Blog Posts Governance, Risk, Compliance (GRC)

The Hell of Holacracy (for some die hards)

Blog: Customer Experience Management

In the recent post about Zappos and Googles innovative approach to doing business we themed ‘Holacracy’. Talk about push back from the traditional command and control types labeling the approach as ‘pulp science’.

Try telling that to some of the most successful companies on the planet…

Origins of Holacracy(with credits to wiki)

The Holacracy system was incubated at Ternary Software, an Exton, Pennsylvania, company that was noted for experimenting with more democratic forms of organizational governance. Ternary founder Brian Robertson distilled the best practices into an organizational system that became known as Holacracy in 2007. Robertson later developed the Holocarcy Constitution  in 2010, which lays out the core principles and practices of the system, and has supported companies in adopting it.

The term holacracy is derived from the term holarchy, coined by Arthur Koestler in his 1967 book The Ghost in the Machine. A holarchy is composed of holons (Greek: ὅλον, holon neuter form of ὅλος, holos “whole”) or units that are autonomous and self-reliant, but also dependent on the greater whole of which they are part. Thus a holarchy is a hierarchy of self-regulating holons that function both as autonomous wholes and as dependent parts.

Here’s the video from the author of the book (July 2015)


Influences and comparable systems

Holacracy has been compared to sociocracy, a system of governance developed in the second half of the twentieth century. Sociocracy had a significant early influence during the incubation of Holacracy, though Holacracy has increasingly differentiated away from it since then.Sociocracy particularly inspired the development of the circle structure and governance processes (described in more detail later) within Holacracy. Holacracy is designed for organizations and fundamentally differentiates the roles of the organization from the people working in it.
In its emphasis on iterative governance, adaptive processes, and self-organization, Holacracy draws inspiration from agile software development principles and the lean manufacturing process. Holacracy is highly compatible with stakeholder theory as its board structure allows for multiple stakeholders to be represented in the governance of an organization and for multiple organizations with shared interests to be linked at the governance level.

Essential elements

Roles instead of job descriptions

The building blocks of Holacracy’s organizational structure are roles. Holacracy distinguishes between roles and the people who fill them, as one individual can hold multiple roles at any given time. A role is not a job description; its definition follows a clear format including a name, a purpose, optional “domains” to control, and accountabilities, which are ongoing activities to perform. Roles are defined by each circle —or team— via a collective governance process, and are updated regularly in order to adapt to the ever-evolving needs of the organization.

Circle structure

Holacracy structures the various roles in an organization in a system of self-organizing (but not self-directed) circles. Circles are organized hierarchically, and each circle is assigned a clear purpose and accountabilities by its broader circle. However, each circle has the authority to self-organize internally to best achieve its goals. Circles conduct their own governance meetings, assign members to fill roles, and take responsibility for carrying out work within their domain of authority. Circles are connected by two roles known as “lead link” and “rep link”, which sit in the meetings of both their circle and the broader circle to ensure alignment with the broader organization’s mission and strategy.

Governance process

Each circle uses a defined governance process to create and regularly update its own roles and policies. Holacracy specifies a structured process known as “integrative decision making” for proposing changes in governance and amending or objecting to proposals. This is not a consensus-based system, not even a consent-based system, but one that integrates relevant input from all parties and ensures that the proposed changes and objections to those changes are anchored in the roles’ needs (and through them, the organization’s needs), rather than people’s preferences or ego.

Operational process

Holacracy specifies processes for aligning teams around operational needs, and requires that each member of a circle fulfill certain duties in order to work efficiently and effectively together. In contrast to the governance process, which is collective and integrative, each member filling a role has a lot of autonomy and authority to make decisions on how to best achieve his or her goals. Some have described the authority paradigm in Holacracy as completely opposite to the one of the traditional management hierarchy; instead of needing permission to act or innovate, Holacracy gives blanket authority to take any action needed to perform the work of the roles, unless it is restricted via policies in governance or it involves spending some assets of the organization (money, intellectual property, etc.)[14][15] Holacracy is thus highly biased toward action and innovation: it defaults to autonomy and freedom, then uses internal processes to limit that autonomy when its use in a specific way turns out to be detrimental.
Holacracy specifies a tactical meeting process that every circle goes through usually on a weekly basis. This process includes different phases to report on relevant data, share updates on projects, and open discussions where any circle member can add to the agenda. A particular feature of this last phase, known as “triage”, is to focus discussions on the concrete next steps needed by the individual who added the agenda item to address his or her issue.  The intention is to avoid large, unproductive discussions dominated by the louder voices.


Could you thrive in an holacracy?

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