Holacracy summary

As we’ve just learned, top-down hierarchical structures aren’t effective in today’s dynamic marketplace. But what’s the alternative?

Imagine a management model that completely reverses the predict-and-control ethos – a wholly democratic approach that gives every employee an equal say in company strategy.

Let’s say you’re ready to implement Holacracy within your organization. Where do you start? Well, first your founders, board or executive team must identify the company’s purpose – its reason for existing. This purpose should shape everything your company does.

For instance, e-learning company Blinkist defined its purpose as such: “to transform all knowledge into something usable.” And as we’ll see later on, Blinkist’s purpose reverberates throughout the entire organization.

As we’ve learned, a Holacratic company is structured around circles and roles. Now it’s time to explore each of these units in a bit more detail, beginning with roles.

For starters, consider the notion of job descriptions, the traditional alternative to roles. Although most companies rely on them, job descriptions tend to be vague and unclear, not to mention the fact that people hardly ever read them, thus making them ineffective.

Now that we understand how roles function within a Holacratic organization, let’s move on to circles.

Roles are organized within a series of circles, going from smaller to progressively bigger. So, each role (for example, social marketing) is part of a circle (the marketing circle), which may be part of another, broader circle (say, the growth circle). This is then part of the widest possible circle, one that involves the whole company: the anchor circle.

Holacratically structured companies swear by their management model, claiming that it keeps their organizations flexible and agile. This is in large part thanks to a very strictly defined meeting form called the governance meeting.

Roughly every month, each circle holds a governance meeting, which is when roles within the circle are tweaked, removed or created.

In the contemporary workplace, meetings tend to drag on needlessly, with simple decisions often taking hours as the discussion moves back and forth. With Holacracy, this doesn’t happen because Holacratic organisations follow the Integrative Decision-Making Process.

To understand how this happens, imagine that the person filling the online marketing role feels overwhelmed by too many content marketing accountabilities; in other words, she has identified a tension.

In the previous blinks, we saw how circles are used to define roles and responsibilities during governance meetings. But there’s one more aspect of Holacratic management we haven’t covered.

In order to maximize operational productivity, circles are also responsible for creating projects divided into next actions.

Having an effective strategy requires you to look toward the future. But in an ever-changing world with highly dynamic markets, the future is wildly unpredictable.

Conventional organizations do not take this into account. For them, strategy is all about setting rigid goals and defining the right paths to reach those goals. This isn’t a particularly effective approach; after all, rigid goals limit your flexibility and restrict you to one path. And since no one can possibly know the future, your path might be headed in the wrong direction.