Holacracy Is Not What You Think

A Response to Steve Denning’s “Making Sense of Zappos and Holacracy”

Last week at Forbes.com, Steve Denning posted one of the best researched articles on Holacracy® over the past few weeks: Making Sense of Zappos and Holacracy. I strongly recommend the read; it clears up many misunderstandings about Holacracy. At the same time, I think his arguments are colored by a negative bias that reveals a misconception of what Holacracy fundamentally is. My colleague Brian Robertson and I, among others, have responded to Steve in the comments section, and thought it’d be interesting to compile those comments into one piece.

To best follow this article, it’s a good idea to read Steve Denning’s article first, although not essential. I’ll address his arguments point by point.

“Circles” are self-organized, not self-directed

Steve Denning: “Holacracy is hierarchy on steroids … Each higher circle tells its lower circle (or circles), what its purpose is and what is expected of it. It can do anything to the lower circle—change it, re-staff it, abolish it—if it doesn’t perform according to the higher circle’s expectations.”

This is true, except for some significant nuances. Yes, there is a hierarchy in Holacracy (rather, a…