The link below is to a webinar, Introduction to Holacracy, by Brian Robertson, the founder of Holacracy. It is very well done, a good introduction to Holacracy—very clear and not obtuse theorizing. Since much of the structure of Holacracy is the same a sociocracy, it will also help in the understanding sociocracy.
As a former software programmer, Robertson uses the operating system as an analogy. Holacracy is the operating system and the specifics of the products or services the organization provides are the applications. Microsoft Word enables people using the Mac OS or Windows operating systems to produce documents. Adobe Illustrator allows them to produce drawings.
Unlike sociocracy, Holacracy does not have a compensation system. The compensation policies and structure would be an application that each company would design for itself.
Holacracy does not use consent but it also seems not to override objections. Each proposal must have a tangible example of how it will enable or prevent something from happening. The adoption of a policy is based on how the proposed action will negatively affect the team or individual roles within the team. Such negative effects and all other descriptions have to be tangible well-grounded arguments, not abstractions or hypotheticals. When there are no further objections, the policy is adopted but there is no consent round, which is inferred to be a vote.
Since roles and domains of decision-making are so clearly defined, it is easer to see that proposals “belong” to one person’s role or to a set of roles. It isn’t up to anyone else to decide whether a role needs this proposed action, only whether this action will negatively affect any other role.
An informed article by “Schumpeter” (no first name available), The Holes in Holacracy, included in the print edition as well as online. Schumpeter’s points are really about new branded methods failing. They are gone in 10 years. (Sociocracy on which Holacracy is based has not failed in 40 years.)
EVERY so often a company emerges from the herd to be lauded as the embodiment of leading-edge management thinking. Think of Toyota and its lean manufacturing system, say, or GE and Six Sigma excellence. The latest candidate for apotheosis is Zappos, an online vendor of shoes and clothes (owned by Amazon), which believes that happy workers breed happy customers. Tony Hsieh, its boss, said last year that he will turn the firm into a “holacracy”, replacing its hierarchy with a more democratic system of overlapping, self-organising teams. Until Zappos embraced it, no big company had taken holacracy seriously. Indeed, not all of Zappos’ 1,500-strong workforce are convinced that it can work…
Will conquering Zappos help holacracy thrive in the brutally competitive market for management ideas? There is good reason to be skeptical. “Nine-tenths of the approximately 100 branded management ideas I’ve studied lost their popularity within a decade or so,” wrote Julian Birkinshaw of London Business School in the May issue of the Harvard Business Review. Among the latest cast-offs, it seems, is Google’s much-admired “20% time”, in which workers got a day a week to work on their own projects; the company is reported to be quietly sidelining it.
An article by George Anders on Zappos in Forbes appeared this week. Anders writes about “innovation, careers and unforgettable personalities” for Forbes Magazine and formerly for the Wall Street Journal, two of the most respected and long-lived business sources. I honestly never thought I would see Holacracy, Zappos, Forbes in the same sentence. Kudos to Brian.
This is one of the more sensible articles on the Zappos adoption of Holacracy, less sensationalistic though Anders characterizes Holacracy as “a New Age approach to leadership that involves no job titles, no formal bosses, and lots of overlapping work circles instead.” Any mention of “new age” is fairly sensationalistic and it is inaccurate that either sociocracy or Holacracy have no job titles and no formal bosses. And of course it was not the invention of “business guru” Brian Robertson, nor is Zappos, at 1,500 employees, “by far the biggest company” organize based on these principles.
What Robertson and Zappos have done is attract the attention of many strategy consultants, journalists, and business school professors. Partly this is because Zappos even before deciding to adopt Holacracy was known for innovative thinking on leadership, customer service, and human resources. It is not unexpected that Zappos would adopt a circular organization that respects its employees as it does its customers. The Zappos core values even before Holacracy were to:
The bulk of the article, however, is a summary of William Tincup’s post on the Fistful of Talent blog which raises six points that will challenge Zappos. The original Tincup article is here. I will be doing comments on that article tomorrow.
Posted 9 January 2014 at 12:34 on the Forbes Magazine website, accessed on 11 January 2014:
An article by Jena McGregor In her column, “On Leadership,” appeared in the Washington Post today on Brian Robertson’s contract with Zappo’s, “Zappos Says Goodbye to Bosses.” Zappos is owned by Amazon but runs independently and has long been known for its unusual employee-responsive culture.
The unusual approach is called a “holacracy.” Developed by a former software entrepreneur, the idea is to replace the traditional corporate chain of command with a series of overlapping, self-governing “circles.” In theory, this gives employees more of a voice in the way the company is run.
John Bunch, Zappos “As we scaled, we noticed that the bureaucracy we were all used to was getting in the way of adaptability,” says Zappos’s John Bunch, who is leading the transition.
The article is not particularly clear in explaining holacracy and doesn’t make the connection to sociocracy or other egalitarian organizational methods like Ackoff’s circular organization or Semler’s round pyramid. McGregor is also confusing when explaining the change from “managers” to “lead-links.” Holacracy’s lead-links are described very much like managers. No mention of policy setting by all members of the circle to guide the actions of the lead-link.
The article reports that “Twitter cofounder Evan Williams uses it at his new company, Medium, and time management guru David Allen uses it run his firm — but Zappos is by far the largest company to adopt the idea.”
Robertson began his first company, Ternary Software in Exton PA, in 2001 based on the unique model of forming partnerships with many of the companies for which it developed software. This gave Ternary a vested interest in the performance of the software they designed and allowed promising but still developing companies to access to quality software. In 2006 and 2007, Robertson published two articles on his use of sociocracy at Ternary: “The Sociocratic Method,” in the 2006 strategy+business issue of Booz Allen Hamilton’s internal newsletter, and in 2007 in the Wall Street Journal, “Can a Company Be Run as a Democracy?”.