It’s a challenging time for organizations and leaders. Terms such as “self-management”, “self-organization” and “Holacracy” fly around our ears. The self-steering movement seems to have reached a critical mass and is growing exponentially. More and more leaders are opting for self-organization instead of a top-down “command and control” structure. This revolution is making us think about alternative methods for organizations to function.
In my article about Zappos and his former CEO Tony Hsieh, I already dropped the term “Holacracy”. Zappos has contributed to the popularity of Holacracy, which was previously seen as an obscure high-flyer. After all, this system removes the “beloved” top-down hierarchy. It transforms organizations into a modern corporate democracy, where self-management prevails. But do we want this at all? And perhaps more importantly: does it work?
What is self-management and “Holacracy”?
Let’s start by peeling off this topic. As you are used to from me, I start with my definition of self-management:
Knowing exactly what you’re responsible for and having the freedom to meet those expectations in a way that you think is best.
Holacracy is best seen as a system for self-management. As a programmer, founder Brian Robertson wanted to find a solution to what he saw as “barriers to productivity, creativity and transparency”. Holacracy’s rules of the game were laid down in a so-called Constitution. This book contains clear rules on which the organization must be built.
The Holacracy Constitution aims to prevent traditional bureaucracy and office politics. A major advantage over other self-organization systems is that Holacracy does not require a completely flat hierarchy. As a result, you do not have to reorganize as radically.
Maturity levels for self-management
In the overview below I have sequentially mentioned which maturity levels you can differentiate, if you look at self-management. At each level you can clearly see what the (decreasing) role of management is and what the expectation is of the self-managing teams.
1. Independent teams
Independent teams stand on their own two feet, but always work on the basis of prescribed goals, frameworks and a vision. Line managers have limited influence and only set out the rough lines. We see independence in teams, especially in teams that have the same composition for a longer period of time or where the team members contain a certain form of seniority and /or professionalism.
2. Self-managing teams
We traditionally see self-managing teams mainly in healthcare, but in recent decades we have also gained a foothold in other sectors. We are referring to teams that operate in a responsible manner. These teams determine how they do the execution themselves and determine their own goals. This is all done within a defined vision and frameworks. Line managers, who are mainly focused on setting and monitoring goals, have disappeared. A perfect example is police Gelderland. This unit consists of many self-managing teams that serve the citizens in their region in their own way.
3. Self-managing organisation
In this advanced level, we see an increasingly central role for the joint mission and objective. Each organizational unit determines its own vision. In general, you set a powerful framework, with plenty of room for interpretation and execution. This means that the management consciously comes at a greater distance from implementation and policy. The municipality of Hollands Kroon is a good example: teams determine their own vision and goals. They serve citizens through innovative and appropriate solutions that fit within the mission and frameworks of management and administration.
4. Cyane of Holacracy organization
In the most advanced level, the mission (/higher goal) is leading. Every organizational unit has great freedom to realize the mission and the management exercises no influence on this. The “holacratic organizational model” is the most concrete example of this. Both vision and execution are determined in so-called “circles”. Even frameworks are part of self-management and can be adjusted by employees.
This form of self-management is made possible by a powerful, lively mission that predominates in the workplace on a daily basis. On the basis of clear and detailed procedural rules, responsibilities and powers may be changed. Some holacratic organizations speak of “ground rules”. In it, the core values of the organization have been elaborated into rules of conduct and expectations. Holacracy offers a predefined set of powerful rules. These rules “monitor” the realization of the mission.
Holacracy abolishes all senior management titles and “redistributed power” by replacing job descriptions with roles. Each role has its own responsibilities and domain of competence. The domain defines the property of the role, or the areas over which the role holder has authority. This authority enables role holders to make quick decisions about questions about their domain. Teams are organized into autonomous circles that have the authority to make decisions about everything. Think of small departmental changes but also rapid iterations of the structure of the circle. Teams are allowed to make decisions during moderated meetings. This gives participants the opportunity to express their tensions or concerns in a structured way.
Examples of Holacracy organizations
Experts claim that Holacracy works well for some organizations, with an implementation in other types of organizations leading to frustration. Some companies that practice Holacracy satisfactorily:
For Zappos, the decision to switch to Holacracy was based on the growth of the company. As former CEO Tony Hsieh explained, research has shown that productivity declines as companies grow. Zappos sees Holacracy as a way to counter this trend. After all, employees are given more power and autonomy to manage their own work themselves.
After a long transition process, Hsieh shared his famous but infamous memo in 2015. Zappos went “all in” on Holacracy, issuing a “take it or leave it”. 14% of the employees left and made use of a departure bonus. But Hsieh was satisfied, because the other 86% wanted to change. This led to reactivation of the culture and laid the foundation for a healthy expansion of his beloved and fruitful corporate culture. Zappos employs approximately 1500 people.
In order to successfully implement Holacracy, organizations are usually advised to decide that top-down and then change course in one go. Within Bol.com, Harm Jans has been responsible for the introduction of self-organization at the webshop since 2015. According to Harm: “We ask our people to take a lot of responsibility. They get a lot of autonomy and flexibility in return.”
With the help of Spark (their own variant of Holacracy), a possible implementation is looked at per organizational unit. So not in one go, but step by step. The implementation of self-organization at bol.com works through active promoters who started a movement bottom-up in the organization. The iterative way of roll-out has proven successful and is still in full swing.
Voys is a Dutch organization that offers a VoIP service for companies. In 2015 she introduced Holacracy in her organization, as part of the so-called “Voys Model”. This is an organizational model without managers and without functions. This allows employees to “get the most out of themselves in an environment in which they are given trust, responsibility and decision-making authority”.
Voys believes that people only develop with these preconditions, are happy and thus contribute optimally to the organization: “After all, happy employees ensure happy customers.” Voys likes to share her experiences with other organizations, and have therefore written several articles about the Voys Model and holacracy.
Is Holacracy something for your organization?
Robertson estimates that 80% of companies continue to use the system after a year. Hsieh has also admitted that the transition process can be challenging and will take time. Therefore, a few things to keep in mind before you take the plunge:
- One of the most difficult aspects of applying Holacracy is that it requires not only an organizational change, but also a complete change in the corporate culture and mentality;
- With such a complex and detailed system, the transition process requires a significant amount of time and training, reducing productivity;
- The prices for training are quite high, which requires a significant financial investment. This can be especially difficult for smaller businesses;
- Most importantly, you have to be willing to lose employees. Not everyone will want or be able to stay on board, especially in the initial phase where uncertainty prevails and involvement is important;
- While it gives employees more freedom to express their opinions and manage their own work, no guidelines are given for HR. This obliges companies to develop their own HR methods that are in line with the principles of Holacracy.
With these points in mind, it may seem daunting to switch to a Holacracy, and for some, it may not fit well. But if your organization can successfully implement it, the reward can be a company that can develop and adapt quickly, with employees who are dedicated and motivated.