holacracy | Sherrie Suski

Last week we talked about Holocracy, what it is and what its advocates say the potential benefits are. But in reality, does Holocracy work ? Can a type of self-management that gives decision making power to fluid teams, or “circles,” and roles rather than individuals yield results and better decisions than a traditional structure? How well do people deal with the uncertainty that a holocratic approach creates?

Sourcing and Hiring

Holocracy models complicate sourcing and hiring decisions. How do you advertise for a job that is comprised of ever changing micro roles and how do you assess whether the person sitting in front of you actually is competent at those micro roles and any other talents they might have? People are used to looking for traditional job titles, but in holocracy, there are no traditional job titles. Do management level employees worry that deviating from their career path might stall out their careers. What if they are at a Director level now and you are trying to recruit for a team member with a skill set normally held by an Accounting Dir. How many would take a “team or circle member” title?

Micro Roles

Another issue that holocracy creates is the formation of micro roles. No longer is one individual responsible for a specific set of set roles, but a swirling set of micro roles that are ever changing. It can complicate the work actually getting done as employees may be responsible for up to 25 different responsibilities and struggle with prioritizing them and deciding where to focus first. They may be members of a number of different circles and have weighty responsibilities to each, but not be able to satisfy all of them or be forced to prioritize in conflict with others.

Compensation

Compensation becomes difficult as well. Not only are there struggles with determining internal equity as this now requires each of 100’s of micro roles to be assessed and the value of these roles change as new circles are created and as the organization matures and different skills become more or less valuable, but external equity is an issue. How do you go to the market to assess the worth of a position when there is no longer a match for the position? There is nothing to compare the person’s position to.

Unlearning old behavior

For holocrcay to be successful it necessitates that both bosses and subordinates unlearn old behavior. If everyone is truly to be tapped for their full potential then there cannot be those who are hesitant to express opposing views in front of what used to be superiors. This is a hard habit to break for both bosses and subordinates. It is hard for leaders to learn to step back and not lead all the time.

Holocary has yet to be proven as a model that offers significant benefits over a traditional structure. The best of both worlds may be to incorporate some of the circle mentality into the traditional structure allowing everyone a voice to be heard and encouraging growth horizontally as well as vertically.

Before we delve into whether or not holacracy is right for your organization, how many of us know what holacracy is? Holacracy is a social technology or system of organizational governance in which authority and decision-making are distributed throughout a holarchy of self-organizing teams rather than being vested in a management hierarchy. In theory, holacracy empowers people to make meaningful decisions and drive change.

Instead of a traditional management structure where questions must go from the bottom to the top and decisions go in reverse, organizations that adopt holacracy empower agile teams of people to make and implement decisions.

Self-organization models typically share three characteristics:

Teams are the structure

In holacracy, there are “circles” or many companies simply call them “teams.” Whatever they’re called, these basic components are not, individuals, and not units, departments, or divisions but they are the essential organizational building blocks. Individual roles are defined and assigned in order to accomplish the work. As in more traditional hierarchical organizations, there may be different teams for different projects or functions like finance, tech, sales. But self-managing enterprises have a lot more of them. After Zappos implemented holacracy, 150 departmental units evolved into over 500 circles.

Teams design and govern themselves

Although self-organizing companies try to avoid the traditional hierarchy, the teams are a part of a larger structure, which they are actually able to shape and refine. Holacratic organizations have everyone sign a constitution—a document outlining the rules by which circles are created, changed, and removed. So the circles not only manage themselves; within those guidelines, they also design and govern themselves. The constitution doesn’t dictate exactly how people should do their tasks. It explains in a broad way how circles should be created and operate: how they should assign roles, what boundaries the roles should have, and how the circles should interact with one another.

Leadership is constantly changing

In self-managed organizations, leadership is distributed among roles, not individual people. People usually hold multiple roles, on multiple teams. Leadership responsibilities continually change as the work changes and as teams create and define new roles. Technology is essential for keeping all these changes straight. The information is accessible to anyone in the organization and each individual’s commitments are visible to everybody at the company. Supposedly, transparency enables cross-team integration.

Although it is becoming a buzz word, holacracy is not being adopted at a rapid pace. The organizations who have tried to adopt it run into a myriad of issues, including increased turnover and decreased productivity given the endless meetings. While some look at it with interest, others simply say it does not work. Next week we will delve into some of the issues that have arisen when organizations have tried to implement holacracy.

Holocracy- Implementation Challenges

Hierarchy versus holacracy