Holacracy: The Revolutionary Management System that Abolishes Hierarchy

by Brian J. Robertson

the human body weren’t a distributed-authority system, with the various cells, organs, and systems each holding clear autonomy, authority, and responsibility, the conscious mind would have a huge management burden. But because our conscious energy is not needed for the moment-to-moment decision making of our physical functioning, it is freed up to engage with all the extraordinary creative endeavors that define human culture.

There’s a technical term for the process by which we assign power or authority in an organization: “governance.” In most organizations running without Holacracy, there may be some explicit governance performed at the very top or set out in the bylaws, but otherwise little conscious attention is given to defining clear authorities and responsibilities.

an ongoing process that happens on a team-by-team level in special “governance meetings.”

journey to express the organization’s purpose.

what governance does exist is often irrelevant and ignored (for instance, the typical “job description”), with no clear process for dynamically updating it. Yet governance clarity that maintains its relevance is deeply powerful. It answers questions such as: What are the ongoing activities we need to pay attention to, and who will own each? What expectations can I reasonably hold of others, and vice versa? Who will make which decisions, and within what limits? What decisions can I make and what actions can I take without having to call a meeting? What policies or constraints will we honor in our work together? How can we change the answers to these questions as we learn better ways of working together?

When any group of people comes together to accomplish a specific task or mission, such questions come up. Even if we don’t discuss them, we make assumptions about the answers. Just watch a group of children playing a game: implicit governance defines the rules, roles, and parameters within which they play. In many situations, implicit governance works just fine—until, for some reason, it doesn’t work anymore. Perhaps implicit assumptions conflict, or perhaps someone wants to evolve the historically operating norm to integrate some new learning. Whenever there’s a need to align or evolve implicit norms and assumptions, an explicit governance process can be transformative.

When we effectively distribute power to those on the front lines, we dramatically enhance an organization’s capacity to harness input and capture learning—thus solving a problem many leaders struggle with as their companies grow.

but I felt like I was getting less and less of them as the company got bigger. Part of that was because they had ideas or concerns or perspectives that were relevant outside their particular area, but it wasn’t clear what to do with those.”7

“As the person sitting up at the top,” he told me, “I barely had the bandwidth to make a small portion of the decisions floating up to me. So either I wasn’t available to make those decisions, or I couldn’t do so responsibly.”

It’s a lot easier and safer to execute quickly and autonomously and get the work done when you know exactly what authority you have, what’s expected of you, and what limits you need to honor, and when you have a process to update this knowledge as learning happens or the environment changes.

will ask each person to share his or her deepest hopes, dreams, ambitions, and desires for the organization.

It’s always a powerful moment, filled with authenticity and inspiration, as those present share what they most want to see the organization do and be in the world. And then I’ll say, “Let me point out the biggest obstacle to uncovering the purpose of this organization. It’s everything you just said—your hopes, desires, and so on.”

When we attempt to force our visions upon them, we resist this reality—often to the detriment of both parties, and definitely to the detriment of the relationship. I find the same is true of our organizations and their relationship with founders, leaders, and other stewards.

That’s what I mean by its purpose or raison d’être—its reason for being. This isn’t necessarily the purpose that we founders or leaders want for the organization, although it’s typically seeded by the founders—in a company’s

what does this organization want to be in the world, and what does the world need this organization to be?

Getting there was a process of discovery: we did not decide on this purpose, we discovered it.

I say “discovered” rather than “decided” because getting clear on purpose is more like detective work than like creative work. What you are looking for is already there, waiting to be found—it is no more a decision than your child’s purpose is. Simply ask yourself: “On the basis of our current context and the resources, talents, and capacities at our disposal, the products or services we offer, the history of the company and its market space, and so on, what’s the deepest potential it can help create or manifest in the world? Why does the world need it?”

Governance is about how we structure the organization and its roles to best express that purpose, and operations is about using that structure to bring about that purpose in the world.

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.

traditional pyramid-shaped management hierarchy is one structural option, but it’s often far less than ideal for enabling distributed authority and evolutionary design.

the organizational theorist Elliott Jaques particularly helpful and clarifying. He identified three distinct types or meanings of “structure” that can be useful in any organization. First, there is the “formal structure”—the org chart and the job descriptions.

The formal structure in most organizations is far removed from real day-to-day events and needs, so that job descriptions are little more than formalized bureaucratic artifacts. In many cases, they are out-of-date and irrelevant by the time they roll off the printer.

When the organization’s formal structure offers little practical guidance, we humans, as the creative beings we are, work around it to get the job done. This gives rise to what Jaques calls the “extant structure.” This is the structure that is actually operating—the

creating an implicit structure that becomes the unconscious “way things are done.”

the “requisite structure,” which is the structure that would be most natural and best suited to the work and purpose of the organization—the structure that “wants to be.”

we defined a tension as a gap between what is and what could be—a sensed potential that would somehow be more ideal.

we’re sensing a gap between the extant structure (what is) and the requisite structure (what could be).

So while we do have a formally captured structure in Holacracy, it is continually being refined and modified in response to tensions sensed by individuals as they go about their daily work, to reflect our best understanding of how we need to organize to most effectively get the work done.

Consequently, in a Holacracy-powered organization, people do refer to their own and others’ job descriptions regularly, sometimes on a daily basis—because job descriptions contain relevant, accurate, clear, and useful information about what it makes sense to do and expect. This means that the way we actually work together (the extant structure) more closely reflects what’s documented (the formal structure), which more closely reflects what’s best for the organization (the requisite structure). Thus, these three structures become one and the same—at least for a time, until another tension is sensed, and this evolutionary process must continue.

in Holacracy, “structure” is not fixed or solid, but continu...

The type of structure used for organizations in Holacracy is not a traditional hierarchy, but a “holarchy.”

He defined a “holon” as “a whole that is a part of a larger whole” and a “holarchy” as “the connection between holons.” Those may be strange and unfamiliar terms, but they describe something very familiar. Your own body is an example of a holarchy. Each cell in your body is a holon—both a self-contained, whole entity and a part of a larger whole, an organ. In the same way, each organ is itself a self-contained whole yet also a part of a larger whole—your body. That series of nested holons—cell to organ to organism—is an example of a holarchy.

These holarchies simultaneously honor autonomy and enable self-organization at every level within. This is the kind of structure that Holacracy uses, and it’s the root of the term itself: Holacracy means governance (-cracy) of and by the organizational holarchy (hola-).

When we consider a company through this lens of holons and holarchies, we might assume human beings were the smaller holons in the organizational system, embraced by larger holons of teams, departments, and so on. But human beings are not fully contained “parts of a company” the way cells are parts of an organ. Rather, we are separate autonomous entities who choose to show up and “energize” an organization’s functions, organized in various “roles.” Those roles are parts of the company, and are the most basic building block of Holacracy’s structure.

When we distribute authority, as discussed in the previous chapter, we distribute it not to individual humans, but to the roles that they fill. Particular roles are invested with the authority to carry out certain tasks and pursue particular aims. When the responsibilities attached to a role become too much for one individual to carry, tha...

Because Holacracy is all about organizing the work, not the people, it leaves quite a bit of freedom for the people to self-o...

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 seve...

Consider your experience in a conventional organization: to whom are you accountable? The traditional answer is “my boss” or “my manager,” but of course there are many others who count on you—your coworkers, your customers, perhaps investors or other stakeholders. A much more useful question is “What are those people counting on you for?” Each of the parties has different specific activities they are counting on you to own and to effectively manage, and clarity about these accountabilities is critical to the smooth running of an organization.

More often than not this remains implicit. If things are running smoothly and our expectations are in alignment, then that’s just fine. But too often, different people have different ideas about what each of them ought to be owning and doing, and this lack of clarity leads to all sorts of interpersonal friction and politics.

WARNING SIGNS Do any of these symptoms show up in your organization? If so, you may be suffering from a lack of clarity around roles and accountabilities. mistrust and frustration between coworkers critical tasks being “missed” lots of meetings with much discussion to reach consensus on things emails flying around with many people cc’d, often for unclear reasons people check in with everyone before making decisions, and expect that others will too people have lots of ideas about what “we” should do … but “we” doesn’t do it

When we have different expectations of each other, important tasks are dropped and everyone’s frustrated. We feel let down by each other, we feel unfairly blamed, we mistrust, or we overstep our own roles in order to compensate, treading on other people’s toes. No number of trust-building or team-building exercises can fix these problems, because these are often much less personal than they may feel—they result not from personal betrayal, mistrust, or insensitivity, but from a misalignment in our understanding of what we can count on each other for.

They are a symptom of lack of clarity. To get to clarity, we must first let go of the idea that others should align with our implicit expectations (or anyone else’s). This requires an effective governance process, whi...

The Holacracy governance process generates clarity by defining explicit roles with explicit accountabilities, which grant explicit authority, and then continuously evolves these definitions to integrate learning and align with the organization’s ever-changing reality. This removes power from the vague and unspoken norms and instead vest...

“The explicitness that Holacracy creates is uncivilized.”

pointing to how accustomed we can get, in “civilized” society, to being vague and indirect. When things get really clear and concrete, it can feel awkward at first. But as clarity grows, trust is often a natural outcome. Over time, the organizational culture becomes more and more free of people using politics as a means of influence, simply because generating clarity through governance is more effective.

An explicit structure of authorities and expectations also helps to differentiate between the people working in the organization and the functions or roles they fill. Decoupling these often fused element...

Differentiating Role...

When a meeting with my partners at HolacracyOne results in my adding items to my task list, none of us thinks of those tasks as being assigned to “Brian.” Instead, we might speak of a task being assigned to “Trainer,” or “Program Design,” or “Finance”—each of which is a role that I fill. Similarly, I may find myself referring to my partners not by their names, but as “Marketing” or “Website Director” or “Training Operations.” This is not something we ever specifically decided to do; it started happening naturally. It may seem like a strange way to talk to the people I work with every day, but it’s actually qu...

In our modern organizational culture, individuals and the roles they fill are largely fused, and that fusion limits both the people and the organization in many ways. For example, often it is hard to separate emotions about people from emotions about the roles they fill. Sometimes the conflicts we have in organizational life are actually clashes of the roles involved, but we mistake them for clashes between the people filling those roles. Such conflicts become unnecessarily personal, and when we try to resolve them by smoothing over the human relationships, we miss the opportunity to clarify the underlying organizational ...

you are both just “energizing” your roles and “enacting” your accountabilities, as we often phrase it