What is Holacracy?


Many people in the workforce are disenfranchised with the company they work for and have limited loyalty to the company. There are several factors surfacing this feeling in current and new workforce entrants. Holacracy is a different approach to running a company that removes structure and distributes authority and responsibility.

Authority and responsibility are distributed to the people with the greatest information needed to make the decision. Like Lean principles suggest, this results in the most informed decision being used to remove friction and loss of time waiting for response or action from groups outside of the responsible group. This approach maps extremely well with the concepts behind DevOps and is a natural fit for those trying to shift to a DevOps IT environment.  

The company adopting Holacracy creates a constitution to define how the company will run. Circles are formed with authority and responsibility to deliver against an objective in whatever manner they see fit, so long as the approach stays true to the constitution and members of the circle consent. The constitution binds the corporation to a set of social and investor responsibilities that have equal weighting.

Why is this emerging? We are in a time of significant transition. Technology is now available to everyone that in the past has only been available to large corporations. The up-front costs on enabling a lot of technology is no longer necessary since cloud-based solutions are available for most any IT capability. Additionally, our traditional models of managing a business are in flux and we have millennials entering the workforce and they have a different ideology. This could all be coincidence, but I believe the three are interconnected.

With the boom of cloud computing and open APIs, programming languages are becoming simpler to use and technology has become a commodity that all can play with (if they want). This gives you-and-me the opportunity to create and deliver most anything we want without having deep pockets and money to burn. With business, we are shifting from a top-down, big business environment to more federated small companies that collaborate, and in many cases, barter rather than pay for services. Like most everyone, I have an opinion for why this is happening. But, like most, my opinion may seem sweet to me but stink to others.

Big business has become unbalanced and too greedy and the millennials (sorry for the tag, no offense intended) are not buying in. While a healthy profit is a good thing and something anyone that goes into business is entitled to, moving from a win-win to a win-lose, to a take-everything-at-any-cost approach is prevalent in big business and it is unacceptable. Enter Holacracy.

With Holacracy, a business is more like a society, with a constitution that protects the values and people of the organization. Groups or circles are formed with an imperative they are authorized and are responsible for achieving in the way they think is best. Upper circles can spawn lower-level circles as needed and the lower and upper-level circles stay connected. Holacracy is different or a superset of concepts borrowed (from among other areas) four concepts from Sociocracy as Brian Roberson describes in this interview.

  • Decision by Consent, not consensus or oversight: All arguments are heard and so long as there is no compelling reason not to do what is proposed, consent is given. This is different than consensus since with consensus everyone needs to agree. With consent, there just needs to be no objections that are not addressed, regardless of whether you agree or not. 
  • Circle Organization: The hierarchical structure is based on somewhat autonomous circles or people, each circle focused on a specific goal/aim/target. Higher-level circles create lower-level circles to achieve a certain outcome and give the circle the authority and responsibility to achieve its goal.  
  • Double-linking: There are hierarchical (or treed) circles that are linked. Lower-level circles are linked to the upper-level circle above it by two people from the lower circle, the person responsible for the lower circle and another person who is elected as a representative for the lower circle.
  • Elections by Consent: People are elected (as in double linking) by consent where open discussions/all arguments are presented and consent is given for to the person elected.       

To find out more about this approach to running a business, do an Internet search of Holacracy and Sociocracy. There are .org websites for both. You’ll find a lot of recent articles on the topic as Brian Robertson has just released a book titled Holacracy: The New Management System for a Rapidly Changing World. Additionally, Zappos Corporation has adopted this model to run their business, with positive and negative articles about how it is working out. More information is also available about Sociocracy and Holacracy on the Internet.  

There are many companies working on meshing/softening the edges between work and home life or how we consume our entertainment. For me, Millennials, Holacracy, and Cloud/IoT are meshing/softening the edges between our social and business ethic, and the generation that will make Holacracy a common practice in business are the millennials.     

  

Andy Ruth 
SEI Mentor
Apprenticeship Program 
ar@sustainableevolution.com