Week 23, 2019
Organizational OSs: Sociocracy, Semco Style, and Holacracy.
Each week I share three ideas for how to make work better. And this week, those ideas come in the form of organizational operating systems.
The discussion is a continuation from w212019 on governance models. In that piece, I proffered the organizational OS as one way to describe an organization’s inner workings. Here, I discuss three such systems in an effort to explain what they are and how they work.
Let’s dig right in.
1. Sociocracy
Sociocracy is a governance model that emphasizes equality and self-management — two seemingly modern ideas. But you’d be surprised. Sociocracy came out of the Netherlands in the 1950s and 60s, and it traces its roots back even further — to the mid-1800s. It’s sometimes referred to as “Dynamic Governance”, and it provides guidelines for how to structure and organize work and decision-making. Rather than traditional hierarchies that skew autocratic, Sociocracy advocates working groups called “circles” that forward specific interests within the organization. Circles include a number of elected members who make decisions through consent rather than consensus. And they execute those decisions according to a build-measure-learn workflow that looks remarkably similar to what we today know as Agile (see w522018). And yet despite this, Sociocracy has remained largely obscured with few devotees outside its native Netherlands.
For more, check out this 4-minute video from Sociocracy for All, and if that’s not enough Wikipedia can help fill in the blanks.
2. Semco Style
Semco was a Brazilian manufacturing company lead by Ricardo Semler who, in the 1980s, took over the business from his father. While not a household name per se, Semler is an icon in the organizational design space. In the span of two decades, he managed to turn the traditional manufacturing company into a hallmark of self-management and radical transparency. Case in point: Semco employees were given unlimited leave and the ability to set their own salaries decades before startups in Silicon Valley started to experiment with similar practices. Today, Semco has evolved into a group of companies employing some 5,000 people. And Semler himself spends his time teaching his management practices to other organizations. Which is why “Semco Style” makes it onto the list. As a student of the Semco Style Institute, you’ll learn how to organize “wisely around humans instead of smartly around structures and procedures.”
For more on Semco, check out this short writeup. And if you want more on Semco Style, please see this 4 min video on core principles.
3. Holacracy
Holacracy is best understood as an extension of Sociocracy. Its foundation is very similar and it incorporates some of the same practices (e.g., nested circles, roles rather than titles, and consent-driven decision making). But there are differences as well. Whereas Sociocracy starts with the idea that organizations are for people, Holacracy takes the opposite view (that people are for organizations) and that organizations have a purpose beyond the individuals that they comprise. It’s a philosophical difference that has real-world consequences. Sociocracy is, for example, relatively light on details — preferring to let organizations find their own way through trial and error. Holacracy, meanwhile, is extremely regimented with a detailed process for how to make certain kinds of decisions, etc. And it’s not hard to see why that’s the case. Brian Robertson, the creator of Holacracy, has a background in Agile software development — an industry that doesn’t take lightly to things like ambiguity.
For more, read the book or listen to the 2-part interview with Robertson on the Leadermophosis podcast.
Back in w212019, I placed three different governance models along a continuum ranging from implicit (no formal structure) to the explicit (more formal structure). And I placed the operating system model on the far right of the spectrum.
That’s not to say that all OSs are the same. On the contrary. There exists a wide range of “formality” within this subgroup. And as is obvious from the above, Holacracy should be placed on the far-right of this far-right subcategory.
In the end, the choice of governance model depends on the organization and the people it comprises. But it should be a choice, not an afterthought or, worse, an accident. You’ve got options. Make it an explicit decision.
That’s all for this week.
Until then, stay calm.
