What Is Holacracy?
Let me explain Holacracy directly: it's a system of corporate governance where you and your team members form distinct, autonomous teams that work symbiotically to get tasks done and meet company goals. You discard the old corporate hierarchy and adopt a fluid structure instead, where everyone can make key decisions in their own areas of authority.
Key Takeaways
Understand this: Holacracy is self-management without the traditional hierarchy of command for leadership roles. You don't stick to a static job description; instead, you take on multiple roles, each with a purpose, domain, and accountabilities. You get broad authority to decide within your role, as long as you don't violate prior rules. Any issues that come up get addressed in regular governance meetings.
How Holacracy Works
Holacracy replaces the rigid command structure with flexible roles, each having wide authority in their responsibility area. Think of it as nested circles instead of a pyramid—each circle is an autonomous team with various roles. You might hold several roles, each with a specific purpose, domains, and accountabilities. Even the CEO could lead one team and follow on another. Conflicts get sorted in governance meetings within each circle.
As a role lead, you're empowered to make decisions without checking up the chain. This follows what we call the golden rule of Holacracy: to fulfill your role, you have full authority for any decision or action, provided no rule prohibits it.
Important Note
Holacracy eliminates top-down management and hands more control over processes to individuals and teams like yours.
Origin of Holacracy
The term holarchy comes from Arthur Koestler's 1967 book 'The Ghost in the Machine,' describing connections between holons—units that act independently but depend on the larger organization. Brian Robertson built on this while running Ternary Software in the early 2000s. In 2007, he and Tom Thomison founded HolacracyOne and released the Holacracy Constitution in 2010. Companies like Zappos.com have adopted it publicly.
Fast Fact
Zappos.com, with 1,500 employees, stands as the largest company to implement Holacracy.
Examples of Holacracy
Zappos.com, an online retailer for clothing and accessories with over 1,500 employees, is the biggest example of integrating Holacracy. They say it lets every employee quickly respond to customer feedback. HolacracyOne lists about 185 organizations using these principles, including Liip in Switzerland, Springest in the Netherlands, and Mercedes-benz.io.
Special Considerations
Critics call Holacracy hype or just another tech buzzword. When Zappos adopted it, nearly one in five employees took severance and left, many blaming Holacracy. Some companies, like Medium which started in 2013, dropped it after three years, saying it hindered work. Note: A prior version mistakenly listed Valve as an example, but that's corrected now.
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