Holacracy is a fundamentally different “operating system” for organizations. Holacracy revolutionizes how a company is structured, how decisions are made, and how authority is distributed. Perhaps the best-known examples of companies who have adopted Holacracy are Zappos and David Allen Company. “No one reports to anyone anymore,” explains The Washington Post about Zappos. “Instead, employees self-manage and belong to different decision-making circles that keep the company operating.”
On Engaging Leader, we’ve often discussed how 21st-century teams require going beyond traditional command-and-control leadership (which I call Influence 2.0) to a more interactive mode that I call “engagership” or Influence 3.0. One crucial principle of Influence 3.0 is delegating authority for planning and decisions. There are many reasons this is critical; for one, today’s business environment is so complex and changes so rapidly that organizations lose if they rely on a “heroic leader” or even a group of senior leaders acquiring information, attempting to predict the future, and cascading decisions to the rest of the organization.
For most leaders, this is an ongoing challenge, because authority seems to keep ending up back in our lap; perhaps it’s the micromanaging inclination of the leader to take charge, or a team member’s fearful or lazy inclination to pass the buck — or is it actually the result of traditional top-down organizational structure of authority? But if we simply eliminate hierarchy altogether, we find that “flat-management” alternatives … well, they fall flat. For example, a lack of clarity encourages people to avoid making decisions, or else to seek only decisions that have a full consensus, slowing everything down until there is a crisis that prompts the big boss to momentarily return to command-and-control leadership.
Holacracy proposes to be a third way: it promises to bring structure and discipline while distributing authority and accountability where it’s most effective. If that’s the case, then Holacracy could be a tremendous opportunity for us to practice Influence 3.0 in our organizations.
According to HolacracyOne, the key components of Holacracy are:
- Flexible organizational structure with clear roles and accountabilities
- New meeting format geared toward action and eliminating over-analysis
- More autonomy to teams and individuals to solve issues themselves and cut through bureaucracy
- Unique decision-making process to continuously evolve the organization’s structure
Here are some phrases that have been used to describe Holacracy:
- Peer-to-peer workplace — as opposed to supervisor-employee workplace
- Distributed-authority management system — versus centralized-authority or top-down authority
- Self-managing employees organized into decision-making circles
- Constitution-based management or “playing by the rules of the game” — versus management based on the leaders’ prerogative (Authority and decisions are based on transparent policies, similar to a game of chess or football where the game functions based on agreed-upon rules rather than the whim of a referee.)
As described on Wikipedia, the advantages of Holacracy include:
- Increasing agility, efficiency, transparency, innovation, and accountability within an organization;
- Encouraging individual team members to take initiative and give them a process in which their concerns or ideas can be addressed;
- Reducing the burden on leaders to make every decision;
- Making individuals more responsible for their own thoughts and actions; and
- Helping to prevent gender-biased behaviors.
Brian Robertson is author of Holacracy: The New Management System for a Rapidly Changing World. Brian created Holacracy and founded HolacracyOne, the organization that is training people and companies all over the world in this new system. Robertson had previously launched a successful software company, where he first introduced the principles that would become Holacracy, making him not just a management theorist, but someone who has successfully implemented a holacracy-powered organization. He lives in Philadelphia.
Resources Mentioned in This Episode
- Website: http://www.holacracy.org/
- Book: Holacracy: The New Management System for a Rapidly Changing World
- Facebook: https://www.facebook.com/HolacracyOne
- Twitter: https://twitter.com/HolacracyOne
- Blog: https://medium.com/about-holacracy
- Podcast: 111: Getting Things Done (GTD) for Leaders | with David Allen
- Harvard Business Review article: The Big Misconceptions Holding Holacracy Back
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