for purpose’ for your organization.”

The key principles—transparency, experimentation, empowerment, and equality—guide self-managed models, where the ultimate goal is for organizations to operate in service of a greater purpose.

One good example is the Spanish natural cosmetics company Alqvimia. Under their sustainability and values section on their website, they state, “We support the autonomy of self-management with holacracy and without hierarchies, because the most important thing for us is that people are happy.”

For Drolma Lizcano, Alqvimia’s CEO, the secret to their success is people agreeing on giving away power, aligned in their values, being responsible, and trusting each other. “As a CEO I’m the first beneficiary of the system. A CEO can’t solve everything and know about everything. It’s not healthy and it’s not viable.” Lizcano sees her role as a facilitator of change, defending a purpose as noble as promoting social transformation.

Shifting power without removing management

Self-management doesn’t mean eliminating leadership—it’s about distributing leadership throughout the team. As Laloux often emphasizes, the key mindset shift is moving from ‘power over people’ to ‘power with people.’ In this model, authority is shared, enabling teams to collaboratively achieve organizational goals while retaining accountability.

Ita Casas, head of marketing at Alqvimia, clarifies that they still keep their job titles so that the external stakeholders have a reference. However, this does not mean that all decisions related to marketing are in her hands or that she has more power than others. The people in the circle are entirely responsible for making the necessary decisions to achieve results. The company has been operating as a self-managed organization for seven years in a successful way, proven by their sales records and employee engagement. “Our clients see us as authentic and honest in our vision of a humanized economy,” says Casas.

The pros of self-managed organizations

Self-managed organizations offer several advantages that can foster creativity, autonomy, and increased employee satisfaction.

1. Greater autonomy

In self-managed organizations, employees enjoy greater autonomy in their work. Without the layers of bureaucracy found in traditional management structures, team members can focus on tasks that excite them, leading to higher job satisfaction.

2. Higher employee engagement

Buurtzorg, a self-managed healthcare provider in The Netherlands, empowers thousands of nursing teams to manage patient care and HR independently. This model results in more satisfied employees and better patient care outcomes.

3. Transparent compensation structures

Companies like 10 pines, an Argentine software company, have embraced transparency by allowing employees to openly discuss compensation and share in the company’s profits. At the end of each fiscal year, a percentage of profits is divided among all employees, fostering a sense of shared responsibility and reward.

4. Boosted productivity

Research from McKinsey shows that companies granting more autonomy within clear frameworks of responsibility tend to see an increase in productivity.

The cons of self-managed organizations

While self-management offers many benefits, it also comes with potential downsides. Some employees may struggle with the lack of clear authority, while larger organizations may find it difficult to scale this model. Additionally, ensuring accountability without traditional managerial oversight can be a significant challenge.

1. Resistant to change

Transitioning to a self-managed structure can be challenging, especially for employees who are accustomed to traditional hierarchies. As Lizcano points out, not everyone is comfortable with self-management. Some employees prefer clear direction from managers and struggle with the uncertainty of shared decision-making. Resistance can lead to dissatisfaction or even high turnover. However for Alqvimia, implementing this system has resulted in higher employee retention as new talent adapts to the culture.

2. Unclear accountability

One of the biggest challenges in self-managed organizations is ensuring accountability without traditional managerial oversight. Without a designated manager, it can be difficult to hold individuals accountable for their performance, leading to potential issues with task ownership.

3. Complexity in scaling

Larger organizations, with more complex structures and greater numbers of employees, often face additional challenges when attempting to adopt self-management models. Research from companies like Zappos, which had over 1,500 employees when it adopted holacracy, highlighted that scaling the model in larger companies added layers of complexity as decision-making became cumbersome.

4. Leadership’s lack of control

Implementing self-management requires leaders to relinquish traditional forms of control. Ricardo Semler, Brazilian CEO of Semco Partners and a proponent of corporate democracy, emphasizes that leaders must take a “leap of faith” and trust their teams, which is a struggle for those accustomed to command-and-control leadership.

Implementing self-management: Where to start

While the principles of self-management are appealing, successfully implementing them requires a strategic approach. As Laloux advises, fostering personal growth and cultivating a culture of trust are critical to ensuring a smooth transition. Transparency and open communication are essential to align teams, clarify roles, and maintain purpose-driven operations throughout the organization.

“We need to start by changing our behaviors. It is very difficult to tell people to change their mindset. It is easier to change the processes and the behaviors with a new method and then the principles will come” says Robertson.

“Self-management models work, as demonstrated by Laloux’s Teal organizations and the companies of the NER group. However, moving from a parent-child relationship between senior management and employees to a horizontal dynamic of adults as equals will come with a challenging transformation,” says Maria Lorenzo, a sustainability and leadership consultant who has worked with Krisos. She explains that in a world that can be individualistic and unbalanced, self-management allows us to achieve a harmonious balance between the different stakeholders.

Incorporating insights from Laloux’s journey and self-managed models offers a path forward for people and organizations that want to foster growth, engagement, and innovation. However, the journey requires patience, adaptability, and a willingness to experiment and rethink conventional structures.

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