What is adhocracy culture?

Adhocracy culture within a business setting describes a decentralized leadership structure, organic decision making, and individual initiative. Adhocracy is an alternative to the rules and hierarchy of bureaucracy as it permits employees to solve problems as they see fit, meaning they don’t have to rely on authoritative leadership and procedures. Adhocracy culture is one of the four most common company cultures, which are:

• Clan culture: Employees typically see themselves as a team player and actively value collaboration.
• Market culture: Is more open and aggressive about pursuing market targets rather than focusing on indirect profitable projects.
• Hierarchy culture: Generally has strict control by leadership, although most companies require some hierarchy to function at their best.
• Adhocracy culture: Values innovation and risk taking with the creativity and freedom to err.

Read more: The Secret to Improve Company Culture: Effective Workplace Communication

Adhocracy culture’s key characteristics

In a meritocracy, employees use data to make decisions, and in a bureaucracy, they turn to leadership. In an adhocracy, there are no right or wrong answers. Companies that foster an adhocracy culture have a flexible work environment, encouraging employees to experiment and try new ideas and use feedback to make adjustments and analyze results. Here are some key characteristics of adhocracy culture:

• Flexibility: Employees with adaptive mindsets can change direction quickly and form specialized teams to tackle arising challenges to keep pace with an ever-changing business climate.
• Individual initiative: With shared leadership, employees can easily step into projects suited to their skills. They’re encouraged to self-organize and think creatively to solve problems without a supervisor’s permission.
• Informal atmosphere: Along with the freedom to implement their ideas, employees within an adhocracy culture have more power to decide how and when a job gets done. There’s also less formality regarding expectations, roles, and procedures, which suits freelance workers well.
• Innovation and risk-taking: Experimentation and creativity stimulate new methods and promote continuous innovation of products and services. Your team learns from taking risks, making mistakes, and course-correcting until they get it right.
• Reactive structure: Puts less emphasis on planning and more on allowing team members to collaborate swiftly and take necessary action without waiting for authorization. Decisions are more reactive than proactive when employees or management can change direction at a moment’s notice.

Related: 35 Company Values to Consider for Your Business

Adhocracy culture advantages

An adhocracy culture can appeal more to certain businesses than traditional cultural models, especially in industries dealing with unpredictability, where cutting-edge technology replaces or upgrades products regularly or trending markets constantly evolve into something different. Below are some advantages of having an adhocracy culture:

• Quick decision making: When customers need immediate assistance or market demands shift rapidly, there may be no time for lengthy analysis or waiting for supervisor approval. Your employees can act on instinct and make quick decisions to solve problems or create better outcomes.
• Adaptability: Adjusting project strategies based on changes to external or internal conditions can keep you ahead of your competition. Not categorizing your employees into a single role allows them to step in and out of different activities as necessary.
• Relaxed social behaviour promotes innovative creativity: A decentralized leadership structure makes it easier for employees to collaborate, interact, and socialize with colleagues. With less pressure, employees typically feel more comfortable speaking out, sharing opinions, and suggesting problem-solving solutions.
• Empowered workforce: An adhocracy culture empowers employees to have more control over their careers since nothing confines them to a formal structure. Their work and the work of others are more visible and transparent, allowing them to see different opportunities and be free to change roles.

Read more: 10 Culture Fit Interview Questions to Ask Your Candidates

Adhocracy culture disadvantages

An adhocracy culture doesn’t suit every business type. Industries that follow strict protocols can’t function without prescribed processes and designed procedures. Below are some limitations and disadvantages of an adhocracy culture:

• Possible communication failures: There can be some confusion with emphasis on individual initiatives and the lack of structure on how things work. Your employees may not know where to get and direct information or fully understand who handles certain situations. A lack of effective communication risks lost information, unnoticed delays, and duplicate work.
• Unpredictable environment: Freedom and a relaxed structure may kindle creativity, but some people can feel lost or uncomfortable in a constantly changing environment. Some employees may need help understanding their responsibilities or knowing if their performance is satisfactory. It may also be unclear who to turn to for guidance or interpersonal conflicts. This laid-back culture can impact timelines, deadlines, and quality control.
• Risk: All company cultures have the risk of failure, and prepared organizations can tolerate this. However, spontaneous decision making that ignores risk management or market research can end up squandering your company’s money. Adhocracy is a reactionary culture, which is always a risk, but being proactive with mitigation solutions can prepare you to act with less chance of failure.
• Recruitment challenge: Finding new recruits to fit the adhocracy culture can be challenging as applicants who crave stability, structure, and routine may be weaker candidates. Those just starting their careers may need more experience or skills to work in fast-paced conditions with little or no supervision, narrowing the options even further.

Related: How to Find Good Employees

Adhocracy culture examples

Modern companies promote their brand alongside their service or products. With the adhocracy culture, many businesses find it easier to branch out into other sectors to upgrade or develop new, bigger, and better ideas. Some well-known companies who take advantage of this adhocratic business style include:

Wikipedia

Wikipedia doesn’t have a bureaucracy or hierarchy. Instead, they have a few full-time staff members of the Wikimedia Foundation who run the business.

NASA

The National Aeronautics and Space Administration is an early example of an adhocracy culture. Their goal was to land on the moon, and they had a timeframe to achieve it. They succeeded through adaptability, flexibility, and quick decision making.

Spotify

Spotify has inspired other companies to model their business strategies and culture. They use small cross-functional teams called squads to handle all parts of the business. These squads have the creative freedom to complete their mission in a manner they find most effective.

Please note that none of the companies, institutions, or organizations mentioned in this article are affiliated with Indeed.

Read more: Organizational Culture: Importance and Types

How to foster an adhocracy culture

Regardless if your company is a full-fledged adhocracy or just adopts some of its principles to boost innovation and individual initiative, the following practices can help foster a stronger work environment:

Adapt the model to your company

You can leverage an adhocracy culture to suit your company’s needs and environment to achieve your goals. Not every organization does the same thing, so your methodologies will look different from others and may take a few attempts to get right.

Hire the right candidates

Many employers fail to define their company culture, so when they hire, they act only on instinct to determine if an applicant is a good match. Or, they may hire candidates who have similar demographics as their current staff with the assumption that they will be the right fit. This strategy can make you overlook promising applicants who don’t fit within these parameters.

Know your company culture and showcase it throughout your recruiting materials to target candidates who are self-guided, collaborative, and flexible and have a history of innovative practices.

Encourage and reward

Define and encourage the preferred behaviours and practices you want to see in your organization’s daily operations, then reward those who attempt them—even when they’re not entirely successful. When you support achievements and disappointments, you encourage your team to adopt the same mindset as their peers.

Promote cross-functional collaboration

Bringing your employees together to reflect and share new ideas can create an environment where knowledge-sharing naturally occurs to meet rising challenges. Cross-functional collaboration not only reduces costs, drives continuous improvement, and enables creative problem solving and agility, but it can keep your employees aligned with company objectives. Through collaboration and teamwork, employees can benefit from the collective knowledge base, prospering from expertise that wouldn’t normally be available to them. This larger knowledge pool allows them to avoid reinvention and overlapping work while boosting innovation.

Companies pulling ahead of their competition are learning that if you put the right people in the right jobs and allow them the freedom to feed off each other, you create opportunities that wouldn’t otherwise exist.