Holacracy.

Maybe you’ve heard of it…and maybe you haven’t.

But if not, according to the inside jacket cover of Brian Robertson’s 2015 book on the subject: “You will.”

Holacracy, Robertson insists, is a “revolutionary new system for running companies.” And businesses that choose to adopt it, he assures his readers, will enjoy “efficient communication, effective meetings, less red tape and fewer roadblocks, [and] crystal clear lines of responsibility and accountability.[1]

Well, that all sounds pretty good to me.

So this week, a closer look at Robertson’s book, Holacracy: The New Management System for a Rapidly Changing World. What it is, how it works, and what it may (or may not) mean for managers.

 

Distributing authority

Businesses, Robertson laments, are stuck. “We haven’t seen any robust alternatives or significant improvements to our modern top-down, predict-and-control ‘CEO is in charge’”[2] – a way of managing that at one point he likens to a “dictatorship.”[3] Furthermore:

Even with the best intentions and great leaders, a top-down authority system leads almost inevitably to a parent-child dynamic between the boss and the employer.” (p. 22)

But Holacracy counters these tendencies, Robertson assures us, through something he calls “distributive authority.”[4]

Inspired by the sort of “self-organization” that occurs in cities and other communities as they grow and develop, Robertson argues that organizational power can be successfully transferred from people (the old way) to a “process” (the new way). No more bosses in charge, and no longer will subordinates have to wait around for directives. According to management by Holacracy, employees at all levels have the power to make their own decisions.

And with distributed authority, no one has the right to tell anyone else what to do.[5]

 

Jargon

Before going any further, I should point out that Robertson’s book is a little heavy on the jargon.

In addition to this idea of “distributive authority,” he also assigns new terms to some very old and familiar organizational concepts. For instance, people don’t have “jobs” in the Holacratic organization. Instead, they fill one or more organizational roles. Nor do employees belong to a specific “department,” “group,” or “team” (although Robertson still makes liberal use of that latter term). They belong instead to one or more organizational circles.

Here are a couple of other terms you would need to become familiar with, were you and your organization to adopt Robertson’s management system:

  • What a link is, including the differences between a Lead link, Rep Link, and a Cross link
  • What distinguishes a role (which can be “expressed” or “energized”) from an accountability (which is “enacted”), and a domain (which is a “property right”)
  • What constitutes the general company circle, and how it differs from the anchor circle, as well as other super-circles and sub-circles
  • What a core circle member is, as well as the duties of a circle’s facilitator and secretary
  • What the governance process is, and how it differs from the operational process

And finally, you would need to know what a tension is. This is Robertson’s term for what you or I might call a “problem” or “conflict.” Tensions aren’t identified and then fixed or resolved, like problems are, either. Instead, they are “sensed,” and then “processed.”

If it all sounds a little confusing, it can be. And on occasion, it results in the sort eye-rolling management-speak that you might expect. For example:

As a lead link, rather than directing the action, you hold the space within which the purpose of the circle can be fulfilled, and you keep out issues and concerns that are not within the scope of that circle.” (p. 51)

When you fill a role, you gain the authority to take any action you deem useful to express that role’s purpose or energize one of its accountabilities, as well as you can with the resources available to you, as long as you don’t violate the domain of another role.” (p. 80)

With the foundational structure created through governance, Holacracy provides further operational distinctions, rules, and lightweight processes that help a team get work done together and express their roles.” (p. 87)

Nevertheless, Robertson insists it is all worth it. As he explains:

Change your language, change your culture.” (p. 176)

 

Meetings

New language notwithstanding, Robertson’s aim in developing a this management system is nevertheless worthwhile and commendable, in my opinion. And that aim is:

To make work easier.

In attempting to break the centuries-old lock that management by hierarchy has had as the default management paradigm, Robertson hopes to rid for-profit organizations of needless bureaucracy, unnecessary red-tape, and stifling indecision. Which is great. If you know something needs to be done, and have what you need to get started, you no longer have to wait for a manager’s approval.

Just do it.

Where things get a bit tricky, however, are in those instances when it’s unclear what needs to be done.

Or who should do it.

Or how it should be done…or by when.

And these, of course, are the sorts of questions/conundrums that enterprises of all shapes and sizes grapple with on an almost constant basis. For example:

  • Maybe you know what needs to be done, but you aren’t sure if it’s your decision to make?
  • Or maybe you know something needs to be done, but you don’t know what exactly..?
  • Or maybe you know what should be done, but you also know it would directly impact/disrupt the work of someone else, perhaps adversely…
  • Or maybe you know what you need to do, but you simply lack the resources to do it…

According to Robertson, all of this can be most efficiently and effectively accomplished in meetings – provided, of course, that those meetings are efficient and effective. As a result, much of the practice of management by Holacracy seems to boil down to getting used to two (2) new meeting types, and their very specific procedures and protocols. They are:

  1. Governance meetings – These are gatherings at which decisions are made regarding who is responsible for doing what. Need someone to update the corporate website with favorable press reviews on regular basis, for example? No problem – that particular responsibility can be assigned to a specific “role” in a governance meeting.
  2. Tactical meetings – These meetings concern “everything that happens outside of governance,” as Robertson puts it – or are about “getting things done.”[6] They provide a forum in which progress is monitored, priorities are set, metrics are reviewed, “tensions” are acknowledged (and hopefully “processed”), and the work of individual circle members is coordinated with the efforts of the rest of the organization.

There is, as might be expected, much to know and understand about how these two types of meetings are run.

For example, in governance meetings there is a “check-in” and “closing” round, as well as time set aside for “agenda building.” Decisions are made using something called the “integrative decision-making process,” which includes specific rounds for presenting proposals, clarifying those proposals, reacting to them (and their clarifications), and then amending those proposals, and/or objecting to these amendments, and finally “integration.”[7] Tactical meetings also have of a check-in and closing round, as well as a “checklist review,” “metrics review,’ “progress updates,” “agenda building,” and “triage issues.” What can and cannot be said at various points in these proceedings is also strictly defined. Feedback, input, or responses of any kind—“cross talk,” as Robertson terms it—is often prohibited.[8]

But it’s all worth it, Robertson assures us. These stipulations are part of “protecting the process” he insists, which is absolutely necessary if Holacracy is to work for you.

 

The circles of the organization go round and round

And yet if it all of this seems a bit involved, or unnecessarily complicated, you might be forgiven for thinking as much.

According to “work-life management expert” and early Holacracy-adopter David Allen, you should prepare yourself for an extended learning curve if you go with Robertson’s system. As Allen writes in the book’s forward:

I did (luckily) have an intuition that exploring Holacracy was going to be a five-year project.” (p. x) [9]

But no matter – so long as it works, right? Indeed, the more curious/troubling admission made by Allen is this:

There are times when many of us would love to prove Holacracy doesn’t work. It’s easy to blame the process as the perpetrator of our discomforts. … What is wonderful is that the model doesn’t care. As a matter of fact, getting rid of it [Holacracy] is totally acceptable and allowed, within the model.” (p. xi)

Hmmm.

Maybe it’s just me, but the book’s forward seems an odd time to bring up the apparent unpopularity of Holacracy, not to mention entertain the possibility of abandoning it. But don’t look to Robertson to disagree. As he later writes (p. 167):

Holacracy isn’t for everyone.

 

3 Contradictions

There is also the problem of contradiction.

For those of you who follow my blog, you are probably well aware that my main complaint with management advice books is that they all too frequently engage in contradiction, or make paradoxical assertions – often without any apparent awareness of having done so.

[For some examples of this phenomena in other books, click here. Or here. Or here, or here, or here, or here…or here. For why it happens so often, click here.]

Robertson’s text is no different. For example:

  • On page 21, he argues that the successful implementation of Holacracy requires adopting a “Holacracy constitution,” which he describes as the “the core rulebook for the organization.” Nevertheless, he also insists that “you don’t need to read it” (p. 22), and does not include its text in his book. (It is, however, available as a free download.)
  • On page 145, Robertson informs readers that it is not possible to adopt certain parts of Holacracy—like the meeting formats—while ignoring others. It is not a “bolt-on” technique, he explains[10] – or at least not if you want to reap its full benefits. And yet on page 181, he has this to say:

“I’ve heard of companies that successfully used [Holacracy’s meeting format] in place of their general staff meetings even though they were not running on Holacracy.”

  • And then on page 25, Robertson makes the sort of overtly paradoxical claim that I’ve found to be quite typical of modern management advice books in general. As he asserts: “Holacracy liberates those within the organization to be simultaneously more autonomous and more collaborative [my emphasis].”[11]

 

Hierarchy nevertheless?

But my primary objection to Mr. Robertson’s management system is that it seems to fall short of it’s stated objective. And that is:

To do away with hierarchy.

As Robertson’s repeatedly insists, Holacracy transfers organizational power from people to a process. However, on page 39 of his text he argues that “when we distribute authority…we distribute it not to individual humans, but to the roles that they fill.” But if authority is distributed to roles, and people fill those roles, how is this really any different?

Alright, so it seems people still have the power according to management by Holacracy – albeit based on their roles. So to whom is organizational power “distributed”? A careful reading of Robertson’s text offers a few hints. For example, on page 107 there is the following:

…the duty of prioritization means you can get a lead link involved in prioritization questions and expect others to align with the lead link’s decisions.

And from page 134:

The Holacracy constitution requires that individuals align their operational decisions with any strategies specified by a circle’s lead link…

In other words, these “lead links” seem to have some of the powers/authority traditionally associated with managers. For example, not only do lead links set priorities, they also play an important role in determining organizational strategy, and can expect others to fall in line and support that strategy. Lead links are also responsible for role assignments within the circle – much like managers decide who does what in their own organizations.

Apparently I am not the only one to make this comparison. On page 50, Robertson points out that readers shouldn’t “confuse [the lead link’s role] with the role of a traditional manager.” As evidence, he points out that lead links do not have the power to fire someone (although they may remove someone from a role), and they do not determine compensation.[12]

Still, if there is any similarity between management by Holacracy and management by hierarchy these lead links would seem to be…well, the link. For instance, the lead link for each circle is not elected, but appointed – and the person/role responsible for that is—you guessed it—the anchor circle’s lead link. And that individual is typically whoever decided to make the switch to Holacracy in the first place – usually the CEO, business owner, or company founder.

This detail is significant because the person with the power to adopt Holacracy also has authority to undo it all. According to Robertson:

“For adoption by a CEO… He or she can retain the right to “unadopt” Holacracy at any point and go back to the old way of running things…” (p. 152)

In other words, while it is the CEO who “cedes power” by agreeing to adhere to a Holacratic constitution, he or she can pull the plug on the whole experiment whenever he or she wants.

And that is something in all likelihood that is not lost on the rest of the organization.

 

Testimonials

So perhaps there is a “hidden hierarchy” lurking beneath all of Holacracy’s fancy new terminology, and strictly defined meeting protocols? Robertson seems willing to concede as much:

Holacracy uses a different type of hierarchy than we’re used to, for a different purpose.” (p. 48)

But the better question might be: Does Holacracy actually work?

Well, so far as I can tell, the jury still seems to be out on that one.

For instance, as of this writing David Allen still runs his company according to Robertson’s method. That organization, The David Allen Company, is an executive coaching firm offering services based on the Getting Things Done (GTD) work-life management system.

But there is also Evan Williams’ experiences to consider. Williams was a co-founder of Twitter, and is currently CEO of Medium – an online publishing platform. On the jacket cover of Robertson’s book, Williams effused: “Holacracy creates clarity.” However, in March of 2015 his company choose to abandon Holacracy after just a few years. At that time, Williams was quoted as saying:

[Holacracy] had begun to exert a small but persistent tax on our both effectiveness and our sense of connection to each other. For us, Holacracy was getting in the way of the work.”[13]

 

By far the highest profile (and largest) company to have adopted Holacracy, however, is Zappos – the online retailer founded by Tony Hsieh.

In 2013, Zappos began its own implementation of Robertson’s system. Many in the organization opted to leave at the time of Holacracy’s adoption – and in the eyes of some, turnover remains relatively high at 29%. Notably too, in 2015 Zappos also fell off Fortune’s list of “100 Best Companies to Work For” for the first time in 8 years. Nevertheless, the company did achieve their profit goals for that year.[14]

More recently Hsieh has decided to focus efforts on transforming Zappos into a “Teal” organization—or one characterized by “self-management”—even as the company continues to adhere to Holacracy’s procedures and protocols. In a 2015 memo to employees, he wrote:

We are going to take a ‘rip the Band-Aid’ approach to becoming Teal organization…in order to eliminate the legacy management hierarchy, there will effectively be no more people managers.[15]

Management by Holacracy aside then, it would seem that—in Hsieh’s opinion at least—shaking the last vestiges of hierarchy is not as easy as Robertson makes it out to be.

 

Robertson’s Rules of Order?

To be honest, I’ve never worked in a Holacratically-managed organization.

Nor have I seen one up close.

So far be it from me to say whether Holacracy will prove to be the “revolutionary new management system” of the future that Robertson’s book claims it will be.

Nevertheless, I applaud Robertson’s efforts. In addition to hoping to make work “easier,” his stated aims of making organizational conflict less personal, and more professional, and ensuring that everyone within an organization is heard and taken seriously—even the lone dissenter—is to be commended.

And according to some, at least in this one respect it seems to be working. As one Zappos employee put it:

The structure of the meeting forces each person to…say what they want. Before I might’ve thought something and wouldn’t have jumped in.[16]

 

So perhaps what we’re looking at here is a new way of conducting meetings – an updated version of that classic Robert’s Rules of Order.

Recall that this was the little book penned in 1876 by U.S. Army officer Henry Martin Robert, and which offers detailed instructions on how meetings might be run orderly and efficiently. In it, Officer Robert codified such now familiar concepts/protocols as making a motion, holding a debate, putting a motion to a vote, and majority rule. And back then, much of what he wrote might have struck some as a bit “jargony” too.

But when it comes to eliminating managers and management by hierarchy altogether, it is my opinion that Robertson’s paradigm comes up short.

As far as I can tell, the CEO or business owner still holds most of the power in the Holacratically-governed organization. This individual retains the authority to set goals, determine strategy, prioritize work, and make role assignments throughout the organization (even if only indirectly). And should things not go his or her way, this individual might “un-adopt” Holacracy at any time.

To rid organizations of hierarchy altogether, it seems we may just have to wait for something else to come along.

 

 

See you next Friday.

 

 

Endnotes

[1] Roberston, Brian. Holacracy: The New Management System for a Rapidly Changing World. 2015. (Henry Holt and Company: New York), inside jacket cover.

[2] Ibid., p. 11.

[3] Ibid., p. 18.

[4] Ibid., p. 91.

[5] Ibid., p. 53-54.

[6] Ibid., p. 87.

[7] Ibid., p. 72.

[8] Ibid., p. 70.

[9] It is perhaps interesting to note that at the time of it’s writing, Allen and his own organization were only three years into that project.

[10] Ibid., p. 58.

[11] I first encountered this phenomena in the management advice book classic In Search of Excellence (1982) by Tom Peters and Robert Waterman. In it, the authors argue that “excellent” companies exhibit “simultaneous loose-tight principles.” That is, they are “both centralized and decentralized,” and “on the one hand rigidly controlled, yet at the same time allow…autonomy.” They also are “simultaneously externally focused and internally focused,” and seem to obey something Peters and Waterman call “the smart-dumb rule.” None of this, of course, really makes any sense.

[12] Robertson, op. cit., p. 53.

[13] “Management Changes at Medium” by Jennifer Rheingold. Fortune (online), March 4, 2016. http://fortune.com/2016/03/04/management-changes-at-medium/.

[14] “How a Radical Shift Left Zappos Reeling” by Fortune (online), March 4, 2016. http://fortune.com/zappos-tony-hsieh-holacracy/.

[15] Ibid.

[16] Ibid.