Will Holacracy Work for Your Organisation?

Will Holacracy Work for Your Organisation?

Published 18th April 2018
Sara R Moulton
Published 18th April 2018

What would a self-managed organisation look like, and is your organisation ready for this?

In his article for HQ Asia, "The World as a Romanesco Broccoli: Representing Today’s Complexity," Dominique Sciamma, Director of the Strate School of Design, wrote, "By acknowledging the complexity of the world, we need a new approach – a holistic one – to read, understand, represent and exploit the world in all its manifestation without breaking them into pieces. Things, projects, and organisations cannot be understood, produced or ruled anymore through separation. There has to be a synergic approach."

Holacracy is a new approach that may just work for your organisation. To put it simply, holacracy is "a self-management practice for running purpose driven, responsive companies". 

Rather than having hierarchical layers – a management structure common in many organisations today, teams – called "circles" – are formed on a project basis in an organisation that practices holacracy.

According to an article in Harvard Business Review, "Beyond the Holacracy Hype," authors Ethan Bernstein, John Bunch, Niko Canner, and Michael Lee described holacracy as "the most widely adopted system of self-management" in which "authority and decision making are distributed among fluid 'circles' throughout the organisation".

To be very clear what holacracy is

At the heart of it, holacracy is a different way by which employees view their work and each other. 

Rather than employees assisting with one part of a project – e.g., creating a newsletter for a marketing campaign – each employee has equal ownership over the project in a holacracy. What is the real difference here?

Sciamma asked us to imagine a world: "A world where everybody acts as a designer, whatever the project they are working on, big or small... Forget the assembly line, where everyone was doing meaningless gestures, and welcome the network of co-owners! We are at a time and a space made of meaningful projects, in which all holders are sharing consciously and empathically the same intention."

Holacracy empowers employees to own projects – from ideation to delivery. Holacracy also requires employees to see how each project fits into the bigger picture – with meaning and shared intentions. It is such intangibles that hold the organisation together and ensure outcomes are delivered, instead of reliance on command-and-control methods between managers and subordinates. 

Real examples in the workplace

Successful Zappos

In 2013, CEO Tony Hsieh announced that Zappos, an online shoe and clothing company headquartered in the US, would adopt holacracy as an organisational model. "When leadership is a shared responsibility, everyone must understand and practice it. You end up with more formal team leaders as the number of modules increases. Since adopting holacracy, Zappos has gone from 150 team leaders to 300 lead links, who are responsible for its 500 circles."

Why it worked: Hsieh gave each employee the opportunity to opt-out. In this Zappos memo supplied to Fast Company, Hsieh breaks down the why and how, and tells employees that they are eligible for a severance if they do not agree with the organisational model. This helps ensure that those who stayed on are believers of holacracy, and are engaged to make it work at Zappos.

Not so successful Medium

Medium, a contact platform meant to democratise publishing, adopted the model in 2014. By 2016 they announced that they would be moving away from holacracy. In "Beyond the Holacracy Hype," the authors quote Medium's Head of Operations, Andy Doyle, who explained that "it was difficult to coordinate efforts at scale" and "using self-management across an entire enterprise to determine what should be done, who should do it, and how people will be rewarded is hard, uncertain work, and in many environments, it won't pay off". 

Why it didn't work: Doyle explained it was time consuming and divisive to achieve goal alignment when projects are of a larger scale. Furthermore, holacracy requires commitment to record-keeping and governance, and codifying responsibilities – in explicit detail – for each role ironically hindered proactivity and shared ownership. To quote Doyle: "For us, holacracy was getting in the way of work."

So, will holacracy work for your organisation?

Adopting holacracy requires a mindset shift, both on the individual level as well as the organisational level. For more traditional organisations today, it means a rethink in at least three aspects:

  • How job descriptions are crafted;
  • How employees 'check in' with their superiors; and
  • Transparent rules over office politics, and rapid iterations over big re-organisations.

Ultimately, holacracy encourages all employees to be self-managed, to see their projects as part of the organisation, and to see the interconnectedness between their work and their colleagues' projects. And, it requires deep commitment and tangible actions in response, even when some actions can be a real pain.

Do you think your organisation is at this stage? If so, holacracy may just be its fitting next chapter as your organisation navigates today's complex world.

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