Holacracy: A New Way to Work Together

What Is Holacracy?

Most organizations are structured like pyramids, with leaders at the top and everyone else positioned below. Holacracy offers a different approach: a system without traditional bosses, yet with clear order. Instead of a hierarchy, Holacracy provides a framework for collective decision-making. It replaces fixed job titles with dynamic roles, each a clearly defined set of responsibilities. Meetings are designed with specific purposes, moving beyond mere habit.

The core idea is both bold and simple: Authority resides in the process itself, not in any single person. This empowers individuals to act more freely and clearly, guided by shared, understandable rules rather than vague intuition or charisma. It's an effort to create a more intelligent and human workplace. Notably, Ulteria in France also utilizes this framework.
 
Where Did It Come From?

Holacracy was developed by Brian Robertson, who felt frustrated by the inefficiencies of traditional business structures. At his software company, he observed that hierarchy slowed progress, caused confusion, and wasted energy. Drawing from agile methodologies, systems theory, and philosophical concepts, he began experimenting to create a system where power was shared, not concentrated.

In 2007, he founded HolacracyOne to promote this model. Holacracy evolved into a more formal system, governed by the detailed Holacracy Constitution. Large companies like Zappos adopted it, with mixed results; some found it beneficial, while others struggled. These experiences collectively helped shape Holacracy into its current form. In 2016, SINA in Uganda also adopted this framework.
 
What Makes Holacracy Unique?

• Decisions Tied to Roles, Not People: Authority is vested in the role, granting individuals the right to act on their responsibilities without needing permission from a manager. This reduces bottlenecks and enhances clarity.
• Power Distributed in Circles: Roles are organized into circles, functioning as teams with shared purposes. Each circle manages its own work while being part of a larger organizational structure, akin to branches on a tree.
• Carefully Designed Meetings: Holacracy utilizes two primary meeting types:
  • Governance meetings to define and evolve roles and policies.
  • Tactical meetings to address operational issues and coordinate work.
• Tensions Treated as Clues, Not Problems: A "tension"—the gap between the current reality and a perceived potential improvement—is seen as valuable information. Holacracy provides a process to translate these tensions into concrete changes.
• Conflict Becomes Constructive: By separating the individual from the role, disagreements tend to become less personal, allowing people to focus on the work rather than ego clashes.

 
How to Start with Holacracy

1. Adopt the Constitution: Leadership formally agrees to abide by Holacracy’s rules, distributing control to the defined process.
2. Train Everyone: Holacracy is a new operating system. Provide ample time and support for people to learn its vocabulary, tools, and rhythms.
3. Define Roles and Circles: Map the organization's work into clear roles and group related roles into circles.
4. Begin Structured Meetings: Implement regular governance and tactical meetings to embed the process into daily operations.
5. Support People in Their Roles: Offer coaching, resources, and patient guidance as individuals adapt to new ways of working and exercising authority.
6. Keep Adapting: Holacracy is not a static endpoint but a dynamic system that evolves as the people using it learn and grow.

 
What Are the Pros and Cons?

The Upsides:

• Clarity: Individuals have a clear understanding of their responsibilities.
• Adaptability: The organization can respond and evolve quickly as needs change.
• Empowerment: People act with confidence, knowing the scope of their authority.
• Professional Distance: Feedback focuses on roles and performance, fostering growth without personal conflict.
• Agile Workforce: The structure supports a more responsive and adaptable workforce, which can be beneficial during crises.
  

The Downsides:

• Steep Learning Curve: The system's language and processes can initially feel complex and overwhelming.
• Cultural Pushback: Resistance may arise from individuals accustomed to traditional hierarchical structures.
• Requires Investment: Significant resources are needed for training and ongoing support.
• Potential for Rigidity: If not balanced with human connection, the structured formality can feel impersonal or overly rigid.
• Mission Alignment is Key: If the organizational mission is unclear, the distributed culture may inadvertently create more problems than it solves.

 
Common Challenges (and How to Respond)

• Challenge: Initial Complexity.
  • Answer: Start small with pilot teams to build familiarity before scaling implementation.
• Challenge: Formality clashes with a casual workplace culture.
  • Answer: Maintain space for informal interactions, social connections, and human moments alongside formal processes.
• Challenge: Leaders are reluctant to cede control.
  • Answer: Reframe leadership within Holacracy as a deeper form of guidance based on trust and clarity, rather than direct control.
• Challenge: Incompatibility with legal structures.
  • Answer: Maintain a traditional legal board where required. Holacracy governs internal operations while ensuring legal compliance. Consult with legal counsel.

 
Real-World Stories

• HolacracyOne: The founding organization continues to use Holacracy fully, demonstrating that discipline in adhering to the processes is essential for the system's functionality.
• Medium: This publishing company adopted Holacracy but later abandoned it. They found that in their fast-changing environment, the structure sometimes impeded speed and resulted in higher costs than anticipated.
  • Lesson: Holacracy must remain adaptable to reality, avoiding rigid dogma.
• David Allen Company: The organization behind "Getting Things Done" embraced Holacracy and reported improvements in clarity and workflow, attributing their success to significant investment in training.
• Springest (Netherlands): This online learning platform successfully uses Holacracy, reporting increased staff happiness and faster decision-making.
• Zappos: Perhaps the most widely known case. CEO Tony Hsieh implemented Holacracy to foster innovation. While some employees thrived, others struggled, and the transition was perceived by some as detrimental.
  • Lesson: The system must align with the organizational culture, or the culture must be prepared for the system.

 
Legal Considerations

Holacracy transforms internal operations but does not alter external legal obligations. Traditional requirements regarding boards, taxes, and compliance still apply. It is crucial that teams understand they must adhere to all legal obligations. Clear distinctions between formal legal authority and internal Holacracy roles must be maintained, and Holacracy practices should be reflected in internal policies and charters.
 
Best Practice

• Master the Basics: Avoid rushing implementation. Ensure a thorough understanding of the system before attempting modifications.
• Prioritize Ongoing Training: Continuously support individuals in developing their roles, leading meetings, and processing tensions.
• Utilize Appropriate Tools: Digital platforms like GlassFrog can enhance visibility and manage the system effectively.
• Connect to Purpose: Ensure the organization's core mission guides all structural and operational changes.
• Maintain the Human Element: While Holacracy provides structure, cultivate a culture of warmth and human connection. Consult legal counsel as needed.
• Adapt to Context: Tailor the framework to align with your specific culture and mission.
  

Holacracy is not a universal solution; it will not solve all problems or be suitable for every team. However, it offers a distinct perspective – one that views individuals not merely as employees but as thoughtful, creative contributors. It serves as a reminder that order can be supportive, clarity can enable freedom, and leadership is fundamentally about empowering others to thrive within a shared structure.