Thoughts about Holacracy: the revolutionary management system

I was listening to a Dutch podcast about innovation, and a few of the guests there described a management system called ‘Holacracy’. The past few weeks, I’ve visited several webinars and read about some of the implementations of Holacracy. And, of course, I read the book. In this blog, I’ll share some of my thoughts about the system.

Let me start with some aspects of the classic pyramid-style organization that (I guess?) most organizations still have. I’ve worked in such a system a few times, and I’ve always wondered whether this is the best form for organizing work (note: ‘work’, not ‘people’).

Communication. I’ve been occasionally involved in long chains of e-mails, where I was the last link and the one to do the actual work. Now and then, it occurred that the original question was quite different from what the previous-to-last link in the chain told me. There is a game show in The Netherlands, where they play a game with 5 people. Out of them, 4 wear a headphone, and the first is told a story. That person than tells the next person to take off the headphone, and tells that person the story. That continues until the final telling to person 5. At that time, the story has usually turned into something completely different.

That’s how those e-mail chains seemed to work. A similar thing happens in armies. The commander in chief wants to issue an order, and that has to go down the chain to the soldiers. In practice, people realized that the strict orders did not allow for sufficient leeway to deal with changing situation on the ground. As a solution, they added the commander’s intent to the order: a high-level overview of what the orders intended to achieve. In this way, the order was accompanied with context information that allows for initiative.

So it seems to me that communication in a the system is difficult. In fact, I guess this goes for any system that attempts to organize work. My main point is that I’d like there to be as few links in the chain as possible, and perhaps some rules or structure associated with a description of work.

Responsibilities. Another example concerns responsibilities. Each element in the hierarchy has responsibilities, and it is important that those responsibilities are explicit. If not, then it is unclear who has to do what work, and you’ll end up ‘resource shopping’ – looking for somebody to do the thing you need done. Also, from a personal point of few, role unclarity is a known cause of stress (see, e.g., this article). Over the years, I got the idea that managing responsibilities is often an interplay between the formal structure of the company (roles and such), the manager, and the employee. Structure, with a sauce of culture. I’d like to have a system where responsibilities are transparent to all, and where there is a known procedure to change them. Or am I being too much of a structure-guy now? I can imagine that some leeway is useful as well. Hmm, I don’t know.

Adaptability. A third thought is about adaptability. Changing a pyramid structure is (I think) very complicated. If a new responsibility has to be assigned, or an existing one changed, I can imagine that this leads to a lot of arguments. If the same role exists in multiple parts of the structure (different departments), then you have to get a lot of people on board in order to change a role. And what if you need a new role? [in the world of data, this is a fictional scenario of course] I guess that the difficulty of adaptability becomes especially evident when a company is ‘reorganizing’. These projects must be dreaded by all involved – new teams, changed responsibilities, new structure etc. Lots of room for uncertainty and stress.

Purpose/mission/vision. Another idea concerns a company’s purpose/mission/vision and its culture/values. I’ve always wondered what would happen if I went to a company and asked its employees why they worked there. I bet the most prevalent answers will be along the lines of ‘I like my team’, ‘I like the activities involved in the job’, ‘it’s close to my home’. How many would give an answer that relates to the company’s purpose/mission/vision? And what about the description of the culture and values that a company gives on its website. Are those the result of the daily actions of its people? Or do they describe how employees are supposed to behave? I’m going about my description in a roundabout way, but I’ve always thought of a company as the sum of its people. Perhaps it is better to view a company as a separate entity, with its own identity, purpose, values, etc. Just like a real person.

Source: bol.com

There are, of course, ways to deal with some of these issues. You typically learn these along the way: being clear about your responsibilities – saying no to work outside your responsibilities – escalating problems – asking lots of questions before starting a task. Stuff like that. But it seems like these mechanisms evolved to deal with the system, instead of designed as part of the way the system works. There should be a rule book that states exactly how the structure works.

Holacracy. I just have an intuition that another way of organizing work is needed. Especially in our tech-driven era, with its speedy changes and ‘innovate or die’ mentality. I realize that there are a lot of ideas in this area, and most book shops are filled to the brim with management books on this topic. But since a pyramid still seems to be the default setup, I think we’re not there yet. Holacracy has a few nice ideas, and I’ll try to describe a few of them.

  • Holacracy specifies a rule book that everybody has to adhere to, including the CEO. In a sense, power is shifted from the CEO to a process.
  • Holacracy organizes all organizational functions in roles and circles.
  • Each circle has a purpose, a domain, accountabilities, and roles that are defined in that circle.
  • Note that Holacracy does not organize people, but its roles and functions. For me, I like that this clearly differentiates between who a person is, and what that person does.
  • Circles are allowed to define sub-circles for delegating some of its accountabilities.
  • All roles and circles are described explicitly, and these descriptions can be looked up at any time.
  • There is a specific process for changing the structure (e.g., adding circles, adding roles, or changing responsibilities). Note that this also separates how to deal with operational issues (what we do) from dealing with governance issues (how we do it).
  • This adaptability also extends to ‘strategy’: the way an organization currently expresses its purpose.
  • People who fill a role have a clear mandate for taking decisions. They are also expected to use that mandate: there is no more chance for hiding behind your manager 🙂
  • There is a healthy focus on experimentation, considering it a necessary ingredient for learning to express a circle’s purpose.
  • Holacracy puts emphasis on transparency: projects, actions, priorities, projections, metrics are all immediately available upon request.

I like the adaptability of Holacracy, its transparency, and its structure. It seems like a great way to deal with uncertainty. Also, it empowers people to take the decisions that they are allowed to take. It improves their autonomy. There is also a good deal of pragmatism: where I can sometimes over-organize things, Holacracy focuses on actions and only makes structural changes when needed. Also, I think it is right that the organization is recognized as a separate entity. And because the people and the roles are separate, I can now also see how I can have a different purpose than the organization that I work for: our activities are (temporarily) aligned whilst we are fulfilling our own purpose. Ahum … am I the only one who thinks about these things? Or have I gone overboard in abstractions?

There is also one element that I’m unsure about. I typically have many ideas and suggestions, often outside of my own responsibilities. Understandably, this can be annoying for colleagues, because I don’t always want to work on those ideas. How do you deal with that in Holacracy? Somehow it seems like a waste if good ideas are discarded or kept back. Let me know if you have thoughts about this.

For now, thanks for reading this post. As always, if you have ideas or suggestion, feel free to connect on LinkedIn!