Holacracy, solution to all our problems or hype?

More and more we read about Holacracy, a new organizational philosophy that is supposed to solve all organizational issues. But is it really the dream solution for reaching your organization’s full potential or is it another philosophical hype?

So what is Holacracy?

The CEO of Holacracy One, Brian Robertson, was looking for a way to capture the tension sensed in the lowest levels of organizations. At the base lies the assumption that the person performing the function knows best what decisions and actions to take.

Holacracy refers to a boss-less organization, where all employees are fully empowered to make the necessary decisions related to their function, as long as they don’t break the constitutional rules or other people’s power spheres by eliminating consensus, politics and long decision-making processes.

What does this mean in practice?

In short, all roles that are needed in the organization are documented and 1 person can fulfill many different roles. Related roles are organized in functional circles, such as Marketing, IT or Operations. Different circles remain connected by ‘links’, which are people that make sure that content and strategy of circles remain aligned.

When issues arise or ‘tension is sensed’ a meeting will be organized to solve it. The goal of governance meetings is to solve issues related to roles and responsibilities, for example the need to create a new role. Tactical meetings are organized to solve operational issues and to ask for input and feedback of colleagues. Meetings follow an integrative decision approach to avoid any type of consensus or political influence. It is up to the person fulfilling the role to make the final decision.

Source image: medium.com/@jmitch

What happens with overarching functions?

So how can you deal with organization-wide functions such as HR or Controlling? For example, how can you effectively evaluate people’s performance without acting as a boss? The first solution is to assign 1 person to evaluate if employees are fulfilling their role objectives based on peer feedback. The second option is to buy an ‘app’ or software application from the Holacracy App store to run separate from the core system to fulfill the function.

Is Holacracy as perfect as it sounds?

Holacracy is said to lead to faster decisions in an increasingly complex market place, more efficiency and transparency, and for employees a sense of purpose that will lead to higher productivity and competitiveness. However, not all managers will be willing to sign away their power and take up a more operational role and in the same way not all employees will be willing to take up more responsibility.

Also, Holacracy claims not to have any hierarchy, bosses or coordinators, but we have serious doubts about this, when you look at the circle structure as we described above and the responsibility of the ‘links’ to keep everyone aligned.

To conclude

In our opinion Holacracy is a very nice and well thought through example of a new modern organizational structure and it has a lot of merits. However, future organizational philosophers should look further into some of the downsides to develop a more advanced version or use Holacracy as a base to build on further.

What do you think? Do you have experience with Holacracy and have a different view? Let us know!

Authors: Ellen van Beurden, Senior Consultant & Charlotte Vidaic, Consultant