Holocracy: What is it? Another overused bit of jargon?

It's an alternative: It brings structure and discipline to a peer-to-peer workplace

David Rigby

Published: Updated:

I read a recent article which stated that the eight most overused bits of jargon are:

1. Transformation (24%)
2. Millennials (16%)
3. Disruption (11%)
4. Agility (9%)
4. Purpose (9%)
6. Human Capital (8%)
7. Responsiveness (6%)
8. Holacracy (1%).

So here you go: “Millennials lack purpose and agility so then give disruptiveness as their responsiveness to transformation caused by holacracy being imposed on Human Capital”.

But what is Holacracy? I had never heard of it!

The traditional hierarchy is reaching its limits, but “flat management” alternatives lack the rigor needed to run a business effectively. Holacracy is a third-way: it brings structure and discipline to a peer-to-peer workplace.

Authority and decision-making are distributed throughout self-organizing teams rather than being vested in a management hierarchy. In its emphasis on iterative governance, adaptive processes, and self-organization, Holacracy draws inspiration from agile software development principles and the lean manufacturing process.

And that means it’s highly compatible with 6Sigma methodology which is inappropriately all the rage in UAE at the moment.

Roles instead of job descriptions

Holacracy fundamentally differentiates the roles of the organization from the people working in it. And one individual can hold multiple roles at any given time.

Roles are defined by each circle or team. Circles are organized hierarchically, and each circle is assigned a clear purpose and accountabilities by its broader circle. However, each circle has the authority to self-organize internally to best achieve its goals.

Circles are connected by two roles, which sit in the meetings of both their circle and the broader circle to ensure alignment with the broader organization’s mission and strategy. The system of distributed authority reduces the burden on leaders to make every decision.

Zappos is an online shoe and clothing shop based in Las Vegas, Nevada. It is regularly cited as in management and leadership books. According to Zappos' Holacracy makes individuals more responsible for their own thoughts and actions and it helps prevent typical gender-biased behaviours as it provides protections that create an environment in which some actions based on unconscious bias are not possible."

However management and leadership author Steve Denning warned against viewing Holacracy as a panacea, claiming that instead of removing hierarchy, decisions are funnelled down from circle to circle in a clear hierarchy, with each subsequent circle knowing less about the big picture than the one above. Denning added that the voice of the customer was missing from the Holacracy model, concluding that for agile and customer-focused companies such as Zappos, Holacracy is a way to add administrative rigor, but that Holacracy would not necessarily work well in an organization that did not already have agility and passion for the customer.

According to Brian Robertson’s book “Holacracy” the approach is officially used in over 300 organisations in Europe and United States. Will it work in UAE? Its hierarchical structure reflects the way business is done here, but delegating decision down to the lowest level is not Middle East’s style, nor is having multiple roles instead of a job description clearly indicating what you are allowed to and by implication what you are NOT allowed to do.

Its approach of bringing rigour to organisational flexibility is certainly interesting. It would require very strong change management skills in HR to use properly here.