Holacracy is an unconventional organizational structure that
replaces top-down corporations' traditional management hierarchy with a fluid
governance process. Discover the various aspects of holacracy and how they can
benefit you and your team.
Definition of Holacracy
Holacracy is a type of autonomous company organization in
which all team members share leadership responsibilities and decision-making.
Brian Robertson, a software development entrepreneur, developed the holarchy
template, creating a management circle structure for both nonprofit and
for-profit organizations.
This type of decentralized management differs from
traditional corporate management structures, which concentrate power within a
hierarchical structure. Individual team members have more agency in a
holacratic organization because they work on projects that advance the
organization's mission.
3 Elements of Holacracy
The foundation of holacracy is made up of three major
components:
1. Circular teams: Holacracy employs a circular
structure to organize teams. Each circle has a set of rules, a list of
objectives, and a method for achieving those objectives. While different
circles differ and operate independently, two roles, the lead link and the rep
link, connect all of them. These team members attend governance meetings with
other circle members to collaborate and ensure everyone is working toward the
organization's goal.
2. Dispersed authority: A dispersed management system
is a key feature of holacracy work. Instead of forming a traditional,
high-level leadership group, holacracy empowers and empowers every team member
to contribute to decision-making. This fluid management style and integrative
decision-making process instills a sense of purpose in employees and promotes
teamwork throughout the organization.
3. Role fluidity: Employees in a holacracy do not have
assigned positions or job titles. Team members can work independently on
projects that interest them and contribute to the organization's vision. This
level of role fluidity and self-organization allows team members to move freely
between roles and apply their skills to multiple departments at the same time.
Pros of Holacracy
The following are some of the advantages of holacracy
methodologies:
1. Promotes creativity. Because team members are not
constrained by specific job descriptions, they are free to experiment with new
creative outlets and projects. This level of adaptability fosters original
ideas and innovation.
2. Increases employee engagement. Removing management
hierarchies and involving all team members in decision-making fosters a greater
sense of employee engagement. Team members are more likely to feel committed to
the organization's growth and development when they have the opportunity to
discuss aspects of the organization.
3. Supports transparency. Transparency is another
advantage of the integrative decision-making process. It is easier to set clear
expectations when there are no higher levels of management. To share
operational updates, performance metrics, and organizational values, holacratic
organizations do not need to go through the red tape that top-down corporations
do.
Cons of Holacracy
While holacracy practices have advantages, they are not
appropriate for all businesses. Before implementing holacracy in your
organization, consider the following disadvantages:
1. Absence of accountability. Holding team members
accountable in a holacratic organization can be difficult due to the absence of
higher management. Employee mobility within roles complicates measuring
performance and accountability.
2. Meetings can be time-consuming. Tactical meetings are an
important part of the organizational structure of a holacracy. Each circle has
its own set of routine meetings where team members can share new ideas and
project timelines. Because employees work in multiple circles at the same time,
the number of meetings adds up and distracts team members from more important
initiatives.
3. Relies mainly on self-management. In a holacratic
environment, self-government has both advantages and disadvantages. While
self-management allows team members to be more creative, it can be overwhelming
and inhibiting for employees who are used to receiving guidance and
instructions from senior management.
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