Risks in Holacracy?

Recently I posted a quite short comment about the fact that nested circles are just another approach of representing a hierarchy. Nested circles are the primary approach to organizational structure in Holacracy. Without myself being a Holacracy expert, I have always wondered how replacing one type auf hierarchy with another one can be a breakthrough.

Of course, some more experienced guys stepped into the discussion and tried to change my point of view (they partly did).

Nevertheless, this discussion triggered a bit of thinking about risks in Holacracy and possibly other, similar approaches to organizational change or operating systems. To me, risks are neither good nor bad. They are first and foremost something to be aware of. And therefore I’m dropping some of the risks that came to my mind:

Communication Paths

The Number of communication paths rises massively, leading to a increase in (systemic) complexity. In a typical Line- or Matrix-Organization, every person has obviously a quite limited amount of communication paths.

Big Bang Introduction

I don’t know how Holacracy should be introduced to an existing Org; but switching from Positions or Job Descriptions to (much more) Roles seems to be a big-bang thing. Such a massive (and not evolutionary) change is a huge risk, since the system becomes unstable and you just don’t know, if it stabilizes again. It seems that this happend to Zappos.

Roles may still form a power-relation

Switching to Roles alone does not save an Org from having relations that are characterized by power. And while in an traditional Organization, at least some of this relations would be drawn above the line in an Iceberg Model (explicitly outlined in an Org-Chart) and therefore visible — in Holacracy they are below the line; harder to find and to mitigate their effects.

Emergence of a new hierarchy

With perhaps hundreds of Roles and some dozen circles, a hierarchy within the role model itself may emerge as a result of a living, evolving system. This may have positive as well as negative effects.

Emphasis on Extroverts

I assume Holacracy comes with a whole lot of transparency and peer pressure mechanisms. Along with the requirement to communicate and interact a whole lot more, introverts will perhaps not feel comfortable in such environment. Additionally, the extroverts — part of many circles, having many interactions — may overtake the company. There’s plenty of room for many of System 1 Biases. Nassim Nicholas Taleb recently published an article about The Dictatorship of the Small Minority. IMHO, virtually all approaches that scale interactions of people are prone to such dictatorship, in society as well as in organizations.

To make this clear, I’m not a opponent of Holacracy. And I’m a proponent of #NewWork, #FOW, #kanban, #lean, #agile and self-organizing systems. But I also believe that any non-evolutionary approach change — e.g. by ‘just’ adopting some written, prescriptive method that was derived from a different context — is likely to fail. Organizations are complex social systems by definition. Therefore it’s not possible to predict the impacts of changes, nor is it advisable to just copy something that worked in another (complex social) system. Mind the risks and take small steps of probe-sense-respond.

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