Holacracy

The system originated in the company Ternary Software (Exton, Pennsylvania, USA), famous for its experiments with more democratic forms of organization management. ^[3] Brian Robertson, the founder of Ternary Software, chose the most efficient working methods to integrate into the organizational system that became known as Holacracy in 2007. ^[4] Subsequently, in 2010, Robertson wrote the “Holacracy Constitution,” outlining the basic principles and the methods of the system, and began to support companies in its implementation.

The term "Holacracy" comes from the term "holarchy", first introduced by Arthur Köstler in 1967 in the book "The Ghost in the Car." The holarchy consists of “holons” (Greek ὅλον - cf. gender from ὅλος, which means “whole”), or otherwise autonomous and self-sufficient units, while being dependent on the larger whole, of which they are a part. ^[5] Thus, the holarchy is a hierarchy of self-regulating holons, functioning simultaneously as autonomous integral units and as dependent parts. ^[five]

Holacracy is compared to sococracy, a management system developed in the second half of the 20th century. ^[6] Sococracy had a significant impact on Holacracy in the early stages of the latter, ^[7] however, since then, the differences between Holacracy and sococracy have become more and more. ^[8] In particular, sococracy served as a source of inspiration for the creation of the circular structure and governance processes (described in more detail below) as part of Holacracy. Holacracy is designed for organizations, and the organization’s roles in this management system are fundamentally different from the roles of the organization’s employees. ^[9]

Other sources of inspiration for Holacracy, which focuses on cyclic management, adaptive processes, and self-organization, are Agile’s agile development methodology and lean manufacturing techniques. Holacracy can easily be combined with Stakeholder Theory , as the board structure at Holacracy allows for multiple stakeholder representatives in government and provides a link between multiple organizations with common interests at the board level.

Roles instead of duties

The structural elements of organizational structure in Holacracy are roles. A distinction is made between the roles and the people hired to perform them, since one person can fulfill several roles at a certain moment. A role is not a job description; the role is determined in accordance with a clear format indicating the name and surname, purpose, possible "areas" of control and responsibility, current tasks. ^[10] Roles are determined for each “circle” - or team otherwise - by the collective management method and are regularly developed and corrected in order to bring them into line with the constantly changing needs of the organization.

Circular structure

In Holacracy, various roles within an organization are built into a system of self-organizing (but not self-governing) circles. The circles have a hierarchical organization, the external circles set a specific goal for each circle and determine the areas of responsibility. At the same time, each circle is vested with authority for internal self-organization in a way that would ensure the most effective achievement of its goals. Within the circles, internal meetings of the board are held, employees are appointed to fill out the roles, and those responsible for the work within the established scope of authority are determined. Communication between circles is provided by two roles called “Lead Link” and “Rep Link”. Employees performing these roles take part in meetings of both their own and external circles, in order to coordinate actions with the mission and strategy of the organization.

Management Process

Each circle uses a clearly defined management process to develop and regularly refine its own roles and working principles. Holacracy provides a structured process known as “integrative decision making” to propose changes to the governance structure, amend these proposals and object to them. This system is not based on consensus or agreement, it integrates the views of all parties on a specific issue and ensures that the proposed changes and objections to changes stem from the needs of specific roles (and through them the needs of the organization), and not from personal preferences or selfish motives employees. ^[eleven]

Production Process

At Holacracy, team coordination processes are defined around production needs, and it is required that each member of the circle fulfill certain responsibilities in order to ensure effective and productive collaboration. ^{[12] [13]} In contrast to the management process, which is collective and integrative, each participant filling a role has a high degree of autonomy and authority to decide on the most effective ways to achieve their goals. In some sources, the paradigm of distribution of powers in Holacracy is described as completely opposite to the traditional managerial hierarchy; instead of having to obtain permission to take any action or innovate, Holacracy grants unlimited authority to take any action necessary to carry out work within the roles, unless this authority is limited by management principles and does not imply the organization’s assets (cash funds, intellectual property, etc.). ^{[14] [15]}

Holacracy describes the tactical process of holding meetings. As a rule, each circle holds meetings once a week. This process involves the various phases of providing relevant data, sharing the latest project data and conducting open discussions in which any member of the circle can propose a discussion. ^[16] A special feature of the last phase, known as “prioritization” (eng. Triage), is the focus on discussing the specific next steps needed for a particular person who proposed a discussion question to solve his problem. ^[17] The challenge is to avoid large-scale unproductive discussions where they speak in a raised voice. ^[18]

Holacracy System Name is a registered trademark of HolacracyOne LLC. ^[19] For this reason, anyone who intends to sell goods and services using the word "Holacracy" is required to first obtain permission from HolacracyOne. At the same time, the trademark should not be confused with the patent, since the first does not limit the possibility of using the Holacracy model to any person, the only thing that limits the trademark is the use of the trade name for commercial purposes.

The model itself, as defined in the Holacracy Constitution, is published using a license to distribute Creative Commons version 4.0 cultural works free of charge with attribution and subject to distribution of derivative licenses under the same conditions (ShareAlike). This model can be considered an open source model. HolacracyOne even posted the “Holacracy Constitution” on Github.com to motivate other contributors to help improve it. ^[20] Thus, the distribution of the Holacracy system uses the same “open source” trademark model as the distribution of other products, such as Mozilla, Linux, and even Wikipedia.

The Holacracy system was implemented and used in both commercial and non-profit organizations in the United States, including:

• Productivity David Allen Company
• Medium, founded by Twitter co-founder Evan Williams,
• Precision Nutrition Diet & Slimming Consulting Company
• the nonprofit organization Conscious Capitalism, founded by John McKay, director of Whole Foods Market, a supermarket chain.
• Zappos, an online shoe company with Amazon, also announced the introduction of Holacracy. ^[21]

It is argued that Holacracy allows you to increase the flexibility, efficiency, transparency, innovation and responsibility in the organization. ^{[22] The} applied approach motivates team members to take the initiative and provides them with a technological process by which they can solve problems and implement ideas. ^[3] The system of distributed powers reduces the burden of making each individual decision that rests with leaders.

According to director Tony Shay, Holacracy enhances people's responsibility for their thoughts and actions. ^[23]

According to Zappos employee Christie Mead, Holacracy helps prevent gender-based patterns of behavior. It "provides protection that leads to the creation of an atmosphere where the performance of certain actions emanating from subconscious prejudices becomes impossible." ^[24]

In a January 2014 post on Forbes magazine’s online resource, management and leadership books author Steve Denning warned readers not to consider Holacracy a panacea, stating that contrary to the assertion of eliminating the hierarchy, decisions are actually passed on from outside to internal according to a clearly traceable hierarchy, with each subsequent circle having less and less idea of ​​the general picture than the previous one. ^[25] He also stated that the rules and algorithms laid down in the constituent documents of the Holacracy system, such as Robertson’s article, which served as the beginning of the system, ^[4] are described in great detail, and they pay great attention to “administrative procedures”. ^[25] Finally, Denning added that there is no customer voice in the Holacracy model, concluding that in flexible client-centered companies such as Zappos, Holacracy is able to increase attention to administrative matters, but there is no guarantee that this system will be effective in organizations where flexibility and a high degree of customer care have not yet been achieved. ^[25] Olacier Compan, HolacracyOne partner, responded point by point to criticism in an article posted on the company's blog. ^[26] He argues that Denning's criticism shows a lack of understanding of Holacracy, and further explains how Holacracy's rules of work help solve or prevent alleged difficulties.

• Agile software development
• Getting things done
• Lean software development
• Systems thinking
• Emergence

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