What’s Holacracy?
Holacracy is a corporate governance structure where team members collaborate to achieve company goals through unique, independent, and complementary teams. A flexible organizational structure replaces the idea of a corporate hierarchy, empowering individuals to make essential choices within their area of control.
How Holacracy Works
Holacracy replaces a strict command structure with flexible positions with considerable power in their area of responsibility. Instead of a pyramid, holacracy is a series of nested rings, symbolizing autonomous teams with numerous positions.
Each role in a holacracy has a distinct purpose, one or more “domains” and “accountabilities.” A CEO can head one team and be a subordinate on another since everyone has numerous duties. Governance meetings inside each circle settle problems.
Role leaders can make essential choices without management approval. This creates holacracy’s “golden rule”: “To fulfill your role, you have the full authority to make any decision or take any action, as long as there’s no rule against it.” Holacracy eliminates top-down management and empowers people and teams.
Origin of Holacracy
The 1967 book “The Ghost in the Machine” by Arthur Koestler defined holarchy as the organizational linkages between holons (from the Greek word for “whole”), which work independently but cannot exist without the structure they operate within.
Later, while heading Ternary Software in the early 2000s, Brian Robertson invented Holacracy. Three years after founding HolacracyOne with Tom Thomison in 2007, they released the Constitution. Zoom.com has publicly adopted Holacracy.
Zappos.com, with 1,500 people, is the largest Holacracy adopter.
Examples of Holacracy
Zappos.com, an online retailer of apparel, shoes, handbags, and other accessories with over 1,500 workers, is the largest holacracy employer. Zappos says holacracy “allows every employee to quickly surface and act on customer feedback.”
Around 185 firms have openly accepted holacracy principles, according to HolacracyOne. In addition to Zappos, Liip, a Swiss digital firm, Springest, a Dutch learning software business, and Mercedes-Benz.io are others.
Special Considerations
Critics call holacracy “hype,” or the next tech term. Nearly 20% of Zappos employees took severance when the business adopted holacracy, and many mentioned it as their reason for leaving.
Several IT businesses abandoned holacracy. The blogging service Medium abandoned holacracy three years after adopting it in 2013. The firm blogged that holacracy “was getting in the way of work.”
Conclusion
- Holacracy is a self-management system without a typical managerial structure.
- In a holacracy, people have various positions, purposes, domains, and responsibilities.
- Holacracy gives employees considerable decision-making power if they follow the rules.
- Periodic governance meetings can address organizational issues.
