The workplace is in massive flux. Daily headlines dramatize the impact of technologies such as artificial intelligence, robotics, and blockchain on virtually every aspect of how we work and live. Competition for talent, globalism, complexity, and the accelerating pace of change are conspiring to disrupt how we work. Social sector organizations focus primarily on the interventions that drive their approach to complex systems transformation—what they do to create a better world. But they also must consider whether their internal operating system—how they work—is serving them, their clients, and their pursuit of social impact.
Many organizations are stuck in antiquated structures that impede rather than enable employees to bring their best selves to work. Silos, dysfunctional power dynamics, and bureaucracy get in the way of collaboration and creativity. Hierarchy is a vestige of industrial manufacturing, designed more than 100 years ago to parse work into mundane tasks to maximize productivity. The metaphor for organizations based on this model was a well-oiled machine, and people were cogs in the wheel. Management became a professional role to control work and workers. A consequence of powerful management has been passive employees. According to Gallup, a staggering 67 percent of employees worldwide are not engaged at work, and this negative trend has persisted for more than 15 years—a legacy of an anachronistic system.
Nonprofits have adopted business practices for decades to professionalize and improve accountability. These changes, often incentivized by funders, also expanded layers of management and control-oriented policies. In today’s environment, these ossified practices may interfere with organizations’ capacity to address complexity and a rapidly changing environment.
If the predominant command-and-control paradigm is a mismatch to address complex social system challenges, what features characterize an alternative? I work with The Ready, a consultancy that helps enterprises from diverse sectors transform their operating system to organize for complexity. Our research and practice signal the need for fundamental shifts in organizational architecture:
- From short term profit maximization to shared purpose and value creation
- From hierarchy and bureaucracy to distributed and autonomous teams
- From command-and-control management to enabling leadership
- From rigid planning to safe-to-try experiments
- From information and communication secrecy to transparency
Frederic Laloux brought these principals and forms to life in his 2014 book Reinventing Organizations. He shared case studies and also introduced a framework for these emergent structures, labeling it “Teal.” The Teal model has three core characteristics:
- Self-management based on peer relationships rather than hierarchy
- Wholeness based on bringing the whole person to work
- Evolutionary purpose at the core of work and emergence amidst complex systems
“Holacracy” and agile are other models promoting responsive organization. Holacracy is a system for governing self-management and distributed decision-making. Agile is a concept that started in software development and has become an umbrella term for broad-based organizational transformation. It is an approach that emphasizes incremental delivery, team collaboration, and continual planning and learning.
But these types of structural changes, while promising, are not a panacea for solving entrenched organizational dysfunction. Simon Mont, a fellow at the Sustainable Economies Law Center, cautions that while these interventions may be well-intentioned efforts to increase equity, empowerment, and efficiency, an array of seen and unseen forces make it difficult to manifest more human-centered and just workplaces. He warns, “To achieve the kind of workplace that holacracy and like systems promise to enable, we must be mindful of the implicit biases, explicit prejudices, intergenerational/historical traumas, microaggressions, and multiple other forces at play in most workplaces.” Mont raises credible concerns. As organizations continue to experiment with new models and pursue an explicit focus on equity and inclusion, we will gain better insights into how and why new approaches operationalize social justice values.
I serve on the board of a start-up called Loomio, a worker-owned cooperative social enterprise that produces open-source software for collaborative decision-making, and we apply many of these adaptive approaches to the company’s work structure, processes, values, and culture. The team identifies short-term deliverables during disciplined, bi-weekly meetings. Staff share commitments transparently using the digital platform Trello, and in retrospective meetings we assess results, learn from successes and failures, and revise work rapidly. This intense operating rhythm means we can change course quickly—a cornerstone of the company’s seven-year evolution.
We have also embraced self-management full force. Many people are skeptical when I share that we operate without a CEO. Yet this nimble structure means we constantly learn and iterate, re-organize adeptly, leverage the diverse talents of our team, and share responsibility and power. As a start-up, we have had our share of ups-and downs, and working through these challenges has not been easy, but it has made us resilient. At one point, we terminated our own contracts (yes, we fired ourselves) to balance the budget, and then, with a clean slate, re-arranged work priorities and roles to match our limited resources. We made an effort to work through these changes with respect and caring, which proved central to our survival. Today, we monitor risks and trust team members to meet shared agreements. Without traditional managers, we support each other through a stewarding system that assures that each team member has an ally to work through challenges, and our regular retreats contribute to the cadence of each year, creating space for reflection and planning as well as fun and renewal.
Liberating structures and cultures are gaining visibility as a growing number of companies—including Spotify, Morningstar, Patagonia, Gore, and Zappos—adopt them. Social impact organizations are also testing new models designed to tighten feedback loops with users, strengthen employee engagement and creativity, and streamline work processes by leveraging technology tools. For example, Burrtzorg, a home-nursing company based in the Netherlands, is structured as a network of self-managed teams. In 2007, four nurses formed a self-managed team to serve patients better and maximize nurse autonomy. Today, the company has 1,000 self-managed teams serving 24 countries, has expanded services such as mental health, and is a sustainable enterprise. Its financial results are exceptional, as are its customer service standards and employee satisfaction. For Burrtzorg self-management has proven a viable model for sustainable growth and social impact.
Another example is Namasté Solar, an employee-owned cooperative democratically co-owned by most of its 170 employees. Distributed leadership and decision-making have been vibrant throughout its 13 years of operation. Co-founder Blake Jones credits the company’s long-term success in the highly volatile and competitive solar market to its persistent commitment to adopt policies and practices that are aligned with its values. One example is sharing information transparently across the organization and holding open meetings, often called open-book management. Last year, the company started experimenting with self-management, forming autonomous work groups it calls circles. These functionally diverse teams aim to stay nimble amidst market turbulence. They pursue experiments to solve priority issues, conduct regular retrospectives to reflect and learn, and iterate to improve and adapt.
Each of these social purpose organizations is designing new approaches to how they operationalize their work in order to leverage the unique talents of their employees in service to the people they serve.
Given the challenges facing the social sector, we need to focus relentlessly to identify new approaches to solve problems. We need a bias toward fast prototyping and multiple iterations to create what users need. And we need to engage our people and support them to bring their best selves to work. The metaphor for today’s organization is a living system. If we scale learning, rather than efficiency, we will accelerate both what we do to solve the world’s problems and how we work together to improve faster.