The last installment of this Building Creative Practices series talked about employing sound strategies for communication in the context of some common organizational structures and challenging dispositions. Since you’ve all read that article and are at this point colleague-whisperers and conjurers of consensus, I thought today’s installment could focus on an uncommon organizational structure – namely, holacracy.

Holacracy was introduced as a concept for exploration and critique for the director’s team at Filament by Art Director and itinerant Pokémon wanderer Alexander Cooney. With reference to “Beyond the Holacracy Hype” written by Ethan Berstein, John Bunch, Niko Canner, and Michael Lee for the Harvard Business Review, holacracy can be defined as “a form of self-management that confers decision power of fluid teams, or ‘circles,’ and roles rather than individuals.” HBR argues that this is part of an evolution in organizational governance that started in the 80s with a shift towards “adhocracy,” which refers to informal management structures. Holacracy refines that general concept into something more modular and aligned with modern Agile methodologies.

HBR also argues that the impulse behind this kind of model can be summed up by two motivators: reliability and adaptability. But how does holacracy embody those two things specifically? It actually depends on where you are in an organization. For ground-level workers, holacracy affords the ability to adapt to granular conditions without running each decision up through a series of bureaucratic approvals. It also means that decisions for their team are made by considering those same ground-level conditions, which will provide them with greater efficiency and processes that are reliably tailored to their specific needs. (I stopped myself from calling them bespoke processes because I think I’m near my buzzword cap for this article.)

For shareholders, reliability and adaptability need to apply to the organization holistically, and so the real advantage of holacracy for this cohort is the efficiency it creates. The burden of micromanagement is removed when teams are self-governed, and there’s lots of evidence that organizations’ products benefit from greater reliability when they let the people that do things do them. HBR offers a few datapoints – self-managed teams reduced defects at a Volvo plant by 90%; General Mills increased productivity by up to 40% in plants that adopted self-managed teams; Fedex cut service errors by 13%. These are the kinds of changes that foster organizational reliability – more product served up in a timely fashion with fewer flaws.

Who Actually Uses Holacracy?

Lots of places use some form of self-management. I just rattled off a few in that last paragraph, so let your eyes wander back up there for a refresher. Done? K. Another organization that famously adopted holacracy is Zappos, splitting their organization up into a bunch of those holacratic “circles” I was talking about earlier, and they’ve actually put a lot of writing out about their specific form of holacracy – check it out here. Valve (the developer of Half Life and the Steam PC gaming mega-store) uses a similarly flat structure that is built on “cabals” which is another word for “teams” which is another word for “circles” which is another word for “pods.” Are you sensing a pattern? Me too. This actually leads me to the first of three characteristics that HBR identified as shared by self-organization models.

• Teams are the structure.
  Whatever you call them, these units constitute the elemental structure of holacracy. Within the team unit, roles are defined according to the work, which allows organizations to evolve in many directions at once. For instance, due to the modular and horizontal (read: flat) structure of holacracy, teams can form around new tasks or initiatives with members self-selected for the highest level of enthusiasm and aptitude for that new initiative. Cross-departmental germination of this kind is difficult if not impossible in a rigidly defined structure that confines workers to one discipline or initiative. HBR astutely points out that a top-down management paradigm has resemblances to an assembly line, whereas a holacratic structure is more akin to a biological organism that rapidly adapts and evolves based on its environment and present challenges.

• Teams design and govern themselves.
  Not only do these teams select their own members; they also define their own roles and responsibilities. Holacracy depends on an organizational set of standards that each circle uses to inform their day-to-day operations, but it’s up to the team to determine how they embody and enforce those standards for themselves. This facilitates the traits of adaptability and reliability that underpin the impetus for self-managed teams in the first place. If a team sees a process that isn’t working either because of the task or the makeup of the team, they don’t have to call a strategic moot with all of the company’s managers and stakeholders and start a months-long procedural roll out of the new model – they just change the process. A simple, yet revolutionary idea. It’s almost as if holacracy creates a path away from the sometimes-arbitrary nature of leadership, which leads me to the third characteristic.

• Leadership is contextual.
  Rather than picking a manager and saddling that person with all of the decision points for a given task or team, holacracy enables a more organic form of leadership that allows for individuals to take the lead when it’s appropriate to their skillset and disposition. Think about a team you’re on without a formally defined leader – I bet you can still identify the people on that team who are the most outspoken, or the most insightful, or the most industrious. Even without a formal appointment, those individuals are providing a form of leadership to your team, and that’s the basis for contextual leadership. The structure of holacracy means that individuals can occupy roles that are especially suited to their capabilities, with the fluidity to defer to someone else on their team when they encounter something to which their abilities are not especially suited. In this case, adaptability leads to reliability, because within the team, individuals can shuffle roles, which allows the team to consistently retain its overall reliability.

Should I Use Holacracy?

So is holacracy right for you and your organization? It seems like it would be almost un-holacratic to say “yes.” The core philosophy of holacracy is one that emphasizes building a structure around your reality, rather than trying to force reality to comply with your structure. You’ll have to analyze your own organizational strengths and weaknesses when considering an avant garde structure like holacracy, with the acknowledgement that it’s going to take a lot of work and refinement to strike the right balance for your company’s mission and mandates. If you do experiment with holacracy or perhaps a more tentative implementation with holacratic elements, let us know! We’re always exploring new ways to think about doing creative work, and would love to hear what you think on our Facebook or Twitter…