I recently attended a webinar by Brian Robertson CEO of HolacracyOne. I am really interested in their approach to organization design as lots of news has recently been circulating about Zappos and other organizations adopting this approach.
I’m really happy to see that their business is working and they have already some implementations successfully running. The world will be a better place if organizations implement ideas like Holacracy and I wish Brian a lot of success. However, it doesn’t seem to me something new and I there are several things I don’t understand.
As Jack the Ripper would say, let’s go by parts.
The concept and principles behind Holacracy are not new to me, we can find them already in well established and successful businesses like W.L. Gore, Morning Star, Handelsbanken or Statoil. These companies have been outperforming in their markets for years with similar approaches to Holacracy.
I would emphasize 6 concepts behind Holacracy model:
- Agility – Defined as the ability to quickly and effectively respond to market
- Clarity/Transparency – Everybody knows what is going on at all levels
- Purpose, principles, rules and boundaries instead of Management – Elimination of management and implementation of self-regulation mechanisms
- Teams – Circles of roles
- Peer Pressure instead of hierarchical control – No one tells you what to do, but there are expectations on your role’s accountabilities
- Roles instead of positions – Elimination of job descriptions and job positions, people perform different roles as part of different circles, defined by accountabilities.
If we look at these concepts people from the Agile and Lean world will say, “Hey, that sounds familiar to me!”, and they’d be right.
Besides, there are people, I personally know, working on similar models and helping organizations transform to adaptive self-regulating high-performing systems: like Niels Pflaeging with his “Organize for Complexity” model or the guys from Beyond Budgeting, not to talk about large Agile and Lean enterprise escalation projects that many coaches and consultants do around the world.
First thing Holacracy consultants ask the CEO of the organization is to delegate her power to the Constitution. As we will see later, this a very powerful intervention in a system. So, in one shot, these guys transform an oligarchy into a “market-driven” democracy. Awesome!
Their intervention in the system follows three main lines afterwards:
- Organizational Structure – organize work, not people
- Governance Process – distribute authority and create organizational clarity
- Operations – tactical meetings to sync-up and triage
They build a system based on circles of roles organized based on self-regulation, rules, boundaries, transparency and distributed authority. Circles can be made of roles or other circles.
Brian says a normal implementation takes 6 months.
It is when I look at this from a change management and systemic perspective that I start to have some concerns.
In her book “Thinking in Systems”, Donella Meadows describes the 12 leverage points to intervene in a system, and Holacracy actually intervenes in some of the most powerful, like information flows, rules and self-organization. However I miss the most powerful one in their model, which is “mental models”, or culture if you want.
I would like to know if this model has ever worked in organizations with a much different culture. I can understand how it will work at Zappos and other modern organizations, but I have my concerns with other types. And, assuming this model could be implemented, it’s difficult to believe that’d take 6 months only.
The underlying problem is that you cannot change culture in an organization unless you change individual behavior of people, and to do that you must change their mental models. If it works, it is the most powerful intervention you can make in a system, but it is also the most complicated and lengthy. John Kotter puts it very clear in his work; one of the reasons for change failure in many organizations is failure to stick into the culture. That’s when victory is declared too early.
If anyone out there can share some information in this regards, that’d be great!
Thanks for reading, sharing and commenting!