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Glossary – Holacracy

Holacracy

Nikiforov Alexander
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What is Holacracy?

Holacracy is a unique self-management system based on principles of mutual trust and equal responsibility among all employees for the end result. This management model features a horizontal structure and shared values among all members of the company. The main focus is on engaging all employees in management processes, which allows for a more dynamic and adaptive organization.

History of Holacracy

The term "holarchy" first appeared in Arthur Koestler's book "The Ghost in the Machine" in 1967. The word derives from the Greek "holon," meaning a whole as part of a larger whole. This concept was put into practice by Brian Robertson, who founded Terminary Software in 2001. Realizing that traditional hierarchical structures limited freedom of action, he restructured the organization according to holacratic principles in 2007. In the same year, he founded HolacracyOne, which focuses on standardizing and implementing holacracy worldwide. Robertson's book "Holacracy Constitution," published in 2009, details this management model and is available for download on the HolacracyOne website.

Main Principles and Concepts of Holacracy

Holacracy abolishes the traditional notions of management while retaining the best management practices. The main principles of holacracy include:

  • No hierarchy of power: Every employee becomes a leader, where responsibility for decision-making is distributed across roles.
  • Structure of circles: Instead of traditional departments, self-managed circles are created based on purpose.
  • Roles and responsibilities: Instead of fixed positions, employees can perform multiple roles, promoting their development.
  • Common rules: All participants in the system operate under shared rules that create transparency and trust.
  • Initiative and responsibility: Every team member can propose changes and improve processes without waiting for instructions.
  • Transparency: Access to information for all employees, which enhances mutual trust.
  • Acceptance: All participants must agree to the rules of holacracy, fostering unity within the team.

Principles of Teal Organizations

Holacracy is related to the concept of teal organizations proposed by business consultant Frederic Laloux in 2014. The main principles of teal organizations include:

  • Evolving purpose: The higher purpose for which the company was created.
  • Wholeness: Recognizing the person as a whole individual, where work and personal life are in harmony.
  • Self-management: The right to make decisions at any level of the organization.

Structure of Holacracy

Holacracy does not imply anarchy; rather, it has a clear structure that organizes interactions between circles. The main components of the structure include:

  • Anchor circle: Founders who define the evolutionary purpose.
  • Organizational circle: Unites all business processes and strives for a common goal.
  • Super-circles: Directions developed by the company, united by goals and tasks.
  • Sub-circles: Narrow specializations within larger directions.

Advantages and Disadvantages of Holacracy

Holacracy, as a more flexible system, has its pros and cons. Advantages include:

  • Flexibility and adaptability.
  • Quick decision-making.
  • Opportunities for employees to try different roles.
  • Increased internal motivation and engagement.

Disadvantages may include:

  • The need for significant company transformation.
  • The inability to build a career in the traditional sense.
  • The risk of incorrect decision-making in a fast-paced work environment.

Holacracy Practices and Company Examples

The ideas of holacracy have attracted the attention of many companies. Among the well-known organizations that implement holacracy are:

  • ZAPPOS — an online store that adopted holacracy in 2014.
  • "Tochka" — a Russian bank using holacracy to increase flexibility.
  • David Allen Company (DAC) — consulting in the field of productivity.
  • Springest — a European learning platform that has used holacracy since 2012.
  • Liip — a Swiss digital agency operating without hierarchy.

Who is Holacracy Suitable For?

Holacracy is not suitable for everyone. Some companies, such as Medium and Las Vegas Downtown Project, have abandoned this model, citing difficulties in coordination and a lack of trust. The success of holacracy depends on the company's readiness for change and the ability of employees to work in a self-managed environment. It is best suited for organizations striving for mutual trust and willing to collaboratively address emerging issues.