Holacracy: rules for playing the game differently

Strategies that are successful in an old system can be handicaps in in a new one.

Let’s talk sport!.

Because an image is sometimes worth more than a long-winded explanation, let me present you with 2 teams.

2 teams, a single point of difference.

Team A

In team A, players are blindfolded. There are assistants to guide them at the edge of the field, and their coach is in the grandstand. From his position, the coach sees the overall situation clearly. From the stands, he communicates his instructions to his assistants who relay them to the players, telling them what movements to perform.

The game has always been played like this. The coach is the only one to know the score, so he’s in the best position to define the strategy. The assistants break it down into objectives, directions, movements, and the players do their best to implement these. As always, when a player makes a pass, he never really knows what is going to happen to the ball, or if his teammate is going to receive it. Each player avoids leaving the particular area in which they play, and in general doesn’t take any risks. Indeed, this is not really important because the coach is there and they know what’s going on, and because there are all these assistants to keep everyone focused.

In team A, players are hired for their technical expertise in the vacancies to be filled, assistants for their ability to obtain the best results, enabling the coach’s plan to be realized: winning the game (and thereby reinforcing his claim to be the coach).

In this team, most players also dream of becoming assistants, and amongst the assistants, some see themselves in the coach’s role. This gives rise to a strange spectacle whereby decisions and actions are taken with the sole aim of accomplishing these unspoken personal objectives.

Played like this, the game is overall quite slow and imprecise. The coach’s abilities, the speed and quality of the information transmitted to the field by assistants, the number of assistants and players and their discipline are all parameters used by team A to improve their game.

Team B

In team B, each player can see perfectly clearly.

In this team, each player knows why they are there: to excite supporters, to provide them with an experience of intense collective enjoyment for the duration of the game. This is their greater purpose, the reason why players play. To realize this they need to win the game, and if at all possible, play the game in an attractive way.

To achieve this goal, everyone has one or more well-defined roles. These roles interact together to effectively accomplish the mission which they are fully invested in. Each role thus fully realizes its own potential while ensuring that actions required by other roles are also carried out. Players are hired as much for their ability to fulfill their roles as for their compatibility with the culture and values of the team. Moreover, these values are an important part of the rules of the game that they’ve established together and which have become a way of life.

In this team, the assistants and the coach are on the field in the roles they bring the most value to.

Team B evolves quickly, covering all of the field and adapting very quickly to situations it encounters. In comparison, the players in team A resemble the little figures that we find on a foosball table.

Even though they’re playing the same sport, almost everything contrasts teams A and B. And it should be noted that despite their smaller number, team B progressively scores more points.

Rules of the game to change the paradigm

You will have recognized two types of organization. Of course, team A is something of a caricature, but regardless of this, playing the game by slightly different rules leads the two teams to develop two paradigms which are totally different.

Moving from situation A to B is certainly the most daring and difficult thing team A’s coach can do, because it means agreeing to switch to a system where most things that they know or are familiar with don’t work as well, or don’t work at all. Moving from A to B means risking moving in a direction where the path is revealed as you go, on which everyone sheds some light, and which brings its share of new opportunities at each new stage.

Moving from A to B means agreeing to play the game by new rules, and based on these new rules reviewing a large number of current practices.

Leadership and transparency: 2 drivers for moving from one paradigm to another

Holacracy is this set of game rules. Rules that are sufficiently generic and broad enough to allow them to be applied to any type of organization. In this regard, it differs from systems developed at the instigation of a visionary leader, which allow their organization to be transformed, but which can be used by other organizations with only varying degrees of success.

Adopting Holacracy as a set of game rules means moving from a hierarchy of power and people in relation to one another, to a hierarchy of roles, leaders in the particular mission they have to carry out. In Holacracy, I like the principal of transparency that, in my opinion, is an extraordinary lever for organizational transformation.

Give everyone the ability to see clearly what they are doing, what they are participating in, and on a larger scale what they are contributing to; give everyone the ability to have an impact on the organization at their own level, making their actions more relevant to the fulfillment of the collective vision: here are 2 essential drivers to tear you away from the attraction of an organizational system that has been in place for more than 100 years.

Transparency is a vital prerequisite, and the foundation of all transformations.

In an organization, transparency firstly means shining a light on the organization and all of the roles that are a part of it, starting with their purpose. Transparency means making all of the existing rules clear, both formal and informal, making the implicit explicit and subjecting everything to the hard question of what is required by the organization’s deep purpose. Transparency gives each role the ability to read and understand their environment, in particular by accessing necessary information, expanding it using information technology, to make the decision-making process easier and reduce the risk of error. Transparency gives everyone the ability to experience things and express them, because no solutions exist for things we can’t describe.

Increasing transparency means taking the risk of being exposed to critical thinking and the collective intelligence. The good news, if you’re a manager, is that a collective favorably aligned to a purpose that makes sense will quickly relieve you of the complex multi-layered organizational structure that you’ve built up over the years, in favor of an organization that is leaner, more agile and much more efficient.

Holacracy is only a set of rules, but that’s already a lot!

Holacracy is no more than a set of rules for playing the game (Holacracy is outlined in a constitution of around 30 pages). Holacracy is concerned with an organization’s purpose and the conditions necessary to realize this, by means of an organization of roles to fill, each performing the “job to do”.

I’d like to end this post with two observations.

  • The first concerns criticism of Holacracy on the grounds that this makes an organization less human, or inhuman.
  • The second concerns questions over the way in which Holacracy manages HR issues (recruitment, evaluation, pay, etc.), and in general how Holacracy has an impact on these processes

Holacracy has nothing to do with the Human

Here and there, you’ll read that Holacracy is an inhuman system, or that it doesn’t take the human aspect into consideration. As a set of rules, Holacracy indeed has nothing to do with things that relate to who we are and the interactions we might have with others. Holacracy simply offers us a system to differentiate the “jobs-to-be-done” (using a set of roles, and relationships between roles, nothing “human” therefore in this concept), from who we are with our intelligence, our emotions, our capacity to experience, our ability to make up our minds and to adapt according to the situation. Does this mean that we don’t need these qualities? Of course not! I carry out a number of the roles I fulfill with my whole person, in particular in relations with our clients, in the marketplace, or by writing this post. The role in itself has nothing to do with that.

What’s the point of talking about roles then? I can see two immediately. a) by describing the roles within an organization, you help make the organization more explicit and clearer for others; the description of a role starts with its definition and its purpose, that’s all. b) by clarifying the role to fulfill, it’s that much easier to identify the resources required to fulfill it, or most likely to fulfill it, to evaluate these resources regularly, and to allow them to develop to achieve the best possible “fit”. The search for the best “fit” by a continuous evaluation of resources (human or otherwise) in each of the organization’s roles is something that appears crucial to me in order to enhance performance.

Holacracy doesn’t tell you how to play the game

If I go back to the image with which I started this article, Holacracy doesn’t tell you how to hire players, how to pay them, how you replace them. Holacracy also doesn’t tell you who should pass the ball, take the penalty, what your game strategy is. The good news is you get to decide! When you adopt Holacracy, everything related to these questions won’t be any different from the system you know today. You won’t be catapulted into some strange, new world!

On the other hand, by creating more transparency and more leadership, Holacracy will quickly reveal what works well and what doesn’t, at all levels of the organization, and putting such questions on the agenda. It is equally certain that your practices will develop as time goes on towards a state that Frédéric Laloux describes under the expression “Teal Organizations”. A state which will lead each of your players to give their best whilst finding fulfillment within your team.

Philippe Pinault
Co-funder