Michael Novak

Michael Novak

CEO

@michaelgarcianovak

What, exactly, is Holocracy?

Learn more about this emerging organizational structure, how it works

October 12, 2019 3 min read

This is a common situation in many companies: a problem pops up in a project. The project team is well-acquainted with the situation and most likely, they have the tools to solve it, but they have to check with the higher-ups. They are flooded with work, but can’t in good conscience approve a solution without taking time to understand the problem. The team waits, usually while the problem grows larger, until they get approval from their superiors to implement a solution they already had in mind. Time is wasted. Money, too.

When the traditional way of organizing a business seems slow, and decision making is too centralized, it is time to look into new structures for your organization.

Holacracy is a new, different way of organizing the structure of a company, and it’s been making noise since Brian J. Robertson published his book on the topic and founded HolacracyOne. This organizational scheme is designed to remove obstacles so that work gets done faster and with greater clarity and autonomy. With holacracy, workers do not have to convince their bosses before they act. Instead, they can seek the autonomy they need to act on their own. Instead of the rigid organization of a pyramid, the company is shaped as an organism, where cells form tissues around their common functions, and respond independently to their environment.

A few companies have been experimenting with this model, but the best known are, of course, Zappos and Medium. The basic objective of this structure is to allow for distributed decision-making and, at the same time, provide everyone with the opportunity to work on what they do best.

Workers attend special meetings, created to make improvements in the way things are organized. These meetings follow a disciplined process so that all voices can be heard free of the tyranny of the hierarchy. This way, workers gain greater authority to solve problems themselves, without the need for the help of their boss.

According to its creators and implementers, holacracy is not about getting rid of managers or hierarchy. Although titles are banned, administrators still exist. However, their position is not based so much on being in charge of a department with bosses, but on circles of people that perform a particular task. The arrangement is vertical, and information is open and accessible. Each upper circle tells a lower circle what its purpose is and what is expected of it. An upper circle can do anything with a lower one: change it, reuse it, absorb it, abolish it if it does not work according to its expectations.

The vast majority of decisions made in a holacratic company are basically dictatorial. They are taken by someone who plays a clear role and has authority to do so (and the expectations that authority implies). However, this autocratic power and the associated expectations are continually being granted. They evolve through a mechanism very different from the usual hierarchy of management.

Leadership is distributed systemically throughout the company, giving everyone the opportunity and ability to become entrepreneurs within the roles they perform. Instead of obeying a boss and following the status quo, workers can do their jobs, devote themselves to what they are best at, and contribute to the growth of the organization.

The holacratic model is a yet emerging structure, with many possible concepts for insertion. It is not really applicable to any organization, and the more used a company is to the status quo, the more difficult it will be to adopt. But this does not mean that the holacracy is exclusively for new companies starting from scratch. Leaders can apply some of their concepts, or adopt some of their goals to improve their business at any stage.

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Michael Novak

Michael Novak

CEO

@michaelgarcianovak

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Michael is an expert in innovation, education and entrepreneurship. As a consultant, your expertise is strategic innovation. He is CEO of Novak Innovation.