I've always expected every member of my team to contribute ideas and drive innovation. Recently, I made this official by making elements of a little-known (and infrequently used) management style called "holacracy" permanent parts of how we do things at LexION Capital.

What is holacracy? It's a system in which authority is distributed throughout teams. This flies in the face of the traditional, top-down management hierarchy, and that's a good thing. Here's why.

Every person in a company should be invested in its future

In the best organizations, everyone has a sense of responsibility for their work. This is easier when roles are well defined, yet flexible enough to allow them to be performed from different angles -- leader, facilitator, or representative. This encourages work in the broad context of shared goals, not in the one-dimensional framework of a job description.

Project managers will still decide best courses of action, but never without robust input from the team. Everyone pitches in and no one can block a good idea, so it creates an atmosphere where people feel engaged with the project at hand. It also makes people stop saying "that's not my job," and gets them to say "this is my company" instead.

The entrepreneur's dilemma

As you grow, you have to let go. You have to decide when to delegate, what to delegate, and who to delegate it to. Self-managing teams will help solve a lot of that for you.

Keep in mind that "self-managing" isn't the same as "not managed." Specific people are still accountable for specific tasks, but accountability is based on who can best see the project through, not on a management hierarchy. Expectations for leadership, deliverables, and deadlines are still as clear as ever, so nothing can fall through the cracks.

Use the best ideas from an entire team

At LexION, self-management is part of a larger process that includes asking questions and proposing improvements. Representatives from other departments regularly sit in on meetings to offer outside perspectives and help refine our processes.

By sourcing innovative thinking from every part of the company, processing is fast and the best thinking is generated in real time. We don't implement an idea and wait around to see what happens, we get the full spectrum of feedback before deciding on the best move, then proceed with an idea that embodies the entire team's best thinking.

About that Zappos memo...

One of the biggest challenges with holacracy is getting everyone on board with the cultural shift that it causes.

It's a leap of faith for most people who come from the corporate world, as evidenced by the well-known Zappos memo which suggested that employees get on board with its transition to a holacratic management system, or find the nearest exit.

LexION is a rapidly growing firm, and our fast-paced workflow helped set the stage for a smooth transition to self-management as our team is used to constant evolution. But if full implementation for your business isn't in the cards just yet, maybe only certain departments need to try it to start, while others learn certain aspects of holacratic principles. If Whole Foods can do it across its more than 350 locations, you can too.

Entrepreneurs trade in leaps of faith. If you make this one, a happier, healthier and more innovative organization can emerge.

Published on: May 8, 2015
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