Good Holacracy, Bad Holacracy

Is Holacracy a wonderful operating system for building purposeful, human, dynamic organisations? Or is it rigid, dogmatic and overbearing — ‘the management equivalent of dungeons and dragons?’

The answer is: Both. You have a choice.

Holacracy itself is neither good or bad. It can do brilliant and awful things to a workplace.

Hearing stories of Zappos apparently struggling with Holacracy, and moving away from it seemed to confirm my gut reaction about Holacracy. It sounded boring, fiddly, techie, rigid and possibly even inhuman.

So I’ve been pretty critical of Holacracy in many of my articles. And each time I get pushback: You don’t get it; you’re wrong; Holacracy isn’t really like that; and so on. Yet in my research for developing the Maptio product (which is not a competitor of Holacracy) I talk to people who have tried it and found it got in the way more than it helped. And I talk to smart, thoughtful people who read around the subject thoroughly and don’t even see any merit in trying it. Whilst I’m sure there’s more complexity in the Zappos and Medium examples than commentators are aware of, it still points to major problems with Holacracy.

I’ve done my best to keep an open mind and engage in dialogue with people who agree and disagree with my instinctive dislike for Holacracy. I’m glad I did because it’s shaped a more refined view of it. For anyone interested in Holacracy who also can’t help feeling a little turned off by it, here’s where I’ve got to. You might be pleasantly surprised, just like I have been. I hope this article stimulates more dialogue, so please criticise away and add your own insights and experience in the comments.

A very crude way to summarise it is there’s Good Holacracy, and Bad Holacracy, and shades of grey between the two. The difference is, as ever, about people. It boils down to how they interpret Holacracy and put it to work. It also depends hugely on the unconscious biases, shadows and other pathologies of the people involved.

I think that many people like me have heard the horror stories of Bad Holacracy and we react against it. If we’re not careful, we write off the whole thing. Whereas if we encourage more Good Holacracy, I don’t think there’s anything to fear.

Bad Holacracy

A sure sign you’re dealing with Bad Holacracy is when the whole effort to adopt it becomes about Holacracy. Leaders are sold on the Holacracy concept and then a project begins to ‘install’ it.

This sets you up for problems from the start since people in these organisations will naturally read up on Holacracy, form opinions about it and decide whether or not they have energy for trying it.

In the worst cases it’s used forcefully, even when the people doing the work don’t believe it will help them. The people are considered the problem. They’re labeled ‘change resistors.’ Practitioners of Bad Holacracy never blame any trouble on the system itself, or the coaches and consultants bringing it to workplaces.

This leads to a timeless problem: Embarking on a dreaded org redesign and change programme. The goal being to get everyone converted to the Holacracy way or get them out of the organisation altogether. This naturally leads to a situation where people have to decide if they can or cannot live with it. It inevitably leads to otherwise highly valuable people leaving.

If adherence to Holacracy dogma is valued more highly than doing great work, living the values, and contributing to the vision, you’ve got problems.

In Bad Holacracy, the rules are tightly held. There’s none of the healthy encouragement of lovingly intentioned rebellion that’s so necessary in modern workplaces. The rules are the rules.

Now this isn’t to say that rules are bad. There can be a real power in submitting to a particular process and trusting it to get a result. And at the same time there is an art to knowing when to abandon and break the rules.

Bad Holacracy seems to value its own processes and rules above all else, and it’s all or nothing. There’s not enough wiggle room for people to find and choose their own ways to do things or pick and choose the elements that work for them. Holacracy always knows best.

All of this is not much different to the organisational operating systems of the past: Total Quality Management and Six Sigma have had their day. They brought some benefits but also stifled a lot of creativity, diversity and progress with their unrelenting dogma. Bad Holacracy is just the latest incarnation.

I’ve also come to believe there’s an unhelpful relationship between many Holacracy practitioners and the psychological concept of the ego. What appears to be going on is that there are a bunch of people with fairly wild egos who have enough self-awareness to know that it will get in the way of good collaboration, yet haven’t done the inner work to learn to fully love their ego (to be able to say with a hearty laugh ‘I’m an egomaniac and I love it!’) and use it consciously and wisely without it running wild in ways that don’t serve them. Instead, the approach is to try to use Holacracy as a mechanical process to sideline ego from work. To me, this is an awkward workaround and there’s collateral damage as natural, human connections and conversations can also be sidelined, which I suspect leads to the criticism of Holacracy being inhuman.

Brian Robertson of HolacracyOne talks openly about ego in his book (apparently he blames his mother for his ego.) He describes the need for a process to protect his colleagues from his ego. This suggests that the Holacracy system he invented is right for the level of self-awareness and self-control that Robertson possesses, and it probably suits others who are similar. It may also explain why people in some organisations feel like they need to go ‘beyond’ Holacracy. With healthy relationships to ego you don’t need a formal process work around it.

Finally, there’s another problem which I suspect is linked to the ego issue. In an attempt to sideline ego, a mental model is adopted which says that the organisation itself is a separate entity, like it has a soul of its own. Especially in groups where self-awareness isn’t sufficiently advanced, this creates fertile ground for people to project their own needs (conscious and unconscious) onto ‘the organisation’. There are indirect conversations about the vision and direction of an initiative instead of clear articulation and connection to individual needs.

Good Holacracy

On the other hand, Good Holacracy always works in context. That means solving real issues that are getting in the way of the work and overall progress. It offers process and structure, not to constrain or for its own sake, but to open up creativity and autonomy for people doing the work.

The focus isn’t on selling people on Holacracy and coaching them to use it, but on the underlying principle of self-management. I sometimes simplify this as the three A’s: Autonomy (for people to take the initiative and make decisions); Accountability (to keep on top of how commitments are being met); and Alignment (to ensure everything’s contributing towards an overall vision.) There are plenty of other ways to frame self-management too.

Bit by bit you can introduce useful ideas from Holacracy like processing tensions; decision-making using advice and consent; and separating conversations about the work itself from conversations about organisational process and roles. These are all very helpful techniques.

The key difference is introducing these ideas not because ‘this is the new way we are doing things here and you have to do it this way now or else,’ but ‘let’s explore some useful ways to actually help you do whatever it is you feel called to do here.’ The difference is enormous.

Alongside it you can introduce other ideas and practices which are not part of Holacracy and choose not to use parts of Holacracy where there is no clear need.

The idea is not to mandate and force particular new ways of working, but just make them available to everyone, to be adopted where there’s a real need. It can start anywhere in an organisation — from the outer edge where somebody is holding the space for the overall vision, or within a specific sub-initiative to make something happen.

I have a theory that the most artful of all Holacracy implementations could be done without the word Holacracy ever being mentioned at all. The whole thing could just feel like very welcome help towards making things happen. This might also be useful since even the word ‘Holacracy’ has become somewhat tainted (a bit like its friend, ‘Teal.’)

Above all, Good Holacracy doesn’t start with process. The most important thing is the inner work for people collaborating together to better understand themselves and connect to each other. To become clearer in our intentions. To uncover and work through the unconscious biases and stories from our past which shape our behaviour yet do not always serve us.

If you add some strategies for org process and structure to an inner journey like this, the possibilities for people to work together to realise worthwhile ideas in the world are enormous.

Is the Holacracy community split?

The picture I am building up from conversations with folks in the Holacracy world is one loosely divided into two camps. There are certain high profile people and organisations who are like the True Believers, peddling various shades of Bad Holacracy. Sometimes it happens to work when it’s an exact fit for an organisation, and other times it fails because people are just more diverse and complex, and in many cases more advanced than they give credit for. Then there are many practitioners, especially those in Europe it seems (but certainly not exclusively) who hold Holacracy a little more lightly and practice it more artfully, without Holacracy itself becoming the main thing.

I think people like me are really reacting against Bad Holacracy, and we have a justified case. Perhaps Zappos and Medium have at least partially been victims of Bad Holacracy. And the practitioners in the latter category get justifiably annoyed with blanket criticism and warnings against Holacracy. I think owe those guys an apology, so here it is: Sorry!

My goal with this article is to build bridges, not start a fight, so I won’t make this personal and name the specific organisations that seem to be pushing Bad Holacracy. And of course, this is all part of my ongoing research and I could be wrong. If you mix in the Holacracy world you can make your own mind up about what’s happening. The important thing is moving the conversation and the practice around Holacracy in a Good direction.

Where this leaves Holacracy critics

I never thought I’d hear myself say this, but I’m enjoying learning more about putting Holacracy to work and will doubtless make use of it in the future. I encourage other critics to keep their minds open too. Use your power of critical thinking to challenge Holacracy, improve it and create more of the good kind.

For me personally, the most exciting thing about all of this is the potential for the product I’ve been working on, Maptio. It’s a tool for self-managing organisations to visualise who’s responsible for what; who’s helping who and how the overall vision breaks down into ever smaller ideas that contribute to it. It’s there to make it that little bit easier to develop companies and other initiatives without traditional management hierarchy.

Through my explorations and conversations aorund Holacracy, I can see how Maptio could be a fit for people exploring Holacracy of the Good kind and who don’t want the full, dogmatic Holacracy bloat as part of the package.

Maptio never forces anyone to work in any particular way. I sometimes refer to it as the world’s first organisational operating system that doesn’t tell anyone how to operate. With Maptio you can use as much or as little Holacracy as you like, and it can be different in various parts of an organisation. Nothing overwhelming or dogmatic. Best of all, you don’t have to use the words ‘Holacracy’ or ‘Teal.’

Tom Nixon is the founder of Maptio and also coaches and advises other founders on developing purposeful organisations without traditional management hierarchy. You can register here for early, pre-release access to Maptio.

Credit: A big thank you to Sally McCutchion, a certified (and brilliant) Holacracy coach who has patiently helped me work through my concerns about Holacracy, sorting them into fact and fiction, and seeing the potential more clearly.