“Holacracy is a distributed authority system — a set of 'rules of the game' that bake empowerment into the core of the organization. Unlike conventional top-down or progressive bottom-up approaches, it integrates the benefits of both without relying on parental heroic leaders. Everyone becomes a leader of their roles and a follower of others’, processing tensions with real authority and real responsibility, through dynamic governance and transparent operations.”
Still confused? Well, here are 10 things you need to know about the movement:
There’s a Rule Book
Despite doing away with job titles and running without leaders, holacracy isn’t chaos. In fact, it’s very structured. The rules of order are spelled out in the Holacracy Constitution — the foundation for how an organization should operate. Because there is such clear direction and order, employees know exactly what they need to do.
So theoretically, you can’t just adopt certain aspects of this movement and say your organization is a holacracy. The rules are very explicit to ensure no one gets confused or has any questions as to how processes operate or who holds what responsibility.
Clearing the Air of Tension
There’s a good chance you’ve felt frustrated at work because of current processes or strategies. And you probably felt helpless because you either didn’t know who to turn to or how you could make any changes.
Because holacracy doesn’t have a top-down authority structure, it enables employees to self-organize. Each tension (aka frustration or concern) is addressed locally by specific teams. So instead of employees bringing up their concern to their supervisor and having to wait for upper management to make a final decision, holacracy eliminates those unnecessary steps. People govern themselves instead of people managing other people.
The Role of Roles
Do you know who’s in charge of making the decision for changing a project’s design? Is it the designer or the manager? Or maybe it’s the VP of marketing. Confusing, isn’t it?
An organization that runs on holacracy eliminates all of these speculations. In lieu of job titles, holacracy assigns everyone roles.
People can hold multiple roles in the organization, but each role has a specific purpose in terms of responsibility, function, authority, and areas of control. To an outsider, this can be misunderstood as a job description, but it’s definitely not. Unlike job descriptions, roles are constantly changing during the Governance Meetings. And delegating specific authorities to employees helps create clarity into who has control over what.
Governing With Governance Meetings
Traditionally, a company is run by head honchos (CEOs, Presidents, VPs, etc.), and an employee has to jump through various hoops in order to make any changes or decisions. Holacracy helps streamline this process by making it efficient.
Having a specific set of rules of how meetings ought to run, holacracy helps eliminate the bottleneck of decision making. Authority is distributed throughout the organization. Everyone has an equal voice. And every voice is heard. The Holacracy Constitution enables decisions to be made by a legislative process instead of a single seat of authority.
This eliminates the conspiracy of office politics. People don’t have to be hush-hush about certain topics for fear of negative repercussions. And employees don’t have to worry about playing favorites in order to get what they want in the workplace. Decisions are made by the majority.
Meetings With Tactics
Ever sat through a meeting where nothing got done? Well, with holacracy, those types of meetings don’t exist.
Every meeting has a set process, one that facilitates a triage of key issues. Basically, any work that is or potentially will get in the way of getting a task done will be immediately addressed and processed with a solution. Meetings are focused around next steps and what needs to be accomplished.
An Agile Culture
Some companies leave their culture up to chance. Or they have a set way that they refuse to change. But holacracy is all about creating an agile culture that’s constantly morphing to suit your employees’ needs. Because decisions are no longer bottlenecked, organizations can operate efficiently and decisions can be made immediately. And since decisions aren’t made by just one person, employees are empowered to make swift changes.
So instead of pent-up frustrations causing employees to resort to quitting, you’ll be creating an environment that allows people to voice their opinions. But not only that — it’s an environment where concerns are addressed in order to improve the organizational culture.
Hierarchy Still Exists
One of the biggest myths around holacracy is that there’s no hierarchy whatsoever. This can actually go either way. Yes, there are no job titles. There are no VPs to manage supervisors and no supervisors to manage employees. Basically, there’s no such thing as a subordinate. So in this sense, there is no top-down hierarchy.
But on the other hand, roles are gained through the governance process. So rather than a boss appointing a responsibility, it’s the people who do that. Roles are also grouped into circles, and those circles are grouped into broader circles. In this sense, there is a type of hierarchy, but it’s more linear rather than top-down.
... That Depends
Although holacracy has a strict set of rules, it doesn’t determine what decisions should be made. This movement guides organizations on how they should decide instead of what they should decide.
So when a decision like hiring (or firing) comes into play, the Holacracy Constitution doesn’t explicitly tell leaders what decision should be made. After all, there is no prescribed answer for any situation because every situation has different circumstances.
This is where hiring for culture fit is really critical. Make sure your candidate knows your company is a holacracy and that they understand what that entails. If they don’t fit into your culture or they don’t agree with the structure, then it’s best that both parties find out before the job offer is made.
Can’t Ignore Recognition
Typically, it’s up to the manager to dole out recognition. But since titles have been removed, whose responsibility will this be?
David Stirman of Medium — a digital publishing company that is operating on holacracy — realized what was missing with this new operation style. “Managers are usually responsible for giving people feedback, directing them, telling them 'good job's, and all of these things are super important to a healthy environment. You need someone to call you out or validate you when you’ve worked hard.”
And the solution? Peer-to-peer recognition. We already know the negative consequences of a culture without consistent recognition. Our Employee Engagement Report and internal TINYpulse data found that:
One-third of employees haven’t received recognition from their direct supervisor in the past two weeks
79% of employees don’t feel strongly valued
Without managers to recognize employees, you’ll need to distribute the responsibility to the people. That way, workers will continue to be validated for their hard work, and they will continue to feel appreciated.
Feedback Is Critical
Medium also found another missing piece: feedback. People need to know how they’re performing and what they need to work on.
“We created a few roles responsible for giving people regular feedback,” says Stirman. “This is where we’re starting to skirt the lines of having people managers, because it certainly sounds managerial, but these roles aren’t responsible for people’s work. It’s more of a mentor relationship than a managerial relationship.”
So employees will still need to be designated for the role of providing feedback. By making it a mentoring relationship, it eliminates cultivating a supervisor-subordinate relationship where one person holds more control over the other.
The biggest thing to keep in mind is that holacracy isn’t a silver bullet. It’s a set of rules to follow, but if your employees are already disengaged or your culture is down in the dumps, leveraging this movement will not magically save it. Of course, it has the potential to increase engagement, but only when done right.