These are the questions currently facing the shoemaking company Zappos, which is transitioning to a new company hierarchy and saying goodbye to 14 percent of its staff as a result. Nobody is getting fired, but 210 employees out of 1,503 have opted to receive a few months pay and leave the company rather than stick around for its experiment in autonomous management.
The new system is called Holacracy and it's a difficult concept to get your head around. What at first glance might seem like a hippy-dippy approach to collective decision-making, achieved by abolishing managers and job titles, is anything but.
Instead of a job title, each worker has a "role" that changes according to the needs of the organization. There are "circles" composed of people who congregate for meetings, and those circles are overseen by circles above them, which have the authority to absolve or reassign its members.
It all gets to sounding like a Settlers of Catan game and the high-paid consultants who change companies over to Holacracy explain from the outset that it takes an average of five years to make the transition. For further reading, see the Holacracy Constitution. The promise of the new structure is more flexibility, quicker decision-making, and freeing talented individuals to make changes on their own authority rather than waiting for consensus.
In theory, most companies' current system of managers and underlings is better suited to England's Industrial Revolution, when individuals could reliably repeat the same tasks day in and day out. But industry changes faster today, and relying on managers to know everything and chart the course of an entire company is impractical. If you've ever worked at a big company, you know this all too well.
Here's a video explaining the basics of Holacracy: