Dick Grote: “Rank and Yank” Apologist Disagrees with Holacracy. Why? Holacracy Eliminates the Management Class

In a Bloomberg BNA article, “Is a Manager-Free Company a Good Idea?” Dick Grote, the creator of a management-focused and -dependent forced-ranking system (also known as “rank and yank), disagreed with the implementation of holacracy. (Of course, the success of holacracy means the end of the management class; employees will govern themselves.) What was delightful to experience in reading this Grote quote (below) is the wish for Grote to save managers’ jobs while relishing in the deliverance of abusive treatment and pink slips to rank-and-file employees.

“I think there’s a core flaw in the concept” of holacracy, Dick Grote, founder of performance management consultancy Grote Consulting Corp. in Frisco, Texas, said in a Feb. 16 interview with Bloomberg BNA. “The flaw is the abandonment of a structure, hierarchical management, that has worked for thousands of years.” He cited figures as diverse as Moses and Julius Caesar and organizations like the Catholic Church as examples of successful use of hierarchy.

“There are bumps in the process, but there is nothing that has come along that beats hierarchical structure,” Grote said. Experiments like Zappos are “like trying to put 1800s Shakers into modern corporate culture,” he said.

Moreover, Grote said, employees are terrible judges of their own performance and need immediate supervisors for a realistic performance appraisal. All employees want to know “one, what do you expect of me, and two, how am I doing at meeting your expectations? Organizations have an ethical obligation to answer those questions,” Grote said. “Holacracy removes the ability to give that to people.”


Artist: michael sloan


Grote’s system bolsters and magnifies management power. However, should the employee be expected to self-manage their tasks, management power is reduced. Likely, there would need to be a systems coordinator, but, definitely, the number of managers would be sharply reduced.

How interesting that Grote is so fast to fire employees, but at the same time is protective of management positions. What a juxtaposition! Yet another example of the total failure of the rank and yank system.