Holacracy

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Holacracy is a method of decentralized management and organizational governance, which claims to distribute authority and decision-making through a holarchy of self-organizing teams rather than being vested in a management hierarchy. [1] [2] Holacracy has been adopted by for-profit and non-profit organizations in several countries. [3] This can be seen as a greater movement within organisational design to cope with increasing complex social environments, that promises a greater degree of transparency, effectiveness and agility. [4]

Contents

Origins

The term is found in print for the first time in the adjectival form holocratic in a book from the Collège de 'Pataphysique in May 1957. [5]

The Holacracy system was developed at Ternary Software in Exton, Pennsylvania. [6] Ternary founder Brian Robertson distilled the company's best practices into an organizational system that became known as Holacracy in 2007. Robertson later developed the "Holacracy Constitution" which lays out the core principles and practices of the system. In 2011, he released a Manifesto 16 of Holacracy which was later developed in June 2015, as the book Holacracy: The New Management System for a Rapidly Changing World, that details and explains his practices. [2] He claims that it resembles Scaled Agile Framework, Sociocracy and Nexus. [7] Robertson claims that the term holacracy is derived from the term holarchy; the latter was coined by Arthur Koestler in his 1967 book The Ghost in the Machine . [8]

Koestler wrote that a holarchy is composed of holons (Greek: ὅλον, holon neuter form of ὅλος, holos "whole") or units that are autonomous and self-reliant, but also dependent on the greater whole of which they are part. [9] Thus a holarchy is a hierarchy of self-regulating holons that function both as autonomous wholes and as dependent parts. [9]

Influences and comparable systems

Holacracy, which is an alternative to command-and-control, [10] is one of several systems of flat organization. It has been compared to sociocracy, a system of governance developed in the second half of the 20th century. [11] [12]

Essential elements

In contrast to the governance process, which is collective and integrative, each member filling a role has a lot of autonomy and authority to make decisions on how to best achieve his or her goals. Some have described the authority paradigm in Holacracy as completely opposite to the one of the traditional management hierarchy; instead of needing permission to act or innovate, Holacracy gives blanket authority to take any action needed to perform the work of the roles, unless it is restricted via policies in governance or it involves spending some assets of the organization (money, intellectual property, etc.) [14] Holacracy is highly biased toward action and innovation: it defaults to autonomy and freedom, then uses internal processes to limit that autonomy when its use in a specific way turns out to be detrimental.

Holacracy specifies a tactical meeting process that every circle goes through, usually on a weekly basis. A particular feature of this last phase, known as "triage", is to focus discussions on the concrete next steps needed by the individual who added the agenda item to address his or her issue. [15] The intention is to avoid large, unproductive discussions dominated by the louder voices. [16]

Its developer was described by The New York Times as "a computer programmer with no training in human resources, let alone occupational psychology" and The Wall Street Journal identified the requirement for "every decision must be unanimous" as detrimental. [17] [6] They also reported that "Fifteen percent of an organization’s time is spent in" ($27 billion of them "unproductive") meetings and made mention of Robertson's book. [18] [19]

Contemporary practice

In the U.S., for-profit and not-for-profit organizations have adopted and practiced Holacracy. Examples include Zappos. [17] [20] Medium used Holacracy for several years before abandoning it in 2016. [21] A small number of research projects have reported the use of this style of management within the area of software development who promote its benefits for the search for greater innovation but raise concerns such as lack of usual structures and cultural habits around organising work, but more research is needed. [2] [7] [4]

The New York Times wrote in 2015 that "The goal of Holacracy is to create a dynamic workplace where everyone has a voice and bureaucracy doesn’t stifle innovation." [17] The Wall Street Journal had already asked in 2007 "Can a Company Be Run as a Democracy?" (and conceded that it "sounds like a recipe for anarchy"). [6] The answer reported came when 18 percent of the employees at an online seller which had adopted this "radical self-management system" quit. [22]

Claimed advantages

Various claims have been made in respect of Holacracy. It is said to increase agility, efficiency, transparency, innovation and accountability within an organization, [23] and to encourage individual team members to take initiative and gives them a process in which their concerns or ideas can be addressed. [6] Further that the system of distributed authority reduces the burden on leaders to make every decision and can speed up communications and decision making processes (but this can introduce its own challenges). [4] According to Zappos's CEO Tony Hsieh, Holacracy makes individuals more responsible for their own thoughts and actions. [17]

Criticisms

Steve Denning warned against viewing Holacracy as a panacea, claiming that instead of removing hierarchy, decisions are funneled down from circle to circle in a clear hierarchy, with each subsequent circle knowing less about the big picture than the one above. [24] He also claimed that the rules and procedures are very detailed and focused on "administrivia." [24] Lastly, Denning added that the voice of the customer was missing from the Holacracy model, concluding that for agile and customer-focused companies such as Zappos, Holacracy is a way to add administrative rigor, but that Holacracy would not necessarily work well in an organization that did not already have agility and passion for the customer. [24] HolacracyOne partner Olivier Compagne replied to those criticisms on the company's blog, claiming that Denning's criticisms misunderstand Holacracy. [25]

Problems occur when transitioning to this system, particularly if older systems of management are allowed to become a hidden structure and system of power, in addition to this, individuals' space can become lost within the constant connectedness. [4]

In moving away from Holacracy, Andy Doyle of Medium noted that "for larger initiatives, which require coordination across functions, it can be time-consuming and divisive to gain alignment" and that Medium believed that "the act of codifying responsibilities in explicit detail hindered a proactive attitude and sense of communal ownership". They also noted that the inaccurate media coverage of Holacracy created a challenge for recruitment. [21]

At Zappos, about 14% of the company left voluntarily in 2015 in a deliberate attempt by Zappos to only retain employees who believed in holacracy. [26]

Other criticisms include a "one-size-fits-all" approach, [27] layers of bureaucracy and more psychological weight. [28]

See also

Related Research Articles

A hierarchical organization or hierarchical organisation is an organizational structure where every entity in the organization, except one, is subordinate to a single other entity. This arrangement is a form of hierarchy. In an organization, this hierarchy usually consists of a singular/group of power at the top with subsequent levels of power beneath them. This is the dominant mode of organization among large organizations; most corporations, governments, criminal enterprises, and organized religions are hierarchical organizations with different levels of management power or authority. For example, the broad, top-level overview of the hierarchy of the Catholic Church consists of the Pope, then the Cardinals, then the Archbishops, and so on. Another example is the hierarchy between the four castes in the Hindu caste system, which arises from the religious belief "that each is derived from a different part of the creator God’s (Brahma) body, descending from the head downwards.”

Adhocracy is a flexible, adaptable and informal form of organization that is defined by a lack of formal structure that employs specialized multidisciplinary teams grouped by functions. It operates in an opposite fashion to a bureaucracy. The term was coined by Warren Bennis in his 1968 book The Temporary Society, later popularized in 1970 by Alvin Toffler in Future Shock, and has since become often used in the theory of management of organizations. The concept has been further developed by academics such as Henry Mintzberg.

Empowerment is the degree of autonomy and self-determination in people and in communities. This enables them to represent their interests in a responsible and self-determined way, acting on their own authority. It is the process of becoming stronger and more confident, especially in controlling one's life and claiming one's rights. Empowerment as action refers both to the process of self-empowerment and to professional support of people, which enables them to overcome their sense of powerlessness and lack of influence, and to recognize and use their resources.

A holon is something that is simultaneously a whole in and of itself, as well as a part of a larger whole. In this way, a holon can be considered a subsystem within a larger hierarchical system.

<span class="mw-page-title-main">Centralisation</span> Process by which control becomes more concentrated

Centralisation or centralization is the process by which the activities of an entity or organization, particularly those regarding planning, decision-making and control of strategies and policies, become concentrated within a particular group, sector, department or region within that entity or organization. This creates a power structure where the said group, known as head or core group, occupies the highest level of hierarchy and has significantly more authority, prestige and influence over the other groups, who are considered its subordinates.

Governance is the overall complex system or framework of processes, functions, structures, rules, laws and norms borne out of the relationships, interactions, power dynamics and communication within an organized group of individuals which not only sets the boundaries of acceptable conduct and practices of different actors of the group and controls their decision-making processes through the creation and enforcement of rules and guidelines, but also manages, allocates and mobilizes relevant resources and capacities of different members and sets the overall direction of the group in order to effectively address its specific collective needs, problems and challenges. The concept of governance can be applied to social, political or economic entities such as a state and its government, a governed territory, a society, a community, a social group, a formal or informal organization, a corporation, a non-governmental organization, a non-profit organization, a project team, a market, a network or even the global stage. Governance can also pertain to a specific sector of activities such as land, environment, health, internet, security, etc. The degree of formality in governance depends on the internal rules of a given entity and its external interactions with similar entities. As such, governance may take many forms, driven by many different motivations and with many different results.

A heterarchy is a system of organization where the elements of the organization are unranked (non-hierarchical) or where they possess the potential to be ranked a number of different ways. Definitions of the term vary among the disciplines: in social and information sciences, heterarchies are networks of elements in which each element shares the same "horizontal" position of power and authority, each playing a theoretically equal role. In biological taxonomy, however, the requisite features of heterarchy involve, for example, a species sharing, with a species in a different family, a common ancestor which it does not share with members of its own family. This is theoretically possible under principles of "horizontal gene transfer".

<i>The Ghost in the Machine</i> 1967 book by Arthur Koestler

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Sociocracy is a theory of governance that seeks to create psychologically safe environments and productive organizations. It draws on the use of consent, rather than majority voting, in discussion and decision-making by people who have a shared goal or work process.

A flat organization is an organizational structure with few or no levels of middle management between staff and executives. An organizational structure refers to the nature of the distribution of the units and positions within it, and also to the nature of the relationships among those units and positions. Tall and flat organizations differ based on how many levels of management are present in the organization and how much control managers are endowed with.

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References

  1. ↑ Rudd, Olivia (April 24, 2009). Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy. John Wiley & Sons.
  2. 1 2 3 4 5 Liebert, Filip (2020). "Holacracy as a new approach to new product development in it industry – case study". Zeszyty Naukowe. Organizacja i Zarządzanie / Politechnika Śląska. z. 145 (145): 279–296. doi: 10.29119/1641-3466.2020.145.21 . ISSN   1641-3466.
  3. ↑ Röll, Juliane (2015). "Organisations running on Holacracy". structureprocess.com. Retrieved July 8, 2020.
  4. 1 2 3 4 Schell, Sabrina; Bischof, Nicole (2021). "Change the way of working. Ways into self-organization with the use of Holacracy: An empirical investigation". European Management Review. 19: 123–137. doi:10.1111/emre.12457. ISSN   1740-4762. S2CID   235533720.
  5. ↑ Vue cavalière sur la mignonette, by Jean Ferry. Publications Secrêtes du Collège de 'Pataphysique (L'Hexaèdre ed.). Paris. 2020. p. 148. ISBN   978-2-9192-7118-4.{{cite book}}: CS1 maint: location missing publisher (link)
  6. 1 2 3 4 Jaclyne Badal (April 23, 2007). "Can a Company Be Run as a Democracy?". The Wall Street Journal .
  7. 1 2 Bhandari, Rabin; Colomo-Palacios, Ricardo (July 2019). "Holacracy in Software Development Teams: A Multivocal Literature Review". 2019 19th International Conference on Computational Science and Its Applications (ICCSA). pp. 140–145. doi:10.1109/ICCSA.2019.00013. ISBN   978-1-7281-2847-4. S2CID   203655347.
  8. ↑ Arthur Koestler (1967). The Ghost in the Machine. Pan Books. ISBN   978-0-3302-4446-6.
  9. 1 2 Koestler, Arthur (1967). "The Ghost in the Machine". Psychiatric Communications. 10 (2). Penguin Group: 45–8. PMID   5735264.
  10. ↑ Nick Rockwell (July 16, 2018), "Talking Technology: Aaron Dignan and Spencer Pitman", The New York Times , retrieved December 8, 2022
  11. ↑ Steele, Robert David (June 5, 2012). The Open-Source Everything Manifesto. North Atlantic Books. p. 47.
  12. ↑ "Holacracy and Sociocracy". adeeperdemocracy.org. 2010. Retrieved January 9, 2014.
  13. ↑ Röll, Juliane (2014). "Energizing Project Roles (Holacracy Basics, Part 1)". structureprocess.com. Retrieved July 8, 2020.
  14. ↑ Work, Daniel (2015). "Part 2: Permission Cultures". Medium . Retrieved May 29, 2015.
  15. ↑ Compagne, Olivier (2015). "One Thread at a Time". medium.com. Retrieved May 29, 2015.
  16. ↑ Meade, Kristy (2015). "Holacracy: A Step Toward Equality". medium.com. Retrieved May 29, 2015.
  17. 1 2 3 4 David Gelles (July 17, 2015). "At Zappos, Pushing Shoes and a Vision". The New York Times . Retrieved December 7, 2022.
  18. ↑ {{cite book title=Holacracy: The New Management System for a Rapidly Changing World |author=Brian Robertson |year=2015 |publisher= Henry Holt & Company |isbn= 978-1-6277-9429-9}}
  19. ↑ Virginia Heffernan (February 25, 2016), "Meet Is Murder", The New York Times , retrieved December 8, 2022
  20. ↑ Groth, Aimee (December 30, 2013). "Zappos is going holacratic: no job titles, no managers, no hierarchy". Quartz. Retrieved December 31, 2013.
  21. 1 2 Doyle, Andy (2016). "Management and Organization at Medium".
  22. ↑ David Gelles (January 13, 2016). "The Zappos Exodus Continues After a Radical Management Experiment". The New York Times . Retrieved December 7, 2022.
  23. ↑ James, Michelle (2012). Navigating the New Work Paradigm. Center for Creative Emergence.
  24. 1 2 3 Denning, Steve (January 15, 2014). "Making sense of Zappos and Holacracy". Forbes . Retrieved February 21, 2014.
  25. ↑ Compagne, Olivier (January 21, 2014). "Holacracy Is Not What You Think". HolacracyOne's Blog. Retrieved February 21, 2014.
  26. ↑ Groth, Aimee (January 13, 2016). "Zappos has now lost 18% of its employees to its radical buyout offer". Quartz. Retrieved December 30, 2016.
  27. ↑ Culen, Julia (April 3, 2016). "Holacracy: not safe enough to try" . Retrieved December 30, 2016.
  28. ↑ Groth, Aimee (December 21, 2016). "Zappos is struggling with Holacracy because humans aren't designed to operate like software". Quartz. Retrieved December 30, 2016.
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