Holacracy

Holacracy is an organizational operating system adopted by hundreds of organizations around the world using a nested team structure. It refers to teams as “circles” and to the structure as a whole as a “holarchy” (as distinct from a hierarchy). In a holarchy, each circle is not subjugated to those above it, but retains autonomy, individual authority, and wholeness. Circles are grouped within broader circles, all the way up until the biggest circle contains the entire organization. This circle is called the “Anchor Circle”. Teams near the "top" work on wider purposes; teams near the "bottom" work on more specialized purposes. Every circle and role within the holarchy retains real autonomy and authority as a cohesive, whole entity itself, while also having real responsibilities as a part of a larger entity. For a fuller description, see Holacracy's website.

In Holacracy's structure of nested circles, there are specific coordinating roles called “links". Sub-circles elect a representative, the “Rep Link”, for its overarching circle who sits on all that circle’s meetings. The overarching circle sends a representative of its own, the “Lead Link” to be part of the discussion in the sub-circle. Both roles come with specific accountabilities to ensure proper coordination across circle and sub-circle. See also “Role Definition and Allocation”/”Concrete examples for inspiration”/”Holacracy” and Holacracy's constitution.

In Holacratic language, people don’t have a job, but fill a number of roles. (The Holacracy constitution defines a role as consisting of three specific elements: a “purpose” to express; possibly one or more “domains” to control; and a set of “accountabilities” to enact. Some roles will have all three of these parts, though often roles will start out with only a purpose or just a single accountability and evolve from there. A purpose tells us why the role exists: what it aims to achieve. A domain (of which there may be several) specifies something the role has the exclusive authority to control on behalf of the organization— in other words, this role’s “property,” which no other role can mess with. And each accountability is an ongoing activity that the role has the authority to perform and is expected to perform or otherwise manage for the organization.^[1]

When someone senses that a new role must be created or an existing role amended or discarded, they bring it up within their team in a governance meeting. Governance meetings are specific meetings where only questions related to roles and collaboration are to be discussed. A detailed description of the governance meeting process can be found here.

Holacracy's constitution calls for organizing roles into “circles”. The roles a circle contains are a breakdown of what’s needed to express its overall purpose, enact its accountabilities, and control its domains. Circles (“sub-circles”) are in turn grouped within broader circles (“super-circles”) in a nesting fashion all the way up until the biggest circle contains the entire organization (the “anchor circle”).^[2]

In Holacracy, each sub-circle contains a special governance role called the “Lead Link” which is appointed by the super-circle to represent its interests in the sub-circle. The Lead Link does not manage the circle but does have the authority to assign people to roles and to set priorities within that circle.

Holacracy's constitution stipulates that certain specific roles (the facilitator, the secretary, the Lead Link and the "Rep Link") are appointed using a consent-based election. All other roles are appointed by the person holding the team's Lead Link role. (See Holacracy's constitution for a detailed description of the process).

How accountabilities are fulfilled is up to the role-holder. The role-holder is also responsible for tracking and making visible the "next actions" they deem necessary for each accountability, as well as the timeline for completion. Projects are also tracked in this way. This ensures that others who are energizing roles with dependency on another are kept aware of how key accountabilities are progressing; additionally, one role can ask another to prioritize a request specific to a dependency; the role-holder is then required to prioritize the request over those accountabilities where a request has not been made.

Roles are created and amended in a governance process. The question of who fills what role is typically an obvious choice, with whomever proposed the creation of a new role typically being the one who fills it; however, it is the purview of the Circle's Lead Link to assign anyone within the organization to a role in those instances where the choice is less obvious.

How one leaves a role varies from organization to organization. Constitutionally, it is the responsibility of the Lead Link to remove a person from a role when necessary. Some organizations, like the Whidbey Institute, create a roles marketplace where those who wish to move on from a particular role can let others know that it is available; anyone interested in taking on that role may do so through the authority of the Lead Link.

Holacracy has a practice of developing “rules of thumb” in lieu of strategic plans. Brian Robertson explains:

We may not be able to map the perfect route to the ideal future, but we can often ascertain some orienting principles for navigation. Without trying to predict exactly what forks in that road we will encounter, we can ask ourselves what will help us to make the best decisions when we do come to a fork. When we step back to look at the broader context and the general terrain and options in front of us, we can often come up with guidelines, such as “Generally head east,” or “Choose the easy roads even over the most direct roads.” A rule of thumb like this really helps when we’re confronted with a choice and want to benefit from wisdom generated when we had the luxury of pulling back and analyzing the bigger-picture context. When we distill that wisdom into memorable guidelines, we can apply them more easily and more regularly amidst the hustle and bustle of day-to-day execution. This, then, is the form that strategy takes in Holacracy— an easy-to-remember rule of thumb that aids moment-to-moment decision-making and prioritization (the technical term for such a rule is “heuristic”). I’ve found it useful to express these decision-support rules in the form of a simple phrase such as “Emphasize X, even over Y,” in which X is one potentially valuable activity, emphasis, focus, or goal, and Y is another potentially valuable activity, emphasis, focus, or goal.

Now, to make that useful, you can’t just have X be good and Y be bad. “Emphasize customer service, even over pissing off customers” is not helpful advice. Both X and Y need to be positives, so that the strategy gives you some sense of which one to privilege, for now, given your current context. For example, one of HolacracyOne’s strategies earlier in our company’s development was “Emphasize documenting and aligning to standards, even over developing and co-creating novelty.” Notice that both of those activities are positive things for an organization to be engaging in, but they are also polarities, in tension with each other. Our strategy is not a general, universal statement of value— in fact, if we tried to apply it forever it would undoubtedly cause serious harm eventually. There are times when it is essential to emphasize developing and co-creating novelty over documenting and aligning to standards. But for HolacracyOne, given our context at the time, and the recent history before that, and the purpose we’re serving, that was our best sense of what to privilege, at least for a while: standardization, even at the expense of pursuing new and exciting opportunities.^[3]

Governance decisions (decisions about people's roles and accountabilities) are made using "Integrative decision making". All others are made "autocratically".

Integrative decisions making

When someone senses a role must be created, amended or discarded, he brings it up in a governance meeting. These are meetings where only questions about roles and collaboration are to be discussed. That is, separate from the details of getting work done. The latter are discussed in “tactical meetings”, with their own specific meeting practices.

A facilitator guides the proceedings.

Anybody who feels a role change is needed (the proposer) can add it to the agenda. Each governance item is resolved with to the following process:

1. Present proposal: The proposer states his proposal and the issue this proposal is attempting to resolve.
2. Clarifying questions: Anybody can seek information or more understanding. It is not yet time for reactions. The facilitator will interrupt any question that cloaks a reaction.
3. Reaction round: Each person reacts to the proposal. Discussions are not allowed.
4. Amend and clarify: The proposer can clarify his proposal further, or amend it, based on these reactions.
5. Objection round: The facilitator asks, ”Do you see any reasons why adopting this proposal would cause harm or move us backwards?” Objections are captured without discussion; the proposal is adopted if none surface.
6. Integration: If an objection is raised, the facilitator tests the objection for validity. If it is found to be valid, he leads a discussion to craft an amendment that would avoid the objection. If several objections are raised, they get addressed one at a time, until all are removed.

There are strict criteria for an objection to be considered valid. The process might sound formal, but people who use it often report they find it deeply liberating. It addresses issues without the need for corridor talk, politics, and coalition building. Anybody who senses the need for something to change has a forum.

Others are surprised at how efficient this process is.

Holacracy’s governance process is a variation of the advice process. Anyone can bring forward an issue or opportunity (a "tension" in holacratic language) and make a decision happen, after listening to relevant advice. The particularity of the process here is that the advice happens in the setting of a meeting, with a structured number of rounds, and that the decision maker must integrate valid objections, if there are any. The goal, again, is to not to aim for a perfect answer, but a workable solution, and then iterate quickly if needed.

Roles evolve organically, adapting to change in the environment.

Autocratic decision making

In Holacracy, any decision other than governance decisions can be made "autocratically". Only when a "domain" is declared, which should be in exceptional circumstances only, are decisions off-limits to others. In all other cases, anyone can step up and make any decision.

Decisions can be made "autocratically", meaning no one needs to be consulted, and there is no formal process such as in the integrative decision making process. Yet in practice, people are well advised to seek advice when relevant.

If person A makes an autocratic decision that frustrates person B who has an obvious stake in that decision, person B is likely to bring up the topic in the next governance meeting. For example, if person (A), whose role it is to book meeting venues, chooses a new venue without discussing it with the main trainer (B) who has ideas as to what kind of venue is necessary for that specific training. The trainer (B) will suggest to amend the role of person A so that person A must consult the trainer before making decisions on venues in the future. Ultimately it boils down to the same: either person A spontaneously and informally seeks advice from person B, or it is likely that the role person A is currently energizing will be changed so that this role must formally seek advice from the trainer role (person B) before deciding on a venue.

Holacracy has drafted a constitution which complies with U.S. corporate law. It gives shareholders a say in matters related to finance, but prevents them from unilaterally imposing a strategy.

See ^[4]

Holacracy does not prescribe a specific process for dismissals. Starting and terminating people’s contracts originally lands in the scope of the top circle, who can then assign that authority as they see fit. For example, there can be an HR role that has authority to hire and fire. Or in the partnership model (as in HolacracyOne) there is a partnership removal process with partner peer review (similar to Morning Star).

Because there is no fusion of person and title, the lead link in any circle is free to make a decision and remove somebody from a specific role. The person is not fired in this case, but remains in a member pool and must pitch for other roles. If no new role can be found, the person either leaves voluntarily, or a custom dismissal process is triggered.