Democracy, meritocracy, bureaucracy, autocracy, plutocracy and holacracy are all words which focus on how power is distributed throughout a group of people and how members of the group can obtain positions of power. In a democracy, the people decide. In meritocracy, a person’s ascension to and retaining of power depends on his or her ability to achieve goals. Individual talent doesn’t matter in a plutocracy, money wields power. In autocracy, a very small group or person wields absolute power and certainly doesn’t leave and tell-tell signs about how another person can gain power. Holacracy has joined these words which describe power and governance relationships between leaders and “the governed” or in terms of business, between executives, managers and the rest of the organization.
This blog as well as the next three will focus on holacracy as an operational and governance process. Today’s blog is a general description of holacracy. The next one will cover building holacratic circles. The third blog will look at operations according to the holacratic model and the fourth will look at governance procedures.
Don’t worry if your mind can’t recall learning about a holacratic form of governance in your high school history classes. The idea of holacracy has only been on the radar since 2010. In the past few months, though, holacracy has been heating up management blogs, ever since the announcement by Zappos founder Tony Hsieh that Zappos is changing its vertical management style to a flat, holacratic style. His decision has made news because not only is Zappos a well-known brand, but also because it is the largest company to date to enact holacracy. Other companies of up to 50 people for instance, Medium, a curated blog website, are successfully implementing holacracy, but this is small compared to the 1,500 Zappos employees who will work under this style. Zappos success will prove one of the fundamental beliefs of holacracy. That is that the model replicates itself organically, thus can be used in behemoth-sized institutions as well as small businesses.
The essentially philosophy of holacracy is contained in the word itself, with holan meaning an autonomous and self-reliant group which depends on a greater whole of autonomous and self-reliant groups to be successful. A visual representation is a collection of small dots that overlap a little to form a circle; the circles overlap somewhat forming larger circles. The largest circle is the organization itself. Let’s take a concrete example to understand the circles better. This is a business of 24 people who are broken down into three groups: sales, curriculum development and tech designers. Each group contains 8 people. These people can also be in smaller groups depending on different projects. There is a representative who also sits on another group at the same level and a representative that sits at the circle in the level above. The small group sets their own tasks and own governing rules as to how the group works to achieve its goals. The group also elects a leader to guide it through completion of a specific task. The leader can change with the next task. The goals of the small groups up through the various levels of circles until the largest circle, the one that encompasses all functions, is to create tasks that enhance the mission of the enterprise while ensuring that the day-to-day functions of its group is maintained. Groups can disband and groups can form as potential members see fit. The idea is to create empowered employees that convene according to needs they see and an overall structure which organically swells and reduces, disbands and reorganizes and flows from project to project depending on the needs of the company at that time. According to designers, this fits agility models, vertical supply chains and lets people on the ground, closest to the day-to-day operations inform the rest of the company, a communication link that many companies say is weak.
However, the holacracy model does not address how employees, managers and just people in general arrive at the point where they can positively function in this model. Holacracy depends on communication, group goal setting and group collaboration. Observation, speaking and listening skills are extremely important and people, from lowest-paid employee to highest-paid executive need skill enhancement in these areas. In fact, almost all previous posts on thinkingintegral.com blog deal with how to develop these soft skills which are becoming very hard currency in the knowledge-based economy.
The next three blogs will deal with more specific descriptions of tenets of holacracy: building groups, governing groups and operating groups. Also, the blogs will examine soft skills all members of a company need to hone in order to effectively integrate a holacratic operating system.