Small Business, Big Opportunity: Replacing Traditional Management With Holacracy

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Having high engagement and low employee turnover is no small feat for a fast-growing IT company.

Photo Courtesy of Intrust IT.

For years, employee engagement at Intrust IT, a business technology provider, has been high. Having high engagement and low turnover is no small feat for a fast-growing IT company, “and we do it all without buying a single ping pong table,” jokes Tim Rettig, Founder, President, and CEO of the Cincinnati, Ohio-based company.

That’s why it was a bit of a surprise when a service manager came into the office one day in August of 2016, and told Tim that while he loved working at the company, he couldn’t handle the commute.

He thought about uprooting his family to move them closer to work, but ultimately decided he would get a job closer to his current home.

The employee’s departure prompted the inevitable questions that can arise when an employee leaves: Do we hire another manager? Do we promote from within?

Tim favored promoting from within, but it wouldn’t necessarily be a seamless transition.

They had a candidate who was a fit, but the larger concern was if they promoted that person, what if the same thing happened again in a few years? How do you move someone into a new role and get them up to speed quickly? And, how do you look ahead and make sure that person is still challenged by that role in two or three years?

It was these questions that brought a larger opportunity to the forefront.

In a fast-paced, demanding, and competitive industry, Tim had been wanting to implement Holacracy for years. (Holacracy is an organizational structure where decision-making is distributed throughout self-organized teams, according to HolacracyOne, a firm that helps other organizations implement the system.)

“Having interacted with hundreds of companies over the years, I had seen some dysfunctional management structures and ugly re-organizations. I had always wondered if there could be a better way, and when I first heard about Holacracy, I thought it might be that better way,” says Tim.

And, after studying it, Tim became convinced that he wanted to implement it at Intrust. The only question was how and when, and the employee’s departure served as the catalyst Tim needed.

He went to his leadership team to pitch them the idea.

He told them how Holacracy is an organizational structure where distributed authority replaces delegated authority. Self-organized teams have a purpose, and they decide how to reach it, he shared.

Instead of each person having one job as they might in a traditional organizational structure, Holacracy embraces roles that are defined around the work. Tim explained how these roles are updated regularly, and people fill several roles across the organization.

Role descriptions are constantly updated by the team that is actually doing the work. Because roles are not directly tied to the people filling them, employees can hand off work (or their roles) and take on or reduce work much more easily. “Instead of having a bunch of work dumped into their lap as soon as one manager leaves the organization, you would not have that situation with Holacracy,” Tim explained.

Looked at another way, Holacracy encourages making the implicit explicit. The structure helps to make work visible to all, and helps workers behave more like entrepreneurs.

Hearing how this structure could give employees a better tool set to grow over time, the other leaders agreed, and said they were willing to give it a try.

Intrust IT had already implemented open book management and the Great Game of Business (and they are on their way to becoming an ESOP), and this seemed like a natural next step for empowering employees to behave like owners.

“Open book management allows our employees to have visibility and influence on the flow of money through the organization. And Holacracy, to me, does the same thing, only on the work side: it’s a way for employees to understand and influence the flow of work through the company,” says Tim.

Today, open book management and applying Holacracy have both helped Tim “get out of the way” as a leader . Instead of waiting for top leadership to make changes in terms of how work gets done, or who does what work, employees are equipped to take initiative and enact change. “They can now see what is going on and make recommendations and make changes themselves, instead of waiting to sell that up into the organization.”

“I want employees to have ownership and control in the organization,” adds Tim, “and this approach to growing leaders allows us to do that.”

This is part one in a two-part series with Tim Rettig of Intrust IT.

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