Holacracy - how do companies function without bosses?

Service Business

Probably the dream of a large number of employees of smaller and larger companies is to be a boss for yourself or not to have a supervisor for at least one day of work. Until now, an effective way has been to simply start your own business - but recently, another concept has been added. It is a holacration and, to put it simply, it is a company management model in which there are no positions or superiors. How does it work?

Holacracy - what is it?

Holacracy (sometimes also called holocracy) is a company management system developed at the beginning of the 21st century in the United States, which consists in the resignation of superiors and specific positions. Its name derives from the philosophical concept of holarchy introduced by Arthur Koestler. A holarchy is a hierarchy of holons (Greek holos - whole), i.e. certain wholes that, together with other holons, combine into larger units within a specific system. Holacracy is literally the rule of the holons - don't worry, it's not the title of a science fiction movie.

Holacracy was created at Ternary Software in Pennsylvania, which was working on a democratic management system. The initial assumptions of holacration were developed in 2007 by Brian Robertson, and three years later the first edition of the Holacration Constitution was created. It has been modified since then and we are now dealing with version 4.1.

What is holacration? It is first and foremost a system that rejects the current, classic model of the company's operation, based on superiors of various levels and specific positions and departments existing in the same shape. Enthusiasts of the idea claim that holacration reduces the length of decision-making paths and the phenomenon of passing responsibility on to other people - the new system is primarily to be a more effective use of employees' potential and skills.

How does holacration work?

When presenting the principles on which holacrations operate in the most general way, at the beginning two concepts should be developed: circle and role. A circle can be made up of one or more employees and can be compared to something like a task force. Smaller circles - sub-circles - run within the super-circles. Nevertheless, they are very autonomous.

A role is a set of tasks that belongs to a given employee within a given circle. One employee can play different roles within different circles - it all depends on his skills and competences. The employee is not strictly assigned to the role and can change it, but these changes must not hinder the work of other members of the circles. Each of them should have three roles - let's call them technical - leading liaison (lead link), rep link and facilitator.

The leading link is a person who is selected for a specific circle B from the parent circle A and his task is to organize the work of circle B - assigning people to specific roles, defining strategies and priorities. It is worth remembering, however, that the role of the lead connector is not the same as the classic manager's position and does not take precedence over other roles in the wheel. The hyphen-representative is the role of representing the circle B outward. He is selected from among the members of circle B, and his task is to present the achievements of the circle in superior wheels, relieve tensions, i.e. discrepancies between the actual and expected state, and eliminate obstacles that make the work of circle B. constitution of holacracy. The role of the mediator is particularly evident during governance meetings, which aim to configure the team to perform tasks as efficiently as possible. Another form of meetings are operational meetings where the implementation of day-to-day tasks is discussed.

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Holacracy - What's Innovative About It?

Reading the previous paragraphs, you might get the impression that holacration is really nothing new, because by analogy you can see there classic managers, a system of subordinates and superiors, meetings, etc. the holons mentioned at the beginning). All roles within the system are equally important and there are no employees who are more important than others. Decisions within the circles are made through discussions and consultations - time is saved for digesting decisions through all levels of the hierarchy, and employees can focus on work based on their own skills and experience. Holacracy is precisely this extraordinary permeability of decision-making channels - thanks to this, each employee is a manager within their own role (s) and tasks that are ahead of them. He tries to do them as efficiently as possible.

What distinguishes classic management models from holocracy?

  • Understanding of work stations. Classic positions, one-dimensional, often ineffective and unnecessary, have replaced the roles, variable depending on the activities performed, corresponding to the current requirements.

  • Possibility of reorganization. In classic models, it is almost impossible or requires huge changes - holacration allows you to quickly adapt the company model to a given project.

  • Decision-making - in classic models, it falls on the shoulders of managers, sometimes detached from the actual needs and capabilities of departments. In holacrations, decisions are made collectively within a specific circle.

  • Equality of rules. In holacrations, despite the formal hierarchy, every employee is treated on the same basis.

  • Decentralization. In the classic model, everything is ultimately focused on the CEO, chairman of the board, etc. In holacrations, decisions are made "locally", on the basis of circles, and they are binding.

In addition, holacration enthusiasts claim that it is a system that motivates people to work effectively. In their opinion, responsibility for work concentrated in the hands of a specific person who performs it is a more effective motivating stimulus than "sticks and carrots". Holacracy is still an experimental system, but more and more companies decide to introduce it.