How it works
In a TBO, teams reach decisions
through brainstorming and mutual
agreement among team members,
rather than a senior management
member issuing orders from the top
down the chain of command as in a
traditional organizational structure.
Communication is less formal in
TBOs, often carried out on social
media such as blogs and forums
and using software for networking
such as Groupware.
One step beyond the team-based
structure is a holacracy (see box,
right), an unconventional type of
organization in which there are
no managers, and even the CEO
relinquishes power, allowing
employees to self-govern through
regular committee meetings,
which they organize themselves.
Team-based
structure
Team-based hierarchy
While TBOs still have a CEO, little other hierarchy exists. Team leaders are
part of the team rather than in a chain of command. At its best, a team-
based model fosters a culture of trust, so individuals take pride in their work
and responsibility for carrying out tasks well and on time and budget.
Cascading Successful passing
of information or objectives down
through the workforce
Lateral structure Decentralized
structure in which departments
work to a common goal
Flat lattice Structure with no
chains of command, in which
workers choose to follow leaders
NEED TO KNOW
As its name implies, a team-based organization (TBO) is made up
entirely of teams. Managers and staff from different departments join
to form teams handling specific projects, in the short or long term.
CEO
Team A Team B
Team
leader
Team
leader
$
US_076-077_Team-Based_Structure.indd 76 21/11/2014 16:38
76 77
how companies work
Corporate structure
HOLACRACY—BREAKING BOUNDARIES
Staff are grouped into teams that set their own roles and goals and choose
their own leaders. The idea is that if power and responsibility are shared,
employees will give their very best. In 2014, the Las Vegas–based online
clothing retailer Zappos adopted the model for its 1,500 staff. Holacracy
is a trademarked term used by the company that invented this specific
management system. It follows the same principle as a flat lattice, but takes
the idea one step further by presenting a comprehensive management
structure with clear processes for internal operations and governance.
HOLACRACY—A STRUCTURE OF
SELF-MANAGED TEAMS
200–
300%
the productivity
increase at US
sausage-maker
Johnsonville
Foods, from
1982 to 1990, by
moving to a team-
based structure
TEAM-BASED: PROS
AND CONS
Pros
Quick decision-making and
rapid response to problems
and challenges
Reduced overheads because there
is no heavy management structure
Open communication because there
is no fear of management reaction
Cons
If staff lack expertise, decisions
may be flawed
Limited sharing between teams
may affect business performance
Decisions by consensus harder
to reach
Decision-
making by
committee
TRADITIONAL
HIERARCHY
Decisions
handed
down
from top
Team
leader
Team C
$
US_076-077_Team-Based_Structure.indd 77 21/11/2014 16:38
76 77
how companies work
Corporate structure
HOLACRACY—BREAKING BOUNDARIES
Staff are grouped into teams that set their own roles and goals and choose
their own leaders. The idea is that if power and responsibility are shared,
employees will give their very best. In 2014, the Las Vegas–based online
clothing retailer Zappos adopted the model for its 1,500 staff. Holacracy
is a trademarked term used by the company that invented this specific
management system. It follows the same principle as a flat lattice, but takes
the idea one step further by presenting a comprehensive management
structure with clear processes for internal operations and governance.
HOLACRACY—A STRUCTURE OF
SELF-MANAGED TEAMS
200–
300%
the productivity
increase at US
sausage-maker
Johnsonville
Foods, from
1982 to 1990, by
moving to a team-
based structure
TEAM-BASED: PROS
AND CONS
Pros
Quick decision-making and
rapid response to problems
and challenges
Reduced overheads because there
is no heavy management structure
Open communication because there
is no fear of management reaction
Cons
If staff lack expertise, decisions
may be flawed
Limited sharing between teams
may affect business performance
Decisions by consensus harder
to reach
Decision-
making by
committee
TRADITIONAL
HIERARCHY
Decisions
handed
down
from top
Team
leader
Team C
$
US_076-077_Team-Based_Structure.indd 77 21/11/2014 16:38
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