Holacracy: Is It Passing the Real World Test?

holacracy, management, ZapposManagement theories often reflect the times in which they emerge. The good ones withstand the poking and prodding that comes from people wondering if the theory works in the real world. Holacracy is one of the latest theories to emerge.

What is holacracy?

According to holacracy.org, it is described as a social technology. It was started in 2007 by Brian Robertson. While it is much more involved than I can describe here in a blog post, it has a constitution which provides detailed description about how an organization is governed, how and when to organize circles, decision-making and responding to “tensions.” The main point is to “get the work done.” It distributes authority throughout the organization via circles so there is no manager in the traditional sense. There is quite a difference in vocabulary as you dive deeper into holacracy.

Role: This is not a person. It is actually the task, function or activity involved in achieving a purpose on behalf of the organization.

Circle: A group of people organized to fulfill a function within the organization. These circles may be formed or reorganized at a governance meeting to meet the needs and aims of the company.

*Olivier Compagne of HolacracyOne was kind enough to clarify the definitions in his comment below. The Circle is not a group of people as I wrote. Mr. Compagnie explains that it is the group of roles and people can fill one or more of these roles. In my research, it was also stated that people may fill these roles in more than one circle. The people are called “partners.”

Governance meetings: These meetings evaluate how the company is operating and respond to any problems or glitches (termed “tensions”). A member of the circles, the Rep Link, can propose a change or protest changes to his/her circle. The constitution outlines in detail what procedures must be followed for the benefit of the organization.

*Mr. Compagne also kindly clarified that there are governance meetings for each circle besides the ones evaluating how the company is operating and responding. He also clarified that any circle member (partner) can propose changes

Partner: This person is a member of a circle and responsible for working a specific project, accountability and noticing problems or issues, “tensions.”

Rep Link, Lead Link, Secretary, Facilitator: These core roles in a circle are elected roles which serve to manage the project and keep it on time and organized, represent the circle in governance meetings and take care of any unfilled roles.

There is much more to this model. Essentially, holacracy provides a clear structure that supports the purpose of the organization and rearranges the hierarchy to ease the process of how the work is completed. Everyone in the organization is urged to participate in their circles, notice problem areas and respect the areas that are the responsibility of other circles. There is still a hierarchy even without the management titles but it does support all members of an organization to have a voice and decision-making authority.

Critiques of holacracy

Holacracy is probably not a clear management theory. It is really more an organizational system and tool for companies to meet their mission. Zappos is one of the most well-known companies adopting this system and it makes sense for them. Zappos has a history of adopting unconventional practices that work well for it. However, that is one company. Is holacracy a system that other companies can adopt successfully?

Might be better suited for small companies: This seems apparent since smaller organizations can act with agility and engage its employees more readily. There is less bureaucracy so a new system can be adopted and made part of the whole operation. Larger companies tend to have more institutional memory, the likelihood of disengaged workers and overlapping or duplicating systems in place.

It is a complicated system to learn: Despite a constitution that spells out how to organize and get the work done, it is not an easy read nor does it really define the terms well.

Management theories and models often don’t last: Holacracy could be a flash in a pan or even a model that only works in certain types of companies (think small, fast growing). It seems to depend on the workers being able to tolerate ambiguity while following a certain set of procedures at all times.

Buy in of the organization’s values: William Tincup expresses concerns that it could be more like a cult because you have to “hire to it, fire to it, live it…each and everyday. Bye bye values!”

Clarity of daily work and future direction of the organization: One of the areas holacracy is very strong is the delineation between the work on which each circle is focused and the strategic direction. Also the purpose of the organization is reinforced.

This is just the beginning

Holacracy is a new way of thinking about managment and it challenges one to consider how work and people are organized. It will be interesting to see over the next few years how Zappos performs once they complete the process of adopting this new system.

Are you familiar with holacracy? How do you see it operating in the real world? Add your thoughts and opinions to the Twitter chat, #KaizenBiz Friday, July 11, 2014 at 5pm GMT/12pm ET/9am PT.

What do you know about holacracy?

How could holacracy reduce the problem of disengaged workers?

Why would a Lead Link rather than a Manager be a more effective way to assign tasks and manage the work of the circle?

How do people design their careers in a holocratic organization?

Would you say that holacracy work work better in retail, tech companies, health care organizations or somewhere else?

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