Holacracy by Brian Robertson… the new management system that made headline news when Zappos asked that all its employees follow the system or take a pay to resign, and 14% of the employees took the option to leave.
The Holacracy’s structure resembles how nature organizes systems like the human body, where cells function autonomously within organs, which in turn function autonomously within the body.
The impetus behind Holacracy
The main idea behind this new system is that today’s companies have to survive in an increasingly complex and dynamic environment that requires an equally dynamic organizational structure in order to properly address new challenges and opportunities.
The solution germinated from the observation that humans have a unique ability to sense tension within an organization, which is defined as recognizing the gap of what currently exists, and what could be – the current reality… and the sensed potential.
Why should you care?
Holacracy is a system that aims to make companies evolutionary by capitalizing on this unique ability that we have. By doing away with the concept of Manager, it effectively breaks down communication and collaboration barriers formed by traditional, siloed pyramid org structures.
Managers like the new system because they don’t have to spend their entire days solving everyone’s problems. And employees like it because they feel truly empowered to act on tensions – problems and opportunities – that they recognize.
Rethinking the corporate org structure
Instead of thinking of a company as a pyramid of people in different departments and with different authorities, think of it as a set of nested circles that consist of different roles, not people. For example, a company may have a Production, a Marketing, and a Finance role. And a person can fill more than one roles. For example, the founder may fill the Marketing and Finance roles in a startup, while an employee fills the Production role.
All these roles live within a circle, which is simply a group of roles. As a company evolves and roles become too complex, they can break into sub-circles. In the previous example, the Marketing role can later evolve into a Marketing circle that encompasses the roles of client communications, advertising, and social media.
Innovation to Empower Employees
One of the key innovations of Holacracy is that the person who fills a role is empowered to execute an assignment the best way he or she sees fit. There’s no manager to over-ride that decision and no one has such authority – not even the CEO! In this sense, Holacracy creates a very empowering environment where authority is truly distributed.
For example, if the person filling the Marketing role in an organization wants to create a LinkedIn page for the company, he is free to do so without asking anyone’s permission. The only limitation is from any restrictions set in governance. For example, there could be a rule regarding the use of the company’s logo that he needs to adhere to.
Now let’s say that the person filling the Events Organizer role notices that the information on the company LinkedIn page is not updated frequently enough with the company’s events information. If she wants to expect the Marketing role will do that regularly, then she must propose adding a new accountability to the Marketing role during a governance meeting.
At an upcoming governance meeting, the person in the Events Organizer role presents that proposal. After a structured process involving some clarifications and reactions, the meeting moves on to the objections round, where the Marketing person says he can’t post about events because he doesn’t have clear information on when they’re scheduled. They amend the proposal to also make the Events Organizer role accountable for publishing a calendar of events. Once there are no more objections, the proposal gets adopted.
What does it all mean?
The Holacracy playbook is new and feels fairly complex. It starts by separating people from functions, assigns activities to specific roles, dynamically adjusts roles as companies and their environments evolve, and makes sure that roles have great clarity.
But this is just the beginning… Holacracy is a very different management system that requires you to rethink your organization from the ground up. It may feel awkward, foreign, and uncomfortable at first, but it may be the only path to install evolution within your company.