Holacracy the New Organizational Governance for a Rapidly Changing World
I like to think the shift from traditional organizational governance and practices is happening because some people are getting smarter. They understand that authority and decision-making policies should be distributed throughout self-organizing teams rather than at the top of a hierarchy. Today, holacracy has been adopted by numerous companies to create effective working environments where people have the opportunity to voice their ideas, to take decisions and see them considered. We also try to adopt it but it not always easy.
Why isn’t it working anymore?
I don’t think anyone can expect that traditional organizational governance is going to work forever. Thanks to technology (IT) and how mobile everything is becoming, there are fewer barriers in place and people are capable of much more than they were before the internet, behaviours are also changing. This fast moving world is also asking companies to be more innovative and agile. This is why I think old management systems don’t work anymore. People can do so much more and old structures and rules stifle them too much. Research has shown that hierarchical management:
- Reduces human creativity
- Generates conflict
- Blocks employees from success
- Reinforces elitism, privilege and bureaucracy
If you’re one of those people who like ‘the old boys’ club at work, then that’s fine. But you’re not going to be able to keep up with all the startups bursting onto the scene full of innovative ideas and business models.
So how does Holacracy works?
As I told you old management systems are reaching their limits, but flat management systems are not effective because they lack rigor. Holacracy on the other side brings rigor (structure), adgility and discipline in a collaborative workplace.
While running a holocratic organisation you have to remove the power from the management and spread it across clear roles that can be executed autonomously (without a boss supervision). It’s very important to set rules and procedures to explain how teams should divide the work, the roles and the responsibilities.
So what can holacratic organizational governance do?
If you’re looking for a good, solid reason to switch your organizational governance, just take a good look at the tech and IT industry. Some companies inspired by Agile software development principles and the Lean manufacturing process have loose and interconnected teams working on different projects all at the same time. They have adaptive processes, rapid itérations, distributed authority, self-governing management systems whith dynamic roles . This is why they can churn out so many new things. The lack of rigidity also lets motivation, ideas and innovations flow freely.
Self-managing teams that adhere to holacratic organizational governance are also cheaper and easier to maintain. Instead of a top-down hierarchy, there’s a flatter “holarchy” that distributes power and authority more evenly. You don’t have to pay a middle manager to keep everyone in line. You may still need a project manager to keep everyone on track but it should be only a facilitating and coordinating role.
Zappos known for his original corporate culture has already implemented this way of working. The company is made of 400 different circles and employees can have any number of roles within those circles. According to Alexis Gonzales-Black, who is leading the transition to Holacracy at Zappos: “One of the core principles is people taking personal accountability for their work. It’s not leaderless. There are certainly people who hold a bigger scope of purpose for the organization than others. What it does do is distribute leadership into each role. Everybody is expected to lead and be an entrepreneur in their own roles, and Holacracy empowers them to do so.” Source Aimee Groth.
That’s awesome; now tell me how to set it up!
If you’re just setting up your business, then you can immediately implement a holacratic management style. If you have something else in pace, however, be ready for an uphill battle. Nonetheless, here are some policies to employ:
1 – Create a culture that values the right principles, ethics and strategies.
You can’t expect people to embody innovation and manage themselves if they don’t know how to be accountable. Part of being holacratic is being responsible for your actions and decisions. Your staff has to realize that you’re giving them freedom; they better do something productive with it. It’s not just for you, but for their own personal fulfillment.
2 – Create shifting, changing circles that respond to roles/tasks that comes up.
You can assign people to meet specific situations but make the response a team effort. Roles are defined around the tasks that comes up. Everyone can and should come up with ways to solve problems and grab opportunities. Your organizational governance should reflect the fact that you’ve created a system where everyone mobilizes when there is a need.
3 – The leaders you choose should be able to help different teams reach their full potential.
Good leadership is no longer equal to good management. If you plan to install managers, make sure that they know their job is to mentor, facilitate and coordinate between different teams. They don’t have authority on people they are here to help, coach and mentor people to take the right décisions.
4 – Your business and work processes should be based on democracy and collaboration.
Don’t fall into the trap that all the traditional businesses have fallen in. Give your staff power to make decisions but in a democratic way.
5 – Your teams should be agile, innovative and independent.
Self-management frees up a lot of resources to devote to other businesses processes. You don’t have to hire a person to purely manage the team. That person can just be a facilitator or coordinator who also has other duties. This role should regularly update and adapt the way the team are self-organizing.
Putting in place a system that allows your staff freedom to pitch, enact and fail without fear gives birth to a host of innovations and proactivity. It’s up to you to accept that this is the way management is going or be left behind with lackluster employees.
Here is an other article on ZAPPOS Creative Corporate Culture
Here are few points I have learned trying to implement Holacracy into our company:
- some people are not ready to work like this, they like the old management style
- difficult to use for people that are still in a Learning & development phase. They have to learn the technical side of their role and to self-organize them.
- it’s a step by step process. Don’t change all your rules. You need to test them and see how it works.
- managers should have the same vision as you. Remember they will lose authority and power.
- HR & Legal has to adapt: today each person has a job title and with Holacracy roles are defined around the work. There could be some legal issues related to the contract and job description people were recruited for.
Please share this insight to inspire people to work with more passion and lead with creativity. It’s free like this ad free article. Thank you