How Human is Holacracy?

In my last post, I’ve proposed a comprehensive, approach agnostic, self-management and self-governance framework for the human organization.

Finally making sense out of the many self-management options available and matching them against the specific needs of each organization was among the top potential applications the framework had in my mind. Knowing a bit about Holacracy thus convinced me to start exactly from one of the most known and talked about self-managed human operating systems.

The questions I wanted to explore regarding Holacracy included:

• Is Holacracy covering most of the critical dimensions required to build a human organization?
• Which mechanisms is it providing for individuals, teams and the overall organizational design?
• Is it balancing well enough the needs and search for motivation of the human being with the clarity and order required by the organization itself to prosper?
• How mature and forward looking are the design decisions baked into the model?
• Is it inherently pointing to a precise idea of what a future organization should look like or is it overall  an “agnostic” empty shell that could be applied to any organization?
• How does it compare to other self-management models?

Let’s search for some answers by applying the human organization map to Holacracy:

When we get into each dimension, we see that:

• Reason why. Purpose is fractally part of Holacracy at every scale: a single organizational-wide reason-why is broken down into smaller goals assigned to each team and then to individuals within the team. More precisely, purpose is explicitly used to orient the identity, intention and actions of each circle and role. On the other side, no indication is provided regarding how an effective or positive purpose would like. Supporting meaning through work is not prescribed in any way. Score 7.5 / 10.
• Strategy: Holacracy doesn’t believe in the value of a formal, top-down, long-term strategic plan. On the contrary Holacracy empowers every role and circle to autonomously and constantly take the decisions, small or big, required by the organization to address tensions (the gap between the current reality and a potentially improved state). Such decisions dynamically and collaboratively steer the company towards its future in an agile way. Lead Links, a role with quite an extensive space at assigning resources, defining priorities, coming up with metrics and deciding strategies (in a dynamic steering acceptation), partially have responsibility in this regard. Score 9 / 10.
• Leadership: while Holacracy doesn’t specifically address leadership. Instead, it distributes accountability and authority as broadly as possible. There is no way to impose decisions, to use positional influence, to act as the hero that will save the day. Nobody needs to be saved or lead. Each individual can take on and act on all the accountabilities required to advance the purpose of his or her roles. Conflicts (objections) are managed through integrative decision making, instead than through hierarchical power. Holacracy thus empowers each individual to become a leader through its actions in a fully distributed way. Score 9 / 10.
• Power distribution: reiterating what written above, Holacracy is a framework to transparently (through roles and accountabilities) distribute power and decision making to the edge, where they can make a difference (by effectively addressing tensions). There is no centralized authority or veto power. Even the CEO gives up its rights by signing a constitution. Score 9 / 10.
• Planning: Holacracy helps the organization to enter the future one tension at a time. By taking decisions that are good or safe enough to try, it goes well beyond consensus or even consent through a machine that processes tensions at full speed. Tensions are external signals that stimulate a timely reaction that could range from executing a task, to an entire project, to even reshuffling the organizational structure (self-governance). Each reaction is indeed an experiment that enables the company to learn and adapt without any need for a comprehensive, long term plan. Such an approach has significant consequences on traditional budgeting and forecasting. Teams are obviously invited to negotiate priorities but hard deadlines are difficult to respect when all the work is agile. Score 9 / 10.
• Organizational structure: Holacracy is based on a hierarchy of self-regulating holons that function both as autonomous wholes and as dependent parts. The structure is not flat. The hierarchy is still there but it is about roles and circles, not people. Each role or circle has a purpose to express, domains to control and accountabilities to perform. Hierarchy is not a decision making or control aid. It’s more about decomposing purpose and accountabilities at scale, in a way that can be enacted in full autonomy. Score 7.5 / 10.
• Management style: the highly decentralized management style offered by Holacracy is only possible by fully trusting each individual to take on the responsibilities associated to his or her roles. There are no managers. Even the Lead Link is not a manager as he / she doesn’t control anybody and doesn’t represent the interests of the circle in the circle above (this comes with a separate Rep Link role). Nonetheless there is no discussion about good or bad management. Management is not based on a set of shared values acting as the north star for every action individuals do. Operational decentralization is hard coded into the operating system as there is no cultural or motivational glue providing unwritten inspiration and alignment. Score 7.5 / 10.
• Work allocation: job titles are a memories of the past. Functions in Holacracy are performed through roles (see above). A person may fill multiple roles and a single role can be filled by multiple persons. Individuals are dynamically assigned to roles either through elections (for the Facilitator Role, the Secretary Role and Rep Link Role) or through the Lead Link. Holacracy is instead not into open allocation as individuals cannot fill the roles they feel better prepared for. As with most other aspects of the model, accountabilities for the Lead Link can be nonetheless changed and other ways to assign people to roles are possible. Score 5 / 10, at least for the out-the-box rule.
• Influence: Holacracy supports equivalence as all individuals are equal (CEO included). There is no special position in the organization structure and each person can hypothetically fill all the roles that fit with his / her abilities, interests and time availability. Of course authoritativeness and influence go well beyond accountabilities. They will still play a role in Holacracy but its impact will be mitigated by the strict prescriptions in terms of how tactical and governance meetings are conducted. Score 9 / 10.

Not bad right?

At the best of my knowledge, Holacracy is instead not giving direct advice on the remaining dimensions (in gray) of the Human Organization Map. Some critical aspects that jump out of the mapping at a higher level are in fact that:

• Holacracy is positioned fairly right on the spectrum for all the dimensions it addresses. The positioning on the map clearly shows how forward looking Holacracy is when it comes to purpose, dynamic strategy, pushing leadership to the edge, distributing decision making, empowering teams to self-manage and costantly re-organize themselves around tensions. Some areas could be further reinforced but the plasticity of the system can easily (if you know Holacracy well enough) accomodate for that.
• Holacracy provides quite a comprehensive direction when it comes to the team (green) and to the organization (blue). It says basically nothing about individuals, on purpose. Most of the dimensions in the individual level of the human organization map remain unaddressed. Human needs, feelings and development are not really key to Holacracy’s philosophy, as the central goals are organizational flexibility and efficiency. This is very much in line with the idea of “a governance process of the organization, through the people for the purpose”, instead than “a governance of the people, by the people for the people”. Holacracy decouples people and human relationships from the organization of work. It actually protects the organization from political turfs, fiefdoms, hidden agendas, psychological pressure, the willingness to go around or bend the rules. The machine encodes and enforces the rules making such disfunctional behaviors very difficult to perpetrate. Personality and work are formally disconnected to increase clarity (everybody knows what has to be done, how and by whom). This comes at a cost though: human beings become cogs in the system with their space for expression, interaction, relationship strongly limited. In a nutshell, human relationships are left, on purpose, out from Holacracy. It starts at the values and beliefs level. It goes all the way on at the ownership, behavioral, developmental levels. Holacracy is convinced human traits are what makes work inefficient and that removing them from the picture is the only solution ahead.
• Holacracy is agnostic. As a true operating system for people, the principles that have been codified within holacratic mechanisms could be applied to organizations with any purpose (even those that are not fighting for good), any role in the market (no value creation scheme with customers is suggested), any level of openness (with the exception of accountabilities that are totally transparent), any willingness to respect and motivate individuals (even no willingness at all), any focus on helping human beings to learn and realize themselves. Holacracy intent is not liberating individuals, making them happy or satisfied, reinforcing wholeness or relationships. This could be good or bad, depending on your goals. If as in my case, your personal purpose is about making the world a better place, well Holacracy may fall a bit short.

What the analysis really highlights is that Holacracy brings and encodes a vision of the world according to which the 3 following statements hold true:

1. Work is inefficient and ineffective because human traits are so deeply part of it
2. Build a system that vaporizes such imperfection and the organization will run like a fast, well oiled, adaptive machine. Humans will remain as a transmission system (i.e. “a governance process of the organization, through the people for the purpose” but their soul is no longer needed.
3. No other option is available for keeping both efficiency and soul

But is this really true and does it really work in practice?

Answering such final questions probably goes beyond the scope of the Human Organization Map and instead gets into our innate need for connectedness, safety, meaning, fun, love, improvement, ownership and probably much more. By looking at the map, the feeling is anyway that we can imagine an organization as the sum of its Resources (assets, locations, tools, funds, ownership, etc.), its People (employees, partners, suppliers, customers that create value together) and its Operations (organizational structure, governance, policies, metrics, roles, rules, etc). Holacracy only addresses the latter.

Unfortunately the other two (resources and people) both have a dramatic effect on work organization and operational effectiveness, even if we do our best to avoid that. One evident example is the huge personal and professional change required to any individual (people) to accept, adhere and be effective within the new engine introduced by Holacracy (operations).

While more apps can be easily added on top of the Holacracy operating system, our nature as social and ethical animals cannot and probably shouldn’t be forgotten in our quest for agility, efficacy and effectiveness. The toll could having the perfect car that remains unutilized in the garage.