Good, now they'll just suffer under the tyranny of the informal de-facto organizational structure. Now instead of getting work done, people will dedicate their time to internal politics and jostling for group position.

The best part is that issues are usually resolved by either those who can yell the loudest or most deftly maneuver the wild-west political environment. Survival for those not at the top means finding the dominant group think and ensuring membership in that group, preferably under a patron you provide favors to in exchange for ensuring membership in the strongest group in the office. As an employee, over the long wrong, this kind of organization is a nightmare, where to next for my career? What happens when I leave, what do I put on my resume to demonstrate increasing skills and levels of responsibility? Even worse, wait until you get a few conspiratorial bad actors in the organization and now there's nobody who can cut that cancer out of the organization and get things working right again.

I'm sure Hsieh is going to enjoy working in shipping or filing when the alpha male and his coterie comes knocking on the corner office. I'm sure salaries, bonuses and other pay structure will be flattened out across the board.

Oh wait

>CEOs who sign on to Holacracy agree to cede some level of power.

So there's still a CEO

> It’s not leaderless. There are certainly people who hold a bigger scope of purpose for the organization than others.

Oh I see.

So what this is is one of those organizational plans that denies organizational structure while still formally observing one. So not only do you get all the downsides of the informal organizational structure, you aren't even aware that there is a formal one until you get slapped across the paycheck for not observing it.

And how are decision made in a holacracy? reads up on holacracy (oh my god I haven't seen such vague handwavy nonsense since my cousin tried to get my mom hooked on healing through crystal vibrations, well they don't quite come out and say it, but it appears to be through layers of committees. If one committee is bad for making quick, agile, well reasoned decisions, imagine fractal layers of nested committees. It makes congress look like a well functioning organization.

This all sounds vaguely familiar reads up more on the topic...oh yeah "autonomous work teams". Yeah...those. That worked great the last 5 times it was tried at any kind of scale.

I remember working for a "title-free flat organization" once. I was managing a contract with an outside firm and during a meeting, I introduced myself as the program manager for this work. After the meeting my CEO took me aside and said that she really objected to me using the term "manager" when representing myself. I noted that what I called myself was an industry normal term and the other organization needed that as a communication token. She insisted that in our company nobody had such hierarchical titles. I told her I objected that we were being thought of as faceless replaceable cogs in the company and offered to switch jobs with one of the new interns if we really were flat or were just pretending. The next week I received my business cards with "Program Manager" on the card. Three months later we started introducing titles again when issues in development were being left unresolved because nobody could assume the role of dictator and push through needed work prioritization schedules -- people had literally just stopped working on the product and started working on personal interest pet projects.

The best part is when this all falls apart, the One True Scottsman will come out of the highlands and proclaim that holacracy was not well implemented in this organization and that's why it failed. The impossibly vague materials available on how it works ensures this.

Here's a decent writeup on what Holacracy actually is, in favorable terms. You'll note it appears to basically be a conference system, designed to get $4k out of conference participants while also ensuring it's vague enough that they have to come to the conference 2 or 3 times to "get it." http://organizationalphysics.com/2014/03/09/an-inside-look-a...

It also appears to be a revision and rebranding of a previously described organizational theory called Sociocracy https://en.wikipedia.org/wiki/Sociocracy

interesting debate on this here in the comments http://www.sociocracy.info/holacracy-sociocracy/

An oft cited big company that successfully uses this model is Gore. You can read the reviews on Glassdoor about what the problems employees have with the company http://www.glassdoor.com/Reviews/W-L-Gore-Reviews-E3044.htm

Here's some highlights from just the first couple pages:

- "things move somewhat slowly"

- "Something of a popularity contest at times, the feedback you receive can be quite inaccurate and harsh. The culture is both an asset and a hindrance...Need to bring in some experienced persons and start running like a normal company."

- "Good ole boy system in place."

- "Change is not welcome - older employees tend to fear new ideas that are being brought onto the table. "

- "Waiting on people to continue with your projects can take a very long time"

- "Not much room for advancement if you start in manufacturing."

- "-No work life balance for those in operations (professional and production associates) due to no processes, backups, or proper business planning. This is a direct reflection of poor/incompetent leadership...Not a quality driven company. Most products I had experience with cannot be made the same way twice and product specs are vague at best..."

- "The most nepotistic company I have ever had the experience working at in my career."

- "Good ol’ boys network is alive and well at Gore along with the friends and family plan. “Successful” leaders have at least 3+ family members working within Gore"

- "Firefighting is rewarded and encouraged. 99% of these fires would be avoided if they had a clue about a quality culture."

- "Career development is a joke."

- "The Lattice “Flat” structure is real within Gore but there are lattice layers with stairs between the layers (those that have the access to the stairs are good ol’ boys and are well connected)."

- "Difficult to quickly make decisions"

- "office politics,...more who you know not what you know"

So, decisions by committee make things move slowly (no duh), nepotism and informal power structures dominate, quality culture is low, lack of direction, business planning, leaders are those that can rally the most troops (usually by hiring relatives), not provide the best business practices. Basically all the things you'd expect from a flat organization.