Agility, remote work, personal responsibility, flat hierarchies – many companies are adopting this way of working. This raises the question for me: do new organizational models replace good leadership, or do they even make it more difficult?
The idea of simply abolishing the “boss” is tempting. It promises a utopia of self-determination, where motivated experts pull together in the same direction, free from the burden of bureaucratic approvals and the micromanagement of a control instance. But is this dream of a leaderless organization really the answer to the challenges of our time? Or are we overlooking why leadership – in the right form – is indispensable?
Can a company be successful without traditional leadership?
In today’s business world, new models of leadership and organizational design are constantly being tested. One of the best-known is Holacracy. This approach aims to dissolve hierarchies. The concept is based on high employee autonomy: roles and tasks are determined through circle structures and processes rather than by managers. Decisions are made collectively, and everyone in the company has the opportunity to contribute their input directly.
Some companies have already implemented this approach, for example, the online retailer Zappos, the online publishing platform Medium, and GitHub. All eventually stepped back, realizing that Holacracy did not produce the desired effect on company performance. Reasons included:
- Power vacuum
- High bureaucratic effort due to complex rules
- Slowed processes
- Unclear responsibilities
- Chaos when scaling
- Informal power cliques
- Lack of career paths and mentoring for employees
- Strain from lack of clear leadership
- No decisions due to missing direction
Is Holacracy doomed to fail?
The idea of leaderlessness may work in small, highly motivated teams in the short term. However, the larger and more diverse a company becomes, the harder it is to maintain a shared course. Without clear leadership, there is often no vision for the organization’s long-term direction. Moreover, some employees actively take responsibility, while others withdraw from decision-making, creating imbalances. This often leads to more conflicts, as responsibilities are unclear and every employee has decision-making power.
Many organizational and leadership models that are hailed as saviors often show disappointing results in everyday business life. In many cases, I think: “This is unnecessarily complicated.” Companies want to “empower” their employees by giving them more responsibility, hoping this will automatically improve performance. But they are still working with the same people, who continue to act according to the same thinking and behavioral patterns – and this additional responsibility overwhelms many.
The result is an even more complex organizational and leadership model with countless interfaces. Because it doesn’t work, the company begins to continuously refine its “new” model: new roles are constantly defined, responsibilities shifted, additional coordination bodies established, and more boards created. The organization becomes increasingly complex – while actual leadership work becomes increasingly diluted.
The six essential leadership competencies
New organizational models do not make leadership superfluous – on the contrary: they require excellent leaders who:
- consistently focus their team on value-adding activities,
- resolve conflicts confidently and do not carry personal grievances forward,
- do not “do the work themselves,” but fulfill their own leadership responsibilities,
- make clear decisions quickly,
- provide clarity and security – especially in uncertainty, and
- build a culture of accountability.
In my book “The Hero’s Journey of a Leader”, you will find practical examples of how to implement these competencies in everyday work.
What has been your experience with new organizational models in terms of leadership? I’d be happy to discuss it with you.