Holacracy Revolutionizes Company’s Management Structures, Here’s Why

So many companies, start-up and large corporations, are implementing an innovative approach in leading the entire team. A new type of management called Holacracy has been making waves in a way that pushes organizations to have a more flexible structure.

According to Holacracy.org, it is “new way of running an organization that removes power from a management hierarchy and distributes it across clear roles, which can then be executed autonomously, without a micromanaging boss.”

It could appear as a chaotic type of structure but it is more than just a non-linear approach in leadership. Holacracy is actually a structured type of chaos but there is still a clear set of rules and processes for how the organization will break down theassignments and manage authorities.

Traditional VS Holacracy

With traditional companies, structure is one of the most basic necessities. With structure, it is easier to automate the processes. Just like Henry Ford’s assembly line, an organizational structure clears the path for roles and responsibilities. It has a clear view of how the company will run and how the delegation will proceed. However, one of the reasons why Holacracy was made was because of the impeded movements by managers on the employee’s suggestions.

In a traditional organization, you have the employee and the boss. With this structure, the employee reports everything to the boss, even the small or big suggestions he has in mind for improving his work and the company. Most of the time, these ideas or suggestions get turned down for a variety of reasons: politics, budget or personal bias. This boundary has prevented many projects from breaking through because of the immediate turn down of out-of-the-box ideas.

This is where Holacracy comes in. The roles and responsibilities in a Holacracy is not defined by the management but by the workforce. People can work on several projects if they would like to. There is no definite role for each person but there is a deep sense of accountability. With Holacracy, collaboration is the key. A developer can implement his ideas on the project without getting the approval of the supervisor or the manager. But then again, it will have to go back with accountability.

Holacracy works when there is transparency. It would be hard to track down everyone’s implementation of their own ideas so each will have to share to everyone what they are working on. In case there will be a conflict, the person accountable can propose a resolution and at the same time, another team member can come in and help. No restrictions. No boundaries.

The other advantage of Holacracy is that it is innovative on its own. It is like its own being developed over time. In a traditional organization, you would have to be promoted to be handled a certain level of responsibility, but in a Holacracy, one person can be solely responsible for the task and if that task evolves, it can then turn into a small team.

Zappos, Buffer, Basecamp and Medium Steps In

Uprising companies like Zappos, Buffer, Basecamp and Medium has already implemented Holacracy.

Meduim’s CEO Even Williams advised that to be able to make this structure effective, the organization has “to make the implicit explicit — tons of it is about creating clarity.” He added that Holacracy has a structure of its own but there is a balance between flexibility and structure.

Jason Stirman, a Medium employee, said that the team is created of “hierarchy of circles.” People who work on a certain task are grouped together. For example, there is the Creation and Feedback circle who handles content creation; while there is the Reading and Discovery circle whose aim is to improve the user’s reading experience.

Holacracy is innovative on its own. Credit: StockSnap.io

Zappos, an online retailer company, will be the biggest entity to incorporate Holacracy. With about 1,500 employees, the company is the biggest experimental ground of this management style.

According to co-founder and partner of HolacracyOne, Brian Robertson, Holacracy “emerged from experimentation.”

“Instead of getting like a top-down management where the CEO holds power and delegates the power to and so on, there will be a constitutional process that holds the power,” said Robertson. “Holacracy takes the functions and splits them up in different places.”

Again, there is still a uniqueness in how each organization will implement this because they will have to devise their own rules for this structure. As Robertson noted, they will have to “figure out the work and who’s accountable for it.”

However, there are still objections and precautions on Holacracy. Bob Sutton, Stanford University Business professor, said that since this is really an untested territory, it is very uncertain if Holacracy can be applied in all types of work spaces.

“You gotta be careful for this because this seems sort of like a management fad. Let’s see what it actually looks like when it gets implemented in these organizations,” said Sutton.

So how about you? What’s your thoughts on Holacracy? If you are a CEO, do you think it is a good way to manage your organization? If you are a team member, do you prefer a flexible task delegation or do would you rather have a clear path of roles and responsibilities?

ABOUT THE AUTHOR

Pat Villaceran is an eclectic social entrepreneur. She creates social enterprises that empower multi-fold impact on economy, society, and environment. She’s also passionate about equality, human rights and the plight of emerging markets.

Pat’s non-fiction publications focus on the introspection of the mind and how human beings are able to achieve the impossible. She surmises findings from scientific researches, extraordinary life examples into the life-changing philosophical ethos she writes in her books.

For more information on her upcoming and latest releases, follow Pat on her social media accounts.