New Ways of Doing Business: Why Holacracy Works
Don't believe the naysayers on Holacracy; it works for us at ArcherPoint. In our third year, it has proven to be a powerful organizational model that evolves organically to meet our growth-centric strategies.
The main critique I see online is that Holacracy is about role, not soul. While this may be true, it’s the soul that energizes those roles. Just like your soul energizes your life. And it's a beautiful thing to see that same soulful energy rapidly create new ways of doing business through Holacracy.
What Holacracy Is
Holacracy has been described as an operating system for business, where circles (departments) and roles are applications for the operating system. I prefer to think of a business model based on Holacracy as an organism rather than an organization. Each circle is like an organ in a human being, and each cell has a role. Every “circle” has a purpose that supports the “super circle.” Holacracy has no limitations. It allows your business model to evolve into any organism you can imagine. In fact, it can evolve very rapidly into a whole society of organisms.
Roles, not Titles
For those that say they prefer to delegate authority to people instead of roles: you’re setting yourself up for failure. This type of failure I call the “unicorn problem.” If your employees have “titles” and authorities not defined in roles, when that person leaves or evolves personally, your business will suffer because dependencies on the person will eventually break.
By the way: unicorns don’t exist. In non-Holacracy organizations, it’s easy for me to feel the tension that exists around the unicorn mentality. When unicorns leave, for whatever reason, vacuums are created and there’s no clear plan moving forward.
Dependable, not Dependent
Just like in an ERP or operating system, dependencies should never be broken. Unicorns create dependencies that will break and are hard to fix once broken. In a Holacracy, roles and circles are re-usable, stable, and can be easily fixed through evolution. In Holacracy, this is called governance. Roles can be filled by multiple people, and people may fill multiple roles. People dependencies should not break the organism. When people leave a Holacracy, it may cause stress on a soul level (and it can certainly be heartbreaking), but, organically, the operating system is not broken. Roles simply need to be filled. A Holacratic distinction is roles, not titles.
Accordingly, this makes the hiring process much more effective and straight forward. In traditional companies, people are hired and given titles. Their jobs may evolve, but this is less likely to occur in a traditional top-down hierarchy. Again, within a Holacracy, people fill multiple, clearly defined roles based on business needs. Because this facilitates a continual evolution, these roles can be filled by others – or new hires – as needed. Since the roles are already well defined, it's easier for the following person to work into and understand the various facets of that role. In both cases, a Holacracy provides for a smoother and more efficient transition.
If you’d like to learn more, have a look at What Makes ArcherPoint?.