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Holacracy: The Revolutionary Management System that Abolishes Hierarchy Paperback – 2 Jun 2016
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Holacracy is the opposite of the cliché way to run a startup. People romanticize startup cultures and their lack of structure, but it creates anxiety and inefficiency, whether we have to build consensus around every decision, or deal with land grabs for power. In contrast, Holacracy creates clarity: who is in charge of what, and who makes each kind of decision - and there is a system for changing that, so it's very flexible at the same time (Evan Williams, co-founder of Twitter and Medium)
This book reminds me of a book that I must have read 100 times during my quest to become a better poker player. The first reading will most likely result in a complete paradigm shift, and you'll gain new insight every single time you reread it, especially when interspersed with actual practice playing the game on a regular basis. I highly recommend this book as your 'Holacracy Bible' if you're looking to explore a new way of working (Tony Hsieh, CEO of Zappos and author of the #1 New York Times bestseller Delivering Happiness)
Holacracy is a difficult concept to understand, but its founder Brian Robertson breaks it down simply and thoroughly. Regardless of your conclusion about the system's potential, it is undoubtedly the alternative management approach that will be getting the most attention over the next few years as we see how it affects thousands of employees around the world. (20 business books to read this summer World Economic Forum 'Agenda')
engagingly straightforward (Bloomberg)
About the Author
Brian J. Robertson created Holacracy and founded HolacracyOne, the organization that is training people and companies all over the world in this new system. Robertson had previously launched a successful software company, where he first introduced the principles that would become Holacracy, making him not just a management theorist but someone who has successfully implemented a holacracy-powered organization. He lives in Philadelphia.
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I came away fundamentally unsatisfied. This feels like a Cliff Notes version of Holacracy rather than something that would convince me to try it out in my company. The author (eventually) makes a good case for the governance meetings, though I feel like the explanation was spread out across multiple chapters. For instance it isn't until Chapter 10 (a chapter ostensibly about how to adopt Holacracy piece-meal if wholesale adoption is impossible) the author explains "change your language, change your culture" and why the terms "tension" and "tension processing" were chosen. I feel like this discussion should have been up in Chapter 4 when the governance meetings were introduced.
I think in general the book does a good job of explaining the "what" of Holacracy but is pretty hit-or-miss when it comes to explaining the "why". Another example is the repeated claim that you "can't adopt only parts of Holacracy". This includes a rigid formula for meetings that includes a closing round where you go around the room and "give each person space to share a closing reflection about the meeting". I'm not saying that's a bad idea but I don't understand why that is integral to Holacracy. If I leave out that one part do I really lose all the benefit of Holacracy? I guess I'm just skeptical of that.
But the biggest failing of the book is that is it just too light on implementation details. This comes out in two main areas: role definition and the "apps" that are suddenly introduced at the end of the book. For the role definitions, Holacracy seems to rely in an almost legalistically complete role definition. Since Holacracy has been rolled out in many companies, I'm not saying it is impossible to do. But that book doesn't really give any real world examples of how this role clarification works in large and messy teams.
How many people really know all the roles they fill and what the scope of all those roles are? How do you realistically make that switch? I'd have loved to see that detail.
What about jobs where you seem to have a lot of people who are somewhat interchangeable? How does that work. For instance, imagine a software team with 15 developers working in a normal scrum-kind-of-way where you take stories from the top of the backlog. What does the role definition look like for them? What is the scope of their autocracy? I'm sure there are answers but the book doesn't provide any, instead relying on contrived examples in a company that appears to have about 5 employees.
But my single biggest complaint is when you get to Chapter 8 and a subsection introduces "apps". By that point I was skeptical on some details, didn't fully by in, but felt it had some good and interesting ideas. But I had these nagging questions at the back of my mind and was wondering when the book would get around to providing some answers.
"How do you set salary? How do you give raises? How do you give promotions? How do you make hiring and firing decisions? How do you decide to shutdown an entire office and lay off 150 people? How do you decide to IPO or accept a buyout? How do you set budgets and enforce them?"
The book's answer is...."You could design your own system, given your specific needs, but you may find it useful to check out [the HolacracyOne] 'app store'."
No link or URL is provided. It is hard to get excited about designing from scratch my own systems for these things (I don't expect a perfectly formed solution that requires no tweaking but starting with a totally blank canvas?) and I'm also not excited that the answer is to go read a web page—I bought this book for a reason, hoping it would make a compelling argument.
(FWIW, there is exactly one "app" on the "app store" for compensation. It sounds interesting but it also sounds similar to the compensation system a startup called hanno.co blogged about using...and then nine months later blogged about moving away from. So I'm not exactly sold on it as a great option.)
“In today’s post-industrial world,” author Brian Robertson explains, “organizations face significant new challenges: increasing complexity, enhanced transparency, greater interconnection, shorter time horizons, economic and environmental instability, and demands to have a more positive impact on the world.”
The problem is not only that we don’t change fast enough, but that the employees sense this dissonance, and they don’t like it. Most have at least a vague sense that organizations seem designed not to get the best out of them.
The quest for stability and success was believed to lie in up-front planning, centralized control, and deviation prevention. This model worked well enough in the simple and static environments of the industrial age.
This book deals with the restructuring of organizations. It is not that we haven’t tried to restructure our organizations, we most definitely have tried, but we haven’t succeeded because all our changes have not gone far enough. We have merely bolted changes onto a conventionally-structured organizational system.
As an example of the problem of this change, Robertson tells of a company which had adopted empowerment as a primary issue. When a much loved leader was fired, one of his team, lamenting the departure of his boss, turned to his co-worker and asked: “Who will empower us now?”!
This book is a sterling guide to making our organizations not simply more evolved, but to turn our organizations into an evolutionary organism, “one that can sense and adapt and learn and integrate.”
Holacracy bears a striking similarity to the way the human body is designed to function efficiently and effectively. It does this through a system of autonomous, self-organizing entities distributed throughout the body. The body processes extraordinary amounts of information each moment, that would be impossible to centralize at the top, in the conscious mind.
Consider the difference between the bureaucratic organization of a company and the self-organization of people in a city. In a city, people share space and resources, and almost all of them understand their boundaries and their responsibilities. When these laws are obeyed, the traffic (for example,) flows and we move about faster. Yes, there are governing bodies to define and enforce those laws, but the residents of our cities don’t have to wait for authorization from the boss for every decision they make, they have plenty of autonomy.
This image of a city was shared with the author by Tony Hseih, one of the founders of the exceptional online shoe company, Zappos, that has a turnover of $1b and employs 500 people. “I’m trying to find a way to run Zappos more like a city,” he said, and engaged Robertson to do so after hearing his talk about Holacracy.
“In contrast,” says Robertson, “the power and authority within (a conventional) organization is tight, we establish who can expect what, and from whom, and who can make which decisions, and within what limits. This command and control is at odds with what we need, and how adults wish to be treated.”
The holacratic organization is comprised of roles that are required to fulfil the purpose of the organization – management, finance, marketing, production, etc. People are assigned to these roles with clear responsibility to fulfil the role in the best interests of the organization. They own the role fully; no one can make decisions about their role for them or interfere in its execution. If there is something wrong with the role - it is too large for one person or clashes with another role - this governance issue is discussed at one of the regular governance meetings so the matter can be resolved quickly.
There is a strong distinction between a person and the role. Clashes are between roles, not people, and roles mutate or are adjusted as needed.
These roles are not just a fancy way of describing a job description. Job descriptions are intended to be static, at least for a while if well-constructed, but Holacracy’s roles are intended and expected to mutate as the company and is need from the role changes.
The decision to change is made by the occupants of the roles themselves, not the CEO. Their only criterion is what is good for the constitution that guide the organization.
In effect, the decision-making is devolved to the local level. No one can co-opt the power of others. When assisting companies to transform into Holacracies, Robertson delights in telling CEOs that they no longer have the power to make decisions beyond their role. The CEO has in fact ceded his power to the constitution that governs the organization, and no matter how good a dictator he is, he is never better than a good constitution.
Elliott Jaques, the organizational psychologist, identified three distinct types of “structure” in any organization. There is the “formal structure”—the organizational chart and the job descriptions, often far removed from real day-to-day events and needs. There is the “extant structure”, the structure that is actually operating, even though it is unstated. It describes who really makes decisions, or who really owns which projects. Then there is the “requisite structure,” which is the structure that would be most natural and best suited to the work and purpose of the organization. The Holacracy is this structure, articulated and documented and lived. Holacracy offers an alternative way to structure an organization, and needs to be seriously considered, and then adopted!
Readability Light ---+- Serious
Insights High -+--- Low
Practical High +----Low
*Ian Mann of Gateways consults internationally on leadership and strategy and is the author of
Strategy that Works. Views expressed are his own.