Organisations try different methods, management gurus come up with new theories & social scientists experiment to figure out what exactly makes teams work with hyper productivity & intense focus. Holacracy is one such experiment, a recent one at it. Holacracy, although not entirely established, certainly has intrigued many a minds.
Recently in an HBR article titled ‘Beyond the Holacracy Hype’, its co-authors explained about how the concept originated and whether it shall be widely adopted. The article points out the pros and cons associated with holacracy as well as shares measures for how to make the most out of it in the most efficient manner.
But What is Holacracy?
Holacracy is a new way of running an organization that removes power from a management hierarchy and distributes it across clear roles. The work can then be executed autonomously, without micromanagement.
The idea here is to replace the top down approach and distribute authority across the organisation. According to Holacracy.org, Holacracy is a comprehensive practice for structuring, governing, and running an organization.
Who introduced it?
Holacracy as a concept was introduced by Ternary Software founder Brian Robertson in 2007. It has been compared to Sociocracy, a system of governance developed in second half of the twentieth century.
How does it differ from traditional hierarchy?
Every individual in the organisation has a very specific job description according to traditional hierarchy. Throughout the year, all tasks are allotted based on this description which is rarely updated. Often it fails to take into consideration the changing needs of the organisation.
In holacracy, roles are regularly updated and defined around people and not the work they need to perform. Roles follow a clear format including a name, a purpose, optional “domains” to control, and accountability, which are ongoing activities to perform. Individuals can take on multiple roles and thus perform a host of tasks as per their capabilities.
Delegated authority vs Distributed authority
In a traditional hierarchy, managers delegate authority to their team while holding some of it in their own hands. Thus, while the team members do take certain decisions on their own, more often than not, it is their managers who can either approve or disapprove these. This appears superficial as despite having authority, certain validations are always required.
Distributed authority is properly distributed among the team so that all decisions can be made locally in the absence of hierarchy. This helps to reduce the time that would otherwise have been wasted with the need for multiple approvals.
Big reorganisations vs Rapid iterations
Organisational structure follows a top down approach and once defined, it is rarely revisited. It is not easy to keep on changing this structure even though it may have become too rigid. While there are merits to this, reorganisation does take huge efforts and excessive time.
Since an hierarchy doesn’t exist in holacracy it is easy to regularly update and make rapid iterations to ensure optimum efficiency. All teams are self-dependant and hence do not take a lot of time to execute tasks or take decisions.
Office politics vs Transparent rules
There are so many rules and regulations that it can get difficult to bring changes in the organisation without support from the top management. In such cases, only those who have a good rapport with the top are able to put forth and implement the ideas. Office politics are the reason better ideas have suffered just because employees weren’t properly ‘connected’ with the right authorities.
In a holacracy, right from the CEO to the newest intern, everyone is bound by the same rules. Rules should be transparent to one and all so that no is exploited and there is no scope for office politics.
Who is implementing it?
One of the biggest companies, Zappos has been using Holacracy for approximately 3 years now. While CEO Tony Hsieh has admitted that initially they did struggle, to get everyone on board. It came to a point where he offered an ultimatum to 4000 employees to either accept Holacracy or leave the company. The severance package was quite attractive and as such 18% of these chose to leave out of whom 6% cited Holacracy as the reason.
Will it be successful?
Holacracy is still at a stage where it is not clear whether it will become a widespread phenomenon, largely due to the confusion surrounding it. While there are certain buzz words that sound attractive such as ‘flat structure’ or ‘boss-less’, there is still ambiguity amongst everyone about their roles. Social media company Medium, recently dropped holacracy stating that “it was difficult to coordinate efforts at scale”.
What do you think would be more efficient, your co-workers more engaged? Holacracy or traditional and proven hierarchy?