Holacracy™ is a comprehensive practice for governing and running our organizations - a new organizational operating system. Its transformative structure and processes integrate the collective wisdom throughout a company, while aligning the organization with its broader purpose and a more organic way of operating. The result is dramatically increased agility, transparency, innovation, and accountability.
HolacracyOne was founded in early 2007 to help the emerging Holacracy™ practice continue its evolution and expand its reach and impact in the world. Holacracy is a new organizational operating system that was initially pioneered hands-on in an award-winning, fast-growth software company between 2001 and 2006. The company’s leadership continually experimented with new methods of organizing and working together, while integrating ideas and techniques from many cutting-edge movements and thought-leaders. The resulting system made its public debut in 2006 via interviews and writings, including a prominent article in the Wall Street Journal. HolacracyOne took that initial rough system and matured it into a thorough and complete operating system and novel authority structure, and packaged it for consumption by other organizations. It is now an international movement with a broad community of practitioners and consultants catalyzing its adoption across the globe.
Over the past two decades, dozens of thought-leaders have pointed the way to new capacities organizations must develop to thrive amidst our 21st century challenges. Peter Senge highlights the need for systems thinking and learning organizations. Gary Hamel describes radically new management methods. Meg Wheatley calls for self-organization and a living systems mindset. And Jim Collins shows the impact of leaders who get their ego out of the way. These visionaries and many more are highlighting the limits of our conventional views of organization and leadership, and offering a glimpse of new possibilities available to us – if we’re able to make the leap.
Further, many novel organizational practices have emerged in recent decades that are aligned with the shift to a more dynamic organization. They are expressions of a new paradigm actively emerging, and challenge our conventional views of how an organization is structured and controlled. Yet, despite the power of so many next-generation practices, they face a huge obstacle to their deployment: when they’re applied in an organization that’s still grounded in a conventional approach, there’s a major paradigm clash. At best, the novel practice becomes just a “bolt-on” technique, something that affects just one aspect of the organization and remains in continual conflict with the other systems around it. At worst, the corporate antibodies come out and reject the bolted-on technique – a foreign entity that doesn’t quite fit with the way things are done around here. Either way, the novel practice fails to realize its full potential, however promising.
This is a major challenge for anyone applying leading-edge ideas and techniques to conventional organizations. Despite the powerful new paradigm behind so many of these methods, it has proven difficult to realize whole-system change by applying isolated new practices within an old organizational paradigm. What to do about this is the leading-edge question in many leading-edge movements. How can we evolve organizations, when the evolutions we try to provide clash with the core paradigm at play and end up rejected?
To really achieve the promises of this emerging new paradigm, we must move beyond bolting-on changes, and instead transform the most foundational aspects of the organization’s design. We need an underlying operating system, a meta-framework, that encourages and evokes continual experimentation for continual evolution. Holacracy emerged in response to this need.
I will summarize Holacracy briefly, but a more in-depth write up is available here: Organization Evolved: Introducing Holacracy (Brian J. Robertson, 2009. http://www.holacracy.org/resources/organization-evolved). Holacracy is a complete system and there are a lot of moving parts, though I’ll try to summarize key pieces from the article here.
As MIX’ers well-know, most modern leadership and management techniques are based on a “predict-and-control” paradigm. This mindset asks those in leadership roles to anticipate and design the best path to achieve pre-defined goals in advance, and then control for any deviations to the prescribed plan. In today’s environment, steering an organization with predict-and-control methods is akin to riding a bicycle by pointing in the right direction, then holding the handlebars rigid and pedaling, eyes closed. Holacracy helps an organization find more dynamic methods for steering its work, to gradually shift the company from predict-and-control, to experiment-and-adapt, and finally to true sense-and-respond – what Holacracy calls “dynamic steering”.
In a sense, Holacracy is a sense-and-respond change engine, a whole operating system that supports continual surfacing and testing of innovations, or “hacks” in the MIX language, and embedding those that work – based on the real-world issues that an organization is facing in its day-to-day operations. From the article:
“Holacracy is a complete and practical system for evolving our fundamental approach to organization and management. It embeds dynamic steering principles into the core of the organization, and installs a more organic structure of semi-autonomous, self-organizing teams. It distributes governance across all teams, and adds bi-directional double-links to carry feedback and control across organizational layers. It distributes authority using an integrative decision-making process that gives everyone a voice, without the tyranny of consensus, while still allowing for autocratic control and individual action. It reframes operational processes around rapid action and dynamic responsiveness in tight feedback loops, with regular tactical meetings focused on quickly identifying next-actions and removing obstacles. And it aligns the organization around a larger evolutionary purpose beyond ego, anchored at the board level and then broken down and distributed throughout the company and its culture. Each aspect of Holacracy supports and is supported by the others. Taken together they offer not just an incremental improvement but a fundamental transformation, a vertical leap to a new tier of organization.”
In Holacracy, an organization’s structure is built of semi-autonomous “circles”, where each circle has a specific scope of work within the organization. Thus, a circle might wrap a specific project, product, department, business line, or a general function of the organization. Each circle has the autonomy and authority to define and evolve the roles, accountabilities, policies, and processes needed to organize and govern its operations in service of its purpose.
These circles are not fully independent of each other: they are organized together into a “holarchy” – a natural hierarchy of increasing scope. Thus, more broadly focused circles can encompass multiple sub-circles. For example, a department circle might include multiple team sub-circles, and multiple department circles might themselves integrate together in a yet-broader whole-company circle.
Each circle within this organizational holarchy is linked to its broader circle by two individuals who work within both connected circles. One of these links, called a “Lead Link”, is appointed by the broader circle to carry its needs to the sub-circle. The other half of this double-link, called a “Rep Link”, is elected by the sub-circle to represent the context of the sub-circle within the broader circle. Both links take part in the governance and operations of both connected circles. This double-linking structure continues throughout the organizational holarchy, one layer at a time, creating bidirectional pathways for alignment and feedback
Holacracy then provides a concrete governance process for each circle, at every level, to effectively self-organize and continually innovate. Governance is about how a team will structure itself and work together to achieve its aim – it’s about roles, accountabilities, policies, and processes. Governance decisions use Holacracy’s Integrative Decision-Making process to give everyone a voice and rapidly integrate multiple perspectives. However, this group process isn’t used to resolve tactical issues or to make specific operational decisions in the normal course of business. Integrative decision-making in Holacracy defines space for autocratic control and individual action in specific areas, along with appropriate boundaries on such control, so that execution can happen safely and swiftly without the need for a whole-group process. Whenever this delegation of authority needs updating, the team falls back on the integrative process to update its governance.
To truly steer dynamically, each circle also needs operational management and meeting practices that are fast, efficient, and lightweight. These must stay grounded in real data and next-actions to help everyone involved face reality at every moment and adapt rapidly. Holacracy provides an operational management system and a separate meeting process for a “tactical meeting” which helps shift each circle’s operations to Holacracy’s sense-and-respond paradigm.
To ground all of this in the formal structures at play, HolacracyOne has developed and published formal bylaws which establish Holacracy as an entity’s legally-enforceable governance system. Adopting them makes Holacracy’s unique board structure and purpose-driven paradigm a legal reality, not just an espoused ideal. It also encodes Holacracy’s organic structure, distributed governance, and integrative decision-making systems into the formal power structure of the company. With this in place, the formal seat of authority in the company shifts from the manager to the circle’s governance process – no longer does the manager have the authority to define authority, or to violate the self-organization process of each circle.
There are now a variety of companies running with Holacracy; see the “Benefits and Metrics” section for more about that.
Implementing Holacracy is subject to many of the same challenges as any other significant change management initiative, however there are some challenges that seem more specific to or more pronounced with Holacracy:
- Holacracy fundamentally changes the authority structure in an organization, both distributing authority throughout the company, and shifting the seat of authority from the management at each level to an integrative governance process. While many leaders find this frees them to do more powerful work in their own scope, and frees the organization to respond more dynamically to its environment, it is nonetheless an extremely difficult shift for many. There is an “ego-shock” that often results, and a lot of coaching may be necessary to help them learn how to lead within this new frame.
- Holacracy comes from a very different underlying paradigm than our modern norm, and reframes much of what we otherwise know about organizations today. People often interpret Holacracy within their existing frameworks and models – sometimes the paradigm shift is counter-intuitive, and people often have a hard time seeing how pieces of Holacracy will work, until they actually experience the whole system in practice. This is even more pronounced since Holacracy can overlay on the existing structure – it still sort of looks like a lizard with wings, until you become familiar with birds.
- Holacracy can be detoxifying, by surfacing issues that were otherwise hidden by politics or personal heroics; playing politics ultimately loses its effectiveness in light of Holacracy’s radically-transparent systems and new authority structure. While healthy, that surfacing and detoxifying process can be quite uncomfortable, even painful, and it will be disorienting at first. Support is often needed to help guide people through the transition process.
Adopting Holacracy is a huge shift for any organization and for the people within. We’ve learned a lot about these challenges and others from supporting organizations that have adopted Holacracy thus far, however there are still many unknowns and questions, and a lot more to learn.
There are currently 115 Certified Holacracy Practitioner’s across 6 continents, and 19 Licensed Holacracy Consulting Firms or firms on the path to becoming licensed. However, since most of the companies that have adopted Holacracy did so relatively recently, there are not many metrics available yet. There are a couple of graduate students planning research on Holacracy for their PhD work, and we look forward to seeing the results of more rigorous research and getting more data and case studies over time. In the meantime, below are a few anecdotal case-studies and the benefits reported:
Intermarché is a twenty year old supermarket located in Raches, France that currently employs about 50 people.
Online Interview: http://www.holacracy.org/downloads/CoP_Call_2010-10-08.mp3
“What I was very amazed by is how much energy that has come out of working with Holacracy and how much positivity, energy, and creativity is emerging. The minute we started implementing Holacracy, it started to happen.” - Anne Destombes, Store Owner
Reported benefits including:
- Increased employee collaboration, teamwork, empowerment, and creativity
- Improved shared, common vision and meaning in work
- Improved communication
- Improved desire to work
- Personal development
- Increased organizational agility and positive culture towards change
Emesa B.V. is a 6 year old publisher of travel offer websites based in Amsterdam, The Netherlands. At the time of the case study, Emesa employed twenty people, and has been growing rapidly.
“You can see a clear difference between the departments which are working holacratically and those who aren’t (yet): more clarity and open communication.” - Marcel Beemsterboer , CEO
Emesa reported benefits including:
- Addition of a clear governance structure
- Improved communication and clarity
- Improved transparency and explicit expectations
- Decreased turnover and improved work atmosphere
- Decrease in CEO as bottleneck, more distributed decision-making
Association of Unity Churches International
The Association of Unity Churches International is a non-profit that, at the time of the interview, employed 40 people. From one of their executives:
“There’s a greater sense of—everyone’s doing the same practice—and so everyone has equal capability in doing the process, and so when we sit in the circle there are no superiors and subordinates. Everyone is an equal player and everyone has the ability to question or to contribute to any issue that comes up. And that’s something that I think is extremely powerful and people all recognize that together that that’s very much a part of our community now. There’s a greater willingness to really be focused on what’s happening right now and not be so far ahead in the future and so “predict and control” is less and less.” - Dr. Gary Simmons, Assistant Vice President for Integral Operations
Reported benefits including:
- Increased employee participation leading to more organizational improvement and cost savings
- Improved clarity
- Increased collaboration and sense of community
- Improved focus and operational alignment with the organizational purpose
- Increased organizational agility
A team within the DC Government’s technology department has recently implemented Holacracy, and will serve as a pilot case-study for consideration of broader usage. An interview with the internal change agent responsible for the transition is currently underway and will be available within the Holacracy Community of Practice later in October.
It’s difficult to achieve true transformation by “bolting-on” innovative management techniques to a conventional power structure. Management pioneers can benefit from first upgrading the core operating system of the organization to one that facilitates rather than fights the emerging paradigm they seek to express.
Brian Robertson, Tom Thomison, HolacracyOne, Ternary Software, Holacracy supporters all over the world, the pioneering consulting firms bringing Holacracy to the world, and all of those thought leaders that have pioneered the models, methods, and philosophies that informed Holacracy’s development.
HolacracyOne Website: http://www.holacracy.org
Organization Evolved: Introducing Holacracy. http://www.holacracy.org/resources/organization-evolved
HolacracyOne's Blog: http://www.holacracy.org/blog
Introduction to Holacracy Video: http://www.holacracy.org/resources/introduction-holacracy