Defined as ‘bossless’ holacracy is a relatively new way of running organisations, which promises agility and adaptability without resorting to politics or painful meetings. Until not long ago, little information existed to help researchers and practitioners examine its impact on business. However today, new analysis and documentation is shedding fresh light.
Will this (r)evolutionary approach to work take off? Can it really help us going through significant changes?
For Co-Founder of Evolving Organisation Nick Osborne, the answer is yes. Osborne is currently the only Certified Holacracy Facilitator in the UK. Recently he ran a workshop at The Impact Hub Westmister in London, where I met and talked with him. I wanted to find out what makes this practice special – or controversial – depending on your view. It is well known that successful organisations such as Zappos want to adopt it, while others are rejecting it entirely. I wanted to put the hype to one side, and discover whether holacracy really has a place in 21st century enterprises.
Holacracy – social technology for purposeful organisations
Spring 2012. Osborne had been studying and working with The Integral Model for many years when he stumbled across Holacracy thanks to his network. “It was the Waking up the Workplace series of interviews. Those were global conversations to awaken a world of conscious business.”
It was at about that time when he also heard that HolacracyOne had a strict Certification and Licensing programme to quality assure the practice of facilitating and coaching around Holacracy.
In fact, Osborne likes to clarify that he is not yet a Certified Holacracy Coach. “I am a Certified Holacracy Facilitator. I am in the process of taking my assessment to be certified as a Coach. To get experience I have been doing informal and unpaid coaching.” He hopes to be certified as the first Holacracy Coach in the UK in a few months.
Osborne claims that Holacracy contains many of the best practices that we can find in collaborative approaches, such as “increasing participation, engagement and finding ways for people to be heard.” But at the same time, the management practice retains some important elements of hierarchy, including clarity of decision-making, authority and clear accountabilities, which can easily get lost with more collaborative approaches.
As Osborne puts it, “Holacracy is a system that combines the elements of both hierarchy and a more collaborative approach, which fit the best in today’s world. It synthesises them into a new and different kind of system altogether.”
What’s different about Holacracy?
Osborne has been working with collaborative methods as well as participatory ways of running organisations for nearly 20 years. Over this period he has collected more tools and processes than he cares to remember.
“For people wanting an alternative to hierarchy, there is a mind-boggling variety of different methods to work with. Many people and organisations use a pick and mix approach to create a combination that fits their organisation and culture.”
This can be appropriate for people who want to work collaboratively while choosing a combination of tools to fit with their own culture, values and members. To help with these choices Osborne has produced a series of short and entertaining animations called Self-Organisation Beyond Hierarchy, which also describes the distinction between hierarchy, collaborative and agile approaches.
Some of the tools that can be used with the pick and mix approach are also included in the Conscious Collaboration trainings that he delivers along with Psychotherapist Justine Corrie. These combine inner/personal dimensions of what happens in groups, Mindfulness along with group processes such as blended decision-making, gradients of agreement and conflict management; others can be found in Frederic Laloux’s book ‘Reinventing Organisations‘.
However, Holacracy has a different approach entirely. “It’s a like a pre-packaged system, which comes with a set of rules defined in the Constitution.”
There are different types of meetings, each with their own pre-defined process. And, it also invites a dynamic steering “to enable organisations to adapt in a fast-changing and complex world; so it fosters the evolution of more agile organisations.”
The Holacracy Constitution uncovers a minimum set of rules required to work on a foundation of distributed decision-making while leaving room for creativity, innovation and adaptability.
Probably the simplest way to describe it is in terms of a game. “If you think of how most organisations work today, there are some explicit rules in policies and guidelines. But also, most of the ways that things are done are implicit, taken for granted, assumed and expected. These implicit expectations often lead to misunderstandings, interpersonal difficulties, politics and conflict. It is hard to play a game well if people have different understandings of the rules of the game.”
By contrast, within the Constitution all the rules are written down for everyone to see. “Everyone is subject to the same rules, including making all the expectations explicit.”
It is said that adopting Holacracy will bring about a paradigm-shift in how organisations work.
That is an iconoclastic statement, but what does it actually mean? “It is hard to describe in abstract terms without experiencing it. But it’s a shift in the very foundations of how power works in an organisation.”
In Holacracy the power is distributed in a way that fosters leadership in everyone in their roles, and within a framework of clear accountability.
There are other systems that decentralise the power of hierarchy. For example, the Viable Systems Model, Sociocracy, Adhocracy and Wirearchy. Yet, Osborne thinks that Holacracy is the most rigorous and cohesive as well as the best fit for today’s fast-changing and complex world. “This foundation of the distribution of authority and leadership enables faster, more responsive decision-making and better ways to harness the individual and collective creativity and genius, which are so often stifled in organisations.
“Meetings are reported as being more effective and satisfying, employee motivation and engagement increases and absenteeism decreases.”
Another key element he appreciates in Holacracy is that it supports people in taking personal responsibility, “fostering more conscious organisations.” Ultimately, all the above factors help to “improve social, economic and environmental productivity, as well as value-creation and sustainability in organisations.”
Zappos and beyond
Zappos is the most popular, largest and best documented example of a company who has adopted Holacracy. However, in December 2013 the number of organisations claimed to be using it was already around 500.
Osborne himself is applying this practice inside his own company Evolving Organisation. It has been an interesting journey so far and he believes that it can be beneficial for many more organisations. This is especially true if we think of it in terms of the development of social technology.
“Hierarchy is well-suited to an environment which is relatively simple and stable – few people at the top can see and know enough to be able to make good decisions on behalf of the whole organisation.”
However, as the environment becomes complex, it is almost impossible for a few at the top to see, know, understand and process all the diversity and complexity in their environment to make good decisions. Indeed, “many other people in the organisation are sensing a much wider range of diverse information than in a more simple environment. It is almost impossible for this to be processed through a conventional hierarchy.”
That is the reason why Osborne encourages the use of more inclusive, participatory and collaborative ways of working, which can integrate multiple perspectives. “We are seeing a shift away from hierarchy towards more collaborative approaches. This also expresses cultural shifts around placing more importance on relationships and connections in a networked world.”
Osborne suggests that whether the pick and mix approach of different collaborative methods or the adoption of Holacracy is a better fit for your organisation, depends on your existing culture, values, personalities and power structure. There is no single solution – it is about finding out what fits best for your situation.
Ultimately, when either of these practices are done well, it leads to more satisfying and nurturing workplaces.
But, don’t be tempted to make risky jumps; it might be prudent to do some training first. Osborne says, “unless these approaches are done with skilled facilitation to swiftly integrate the multiple perspectives, organisations can get swamped in lengthy shared decision-making processes.”
Surely, such talking shops are the last place we all want to work.
Is Holacracy for you?
How people work and communicate with their colleagues is an area of intense debate. Increasingly, as people are demanding alternative ways to operate, organisations are seeking to apply innovative solutions. Whether Holacracy combines the best – or the worst – of hierarchies versus collectivism is a moot point.
There might be a place for Holacracy inside some businesses, but we know that one size no longer fits all. Osborne suggests that “You may well find out that Holacracy is not for you.” Perhaps the challenge is to be flexible enough to experiment and work out if this practice can be a good fit for your company. What is certain is that Holacracy is not a free-for-all like many people seem to think it is. Rather it has many rules just like a command and control approach to management; “but the rules of Holacracy create different kinds of organisation than the ones we are used to.”