The Circular Organisation

Post Tag:
Circular Organisation,Conscious Business,Leadership

A Paradigm for the Future of Work

Introduction

The traditional, hierarchical model of organisational structure, a legacy of the industrial revolution and thinkers like Adam Smith, is increasingly proving inadequate for the complexities of the 21st-century business landscape. Characterised by top-down command, siloed departments, and rigid communication channels, and a culture of the staff serving management, this model often stifles the very agility, innovation, and engagement required to thrive in a volatile, technology-driven world. In response, the need and demand new paradigm is emerging, conceptualised here as the Circular Organisation. This model, inspired by the philosophies of The Alchemy Experience, re-envisions the organisation as a dynamic, living system where energy, information, and talent flow freely, guided by a shared purpose rather than a rigid chain of command. It is a structure designed for adaptability, resilience, and the full expression of human potential.

In this article we explore the Circular Organisation from multiple perspectives, drawing on contemporary management theories, case studies of pioneering companies, and insights from developmental psychology and consciousness studies. We will argue that this model is not merely a structural alternative but a necessary evolutionary step for organisations to align with a rapidly changing technological, and disruptive environment and the rising collective consciousness of the global workforce.

From Hierarchy to Holarchy: Deconstructing the Old Paradigm

The conventional organisational pyramid, with its clear lines of authority and division of labour, was optimised for efficiency and predictability in a stable industrial economy, mimicking the production efficiencies pioneered by Henry Ford in 1913. However, in today’s fast-paced digital landscape, its weaknesses have become glaringly apparent. As noted in the article I wrote a few years ago when I first started to put these ideas on paper, this structure creates a dynamic where “energy flows up and down, but the quality of the energy in either direction is different,” leading to a lack of collaboration, empowerment, and genuine innovation [1]. Communication becomes a slow, filtered game of telephone, and decision-making is concentrated at the top, lacking in grounding and timeliness, far removed from the employees who interact directly with customers and the market.

This model also creates a dysfunctional career progression system. It often promotes individuals based on technical proficiency into management roles for which they may have little aptitude, training, or interest, beyond the notional success metric they subscribe to due to our societal programming, removing the best performers from where they create the most value [1]. This perpetuates a cycle of managers who administer people instead of bringing the best out of them, leading to disengaged teams. The result is an organisation that is slow to adapt and respond, resistant to change, and fails to harness the full creative and intellectual capacity of its people. However, draining the Human Energy Capital as if it was a resource.

The Circular Organisation proposes a fundamental shift from this rigid hierarchy to a more fluid, interconnected network—a holarchy. In this model, authority and decision-making are distributed, and the structure is composed of autonomous, self-organising teams (or “circles”), called ‘Holons’, oriented around specific functions or projects. This concept finds parallels in established frameworks like Holacracy, a term coined by Arthur Koestler. It is a system of self-management that replaces the traditional management hierarchy with a peer-to-peer operating system [2]. While implementations have had mixed success, as seen in the case of Zappos, the core principles of distributed authority and role-based work are central to the circular model [3].

Feature	Traditional Hierarchy	Circular Organisation
Structure	Pyramid, top-down	Network of interconnected circles
Authority	Concentrated at the top	Distributed to teams and roles
Communication	Formal, vertical channels	Open, multi-directional flow
Decision-Making	Centralised	Decentralised, close to the work
Focus	Command and control	Empowerment and collaboration
Agility	Low, resistant to change	High, designed for adaptation

The Engine of the Circular Organisation: Data, Purpose, and People

The Circular Organisation is built on three pillars that work in synergy: a data-driven core, a unifying purpose, and an empowered workforce.

Data as the Central Nervous System

At the heart of the Circular Organisation Chart is Data. In the Circular Organisation, data is not a tool for top-down control but the central nervous system that informs and connects all parts of the system. Internal and external dashboards provide real-time feedback loops, allowing teams to make informed decisions autonomously. This aligns with the principles of Exponential Organizations (ExOs), which leverage data, algorithms, and new technologies to achieve performance that is at least ten times better than their peers [4]. By democratising access to information, the organisation empowers individuals at all levels to act as sensors, responding to market shifts and customer needs with unprecedented speed and accuracy.

Purpose as the Guiding Star

If data is the nervous system, purpose is the organisation’s soul. A compelling, shared purpose acts as the guiding star, aligning the actions of every individual and team without the need for micromanagement. This concept is central to the rise of purpose-driven organisations, which consistently outperform their competitors in talent retention and customer loyalty [5]. The article advocates for a shift from a Unique Selling Proposition (USP) to a Unique Passion Proposition (UPP), where the organisation’s core passion and values are the primary drivers of its strategy and communication [1]. This resonates deeply with a workforce, particularly millennials and Gen Z, that increasingly seeks meaning and alignment with their personal values in their professional lives.

People as Empowered Agents

The Circular Organisation thrives by unlocking the full potential of its people. It moves beyond the outdated manager-subordinate dynamic to a model of coaching and mentorship. This is supported by Self-Determination Theory (SDT), which posits that human beings have three innate psychological needs: autonomy (the need to feel in control of one’s own behaviours and goals), competence (the need to gain mastery of tasks and learn different skills), and relatedness (the need to experience a sense of belonging and attachment to other people) [6].

The circular model is explicitly designed to meet these needs. Temporary committees and project-based teams, as suggested in the diagram, provide opportunities for individuals to develop new skills and move between states of challenge and mastery. It allows for teams to upskill in a variety of different areas of the business, and all staff to be fully connected across all functions bringing with them, to their specialities, an understanding and sensitivity to how their function affects and integrates with the whole. Central to the idea of fulfilment and contentment is to be in flow, which requires, according to the originator of the concept Mihaly Csikszentmihalyi [7], that people are in constant motion between challenge and mastery..

Leadership in the New Paradigm: The Leader as Healer

Leadership in the Circular Organisation is fundamentally different. It is not about command but about cultivation. The concept of “Leader as Healer”, from a leadership style rooted in empathy, self-awareness, and the empowerment of others [1], conceived by Nicholas Janni. This aligns with the growing body of research on Compassionate Leadership and Emotional Intelligence (EI).

Leaders with high emotional intelligence are more effective at coaching teams, managing stress, and fostering collaboration [8]. Compassionate leadership, defined by a focus on listening, understanding, empathising with, and supporting people, has been shown to improve psychological safety, team performance, and employee engagement [9]. In the circular model, leaders are not appointed from above but are often chosen by their teams, earning respect through their ability to nurture growth and well-being. Their primary role is to coach, remove obstacles, and ensure the team has the resources and psychological safety it needs to succeed.

Aligning with the Technological and Conscious Evolution

The shift towards the Circular Organisation is not occurring in a vacuum. It is a direct response to and a reflection of two powerful macro-trends: the acceleration of technology and the evolution of human consciousness.

The Technological Environment

The digital revolution has created a business environment that is volatile, uncertain, complex, and ambiguous (VUCA). In this context, organisational agility is no longer a competitive advantage but a survival imperative [10]. The Circular Organisation, with its decentralised structure and rapid information flows, is inherently more agile than its hierarchical counterpart. It can sense and respond to change more quickly, experiment with new ideas, and scale innovations rapidly. The model mirrors the distributed, networked nature of the very technologies that are reshaping our world, from the internet to blockchain and AI.

Case studies like the Spotify model, with its autonomous “squads,” “tribes,” “chapters,” and “guilds,” demonstrate how a non-hierarchical, agile structure can foster innovation and speed at scale, even if the model itself is more of a guiding philosophy than a rigid framework [11].

The Evolution of Human Consciousness

Simultaneously, we are witnessing a shift in human consciousness. Theories like Integral Theory and Spiral Dynamics describe a developmental progression of human consciousness, moving from egocentric to ethnocentric to world-centric stages of awareness [12]. As more individuals move into higher stages of development, they seek more from their work than just a pay check. They seek purpose, autonomy, and the opportunity to contribute to something larger than themselves.

The Circular Organisation is a structure that is uniquely suited to this evolving consciousness. It creates an environment where individuals can bring their whole selves to work, where their intrinsic motivations are honoured, and where the organisation itself can be seen as a vehicle for collective growth and positive impact. It moves the organisation from a machine metaphor to a living systems metaphor, a conscious entity with its own purpose and will to succeed [13].

Conclusion: The Future is Circular

The Circular Organisation is more than just a new organisational chart; it is a new philosophy of work. It is a response to the limitations of an outdated industrial-era model and an embrace of the possibilities of a networked, purpose-driven, and conscious future. By placing data at its core, guiding itself with a clear purpose, and empowering its people through a culture of trust and distributed authority, the Circular Organisation creates a resilient, adaptive, and deeply human system.

While the transition from a traditional hierarchy is not without its challenges, as the journey of companies like Zappos shows, the principles of the circular model offer a compelling path forward. It is a paradigm that aligns organisational structure with the demands of the modern technological environment and the deepest needs of the human spirit. For leaders looking to build organisations that are not only successful but also sustainable and meaningful, the future is circular.