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As the cofounder of HP Dave Packard once said, “More companies die of indigestion than
starvation.”1 Organizations sense and take in much more than they effectively process and digest.
Organizations have very little capacity to evolve and adapt.
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How can we reshape a company into an evolutionary organism—one that can sense and adapt and learn and integrate? In
“Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15 percent. But when companies get bigger, innovation or productivity per employee generally goes down.”
As the business writer Gary Hamel puts it, “Give someone monarch-like authority, and sooner or later there will be a royal screw-up.”
Consensus didn’t accomplish that. In fact, all it resulted in was long painful meetings where we would try to force everyone to see things the same way. That isn’t helpful or healthy, and it only gets worse as an organization grows.
So consensus doesn’t scale well at all, and such impractical quantities of time and energy are required to reach a decision that the system gets bypassed more often than not. This leaves consensus-based organizations with the same problems as those organizations with no explicit structure. Even when consensus is achieved, the result is often a watered-down group decision that becomes very difficult to change, saddling would-be innovators with less-than-ideal entrenched structures to navigate. While consensus-based approaches are often motivated by a genuine desire to embrace and honor more
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This shift from personal leadership to constitutionally derived power is essential to Holacracy’s new paradigm. Even with the best of intentions and great leaders, a top-down authority system leads almost inevitably to a parent-child dynamic between the boss and the employee.
The workers realize that they are no longer just employees following orders. They have real power and authority—and with those comes responsibility. They no longer have a parentlike manager to solve their problems. The managers, on the other hand, often feel liberated from the burden of management, but have to find a new sense of their own value and contribution, and shift how they’re accustomed to using and holding authority.
Holacracy thus takes some of the organizational design functions that traditionally reside with a CEO or executive team and places them into processes that are enacted throughout the organization, with everyone’s participation. This governance process distributes authority and clarifies expectations throughout an organization, and is driven by those doing its work and sensing tensions
When parents let go of their own personal dreams for their children, they create space to find out what those children were really born to do—what creative impulse is waiting to express itself through each child.
Holacracy is not a governance process “of the people, by the people, for the people”—it’s governance of the organization, through the people, for the purpose.
When we distribute authority, as discussed in the previous chapter, we distribute it not to individual humans, but to the roles that they fill.
When the responsibilities attached to a role become too much for one individual to carry, that role may further need to break itself down into multiple sub-roles, becoming a “circle.”
Because Holacracy is all about organizing the work, not the people, it leaves quite a bit of freedom for the people to self-organize around what roles they fill. Instead of getting organized as single nodes in the corporate hierarchy, people are left to act more like free agents, able to shop around and accept role assignments anywhere in the organizational structure, including filling several roles in many different parts of the organization at once.
To facilitate clear and concrete role definitions, the Holacracy constitution defines a role as consisting of three specific elements: a “purpose” to express; possibly one or more “domains” to control; and a set of “accountabilities” to enact. Some roles will have all three of these parts, though often roles will start out with only a purpose or just a single accountability and evolve from there. A purpose tells us why the role exists: what it aims to achieve. A domain (of which there may be several) specifies something the role has the exclusive authority to control on behalf of the
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Holacracy’s rules and processes will force you to face the question: “Is this an explicit accountability of her role, or is it your implicit expectation?”
So a circle that behaves as if it were fully autonomous will harm the system, just as a cell in the body that disregards the larger system becomes cancer.
Holacracy moves from structuring the people to structuring the organization’s roles and functions.
circle is not a group of people but a group of roles, and it is also, in a sense, a really big role itself, with a single cohesive purpose to express, some accountabilities to enact, and possibly some domains to control. The roles a circle contains are a breakdown of what’s needed to express its overall purpose, enact its accountabilities, and control its domains. A circle has the autonomy and authority to self-organize and to coordinate and integrate the work of all the roles it contains. This self-organization happens in the circle’s governance meetings,
It is not the lead link’s job to direct the team, or to take care of all the tensions felt by those in the circle. As a lead link, you are not managing the people; you are representing the circle as a whole and its purpose within the broader environment of the organization. The best metaphor I’ve found for the lead link role is that if the circle is a cell, the lead link is the cell membrane. As lead link, rather than directing the action, you hold the space within which the purpose of the circle can be fulfilled,
You also act as an interface at the circle’s boundary when needed, routing incoming information or requests to appropriate roles, and bringing resources into the circle and directing them to the most important functions, roles, or projects within the circle. You are on alert for any lack of clarity in the circle around what role handles what work and makes what decisions, and you work to achieve that clarity through the governance process. In a new circle, the lead link role is an entrepreneurial role—you’re actively building a structure to achieve a purpose, and you will need to try different
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A lead link may be able to remove someone from a role, but she has no authority to fire someone, determine compensation, or define new roles and expectations for people outside of the governance process.
The role of rep link also serves a key function for every circle, and it’s not just a “second” link, but a different function from the lead link altogether. If the lead link is mostly a membrane around the cell, the rep link is a direct channel from within the core of the cell out through that membrane. He or she provides rapid feedback from the perspective of someone who really knows what’s going on at “street level,” and it’s the rep link’s accountability—not the lead link’s—to channel tensions out into the broader circle if they are seen to be limiting a sub-circle and can’t be resolved
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on the road, you wouldn’t be free to let your mind wander and be creative while you drive. You’d be too busy hoping no one hits you. But if there were too many lanes and restrictions and rules, you’d have traffic moving much slower than it should, as everyone was trying to pay attention to the right place to be.”10
Another way to phrase the question would be “Does anyone see any reason why this isn’t safe enough to try, knowing we can revisit the decision if it doesn’t work?
Roles versus People. When you’re assigning actions or projects to a member of your team, try referring to those actions or projects as being assigned to the particular role that person is filling. This helps to decouple the often fused “role and soul” and thus to defuse the tensions that sometimes arise out of that conflation.
Try the approach Gonzales-Black of Zappos took: encourage your colleagues to ask themselves, “What would I do if this were my business?”
we take on a peer-to-peer relationship rather than a codependent parent-child dynamic. We show up as partners, each responsible
“Holacracy helped us transition from a culture where everything relied on specific people to one where things rely on roles and practices.”
Holacracy is not about the people. This is one of the aspects of the practice that people have the hardest time swallowing, but it’s fundamental. Holacracy doesn’t try to improve people, or make them more compassionate, or more conscious. And it doesn’t ask them to create any specific culture or relate to each other in any particular way. Yet precisely by not trying to change people or culture, it provides the conditions for personal
Seeking people’s consent or reaching consensus is not the required threshold for decisions to be made in a Holacracy governance meeting, and its nuanced rules will actually prevent that focus from intruding at all, or will quickly discard it if it does.
Holacracy allows the organization to function optimally however we humans decide to relate to one another personally.
