Return-to-office edicts and AI-fueled product sprints are pushing power back up the org chart. At the same time, many employees want autonomy and networked decision making. The question is no longer whether hierarchy is good or bad. It is when a network beats a boss, and when a boss still earns their keep.
What self-management actually promises
Self-managing organizations decentralize authority radically and systematically, eliminating the classic manager–subordinate relationship across the enterprise (Lee and Edmondson, 2017). That move is not cosmetic. It changes who decides, how coordination happens, and where accountability sits. In their synthesis of the management literature, Lee and Edmondson conclude that managerial hierarchy is well suited to reliable execution of known tasks in stable environments. The same apparatus tends to inhibit complex, cross-boundary problem solving, drift toward rigidity, and reinforce status differences that stunt people’s development (Lee and Edmondson, 2017). Those are the very frictions leaders complain about when innovation slows or collaboration stalls.
The promise is real, but so are the limits. Lee and Edmondson are explicit that evidence for enterprise-wide self-management remains thin relative to its ambitions. Their review is a theory-driven synthesis, not a randomized test, which makes it a solid map of mechanisms rather than settled proof of outcomes (Lee and Edmondson, 2017).
Field notes from the flat frontier
The most famous modern experiment with bossless management was Zappos. By 2016 it was the largest firm to adopt Holacracy in full, which made it the reference case for observers on both sides of the debate (Bernstein, Bunch, Canner and Lee, 2016). The debate itself had already polarized. Advocates celebrated “no bosses,” critics dismissed the idea as naïve. Bernstein and colleagues argued for a middle view: focus on the real promise and the real trade-offs rather than the slogans (Bernstein, Bunch, Canner and Lee, 2016).
The next chapter was less romantic. In 2015, CEO Tony Hsieh issued an ultimatum to fully commit to Holacracy or take a buyout. Eighteen percent of the workforce opted to leave (Groth, 2020). Over the following years the company quietly pulled back. It killed off Holacracy’s bureaucratic rituals, brought managers back, and in 2017 replaced the model with an internal market where teams operated like small businesses with their own P&Ls, pricing services to one another. Leaders cited significant business metric challenges and a critique that Holacracy had become too inward focused (Groth, 2020). Zappos did not abandon experimentation. It changed the operating system to reintroduce clearer lines of accountability and market-like discipline.
Technology offers a second cautionary tale. Valve popularized the image of a truly flat company, yet its experience shows how power often resurfaces informally. Valve’s bossless design produced what insiders called “The Wilderness” by 2013, a period of creative inertia. Even the celebrated Half-Life: Alyx required explicit management intervention to move forward, a striking fact in a firm that prided itself on no managers. The choice to preserve flatness also meant no dedicated customer support or marketing departments, with predictable gaps in execution (Foss and Klein, 2022). Foss and Klein argue that flat or “bossless” organizations can work under stable conditions, but in dynamic, time-sensitive environments they tend to struggle with innovation, scale, and longevity (Foss and Klein, 2022).
The hierarchy that hides in “bossless” firms
Even when titles disappear, authority does not. Many firms that brand themselves flat retain real bosses and hierarchies, they are simply informal or renamed. Formal hierarchy is replaced by informal hierarchy rather than eliminated. That swap can make power more opaque and accountability fuzzier, the worst of both worlds when decisions must be fast and consequential (Foss and Klein, 2022).
This is where a contingent view of management helps. Strategy+business, reporting on Nicolai Foss and Peter Klein’s book, notes that near-bossless firms do not consistently outperform traditionally organized peers, and that such models are rare. The authors argue managers matter in concrete functions: to design, organize, encourage, and enforce. They distinguish between two types of authority. “Mark I” covers the hard rights to hire, fire, and instruct. “Mark II” is the softer system-design, leadership, and consensus work that gives teams coherence. Their conclusion is deliberately non-utopian. There is no universal best structure, only better fits for context and task (strategy+business, 2022).
A practical design for power
The lesson from these cases and syntheses is not to give up on networks. It is to make power design explicit.
- Choose the unit of autonomy based on problem type. If work is exploratory, cross-functional, and benefits from lateral recombination, create self-managing teams with clear domains and shared protocols. This is the zone where Lee and Edmondson see hierarchy’s weaknesses and networked autonomy’s potential (Lee and Edmondson, 2017).
- Make authority legible. If you remove managers, specify who can decide what, on what cadence, with what constraints. Otherwise informal bosses fill the vacuum and you inherit the opacity Foss and Klein document (Foss and Klein, 2022).
- Protect speed for time-sensitive bets. When the clock matters, assign “Mark I” rights for a bounded period. That scaffolding prevents the drift and indecision seen in flat settings under pressure, and it respects the managerial functions that strategy+business highlights (strategy+business, 2022).
- Use market mechanisms where they clarify trade-offs, not as ideology. Zappos’ shift to team P&Ls aimed to surface costs and priorities that Holacracy had obscured. The point was accountability to customer and firm outcomes, not purity of form (Groth, 2020).
- Audit the cost of ceremony. If the rituals of self-management consume time without improving coordination, simplify. Zappos’ decision to eliminate Holacracy’s more bureaucratic meetings is a caution against process for its own sake (Groth, 2020).
The contemporary frame is unforgiving. Product cycles compress, talent markets stay fluid, and coordination spans functions and time zones. In that world, hierarchy remains the best tool for reliable execution of known work. Networks excel where problems are novel and interdependent. The mistake is to canonize either. Leaders who treat structure as a design variable, run bounded trials, and make authority visible will move faster than those who toggle between slogans.
The close-to-ground read is simple. Flatten where learning depends on lateral collaboration. Reinforce where speed and accountability are at risk. Then keep score on customer results, not the elegance of the org chart.
Sources
- Lee and Edmondson (2017). Self-managing organizations: Exploring the limits of less-hierarchical organizing. Defines SMOs and synthesizes when hierarchy helps or hinders, grounding the case for contingent authority. https://www.sciencedirect.com/science/article/abs/pii/S0191308517300059
- Bernstein, Bunch, Canner and Lee (2016). Beyond the Holacracy Hype, Harvard Business Review. Describes Zappos as the largest full Holacracy adopter in 2016 and argues for a balanced view of self-management debates. https://hbr.org/2016/07/beyond-the-holacracy-hype
- Foss and Klein (2022). Who's the boss? The persistence of entrepreneurial hierarchy in flat organizations, Journal of Organization Design. Shows how flat firms retain informal hierarchy and struggle under dynamic, time-sensitive conditions, including the Valve case. https://link.springer.com/article/10.1007/s41469-022-00132-8
- strategy+business (2022). Can bossless management work?. Reports Foss and Klein’s argument that near-bossless firms do not generally outperform, distinguishes types of managerial authority, and stresses contingency. https://www.strategy-business.com/article/Can-bossless-management-work
- Groth (2020). Zappos has quietly backed away from holacracy, Quartz. Documents the 2015 ultimatum with 18% buyouts, the rollback of Holacracy rituals, return of managers, and the 2017 shift to an internal market model. https://qz.com/work/1776841/zappos-has-quietly-backed-away-from-holacracy