Holacracy – an insightful approach to leadership or an interesting experiment?

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A Hola what? I hear you say. In Saturday’s Australian Financial Review (September 5th) the Perspective Section Page 19, carried a full page article Power to the People which outlines a new approach to leading organisations in which authority and decision-making are distributed throughout self-organising teams or circles rather than being vested in a management hierarchy. It removes accountability from a management hierarchy and distributes it across clear roles, which can be executed autonomously by various teams.

Forbes Magazine has cited in several articles that the move to Holacracy by on-line shoe store giant Zappos was a strong contributor to their growth and success. A number of companies in Australia have followed suit and adopted the Holacracy approach of fluid structure, evolving roles, a hands-off rather than hands-on executive approach, and strong customer centricity. Congratulations to these organisations for their courage and willingness to embrace a new business model which clearly has merit as proved by Zappos and others.

Why did this article capture my attention? Two reasons:

First, on reflection after reading the article I was struck by the similarities of this holacratic approach to distributed leadership and shared leadership models that emerged in the early 2000’s from sociological, cognitive, psychological and anthropological theories, and the even earlier self-directed work teams approach that emerged in the late 1980’s/early 1990’s.

For a Holacracy to be effective there needs to be a number of factors present:

  • Teams at every level of the organisation are aligned behind a clear and compelling vision. Lip service will not suffice, it must be the root system to which the organisation is firmly anchored and from which the organisation grows;
  • There is a core set of Values that guide behaviour in all situations;
  • There is minimal hierarchy where a lean executive team leave as many decisions as possible with the teams;
  • Teams need to be able to form and reform quickly as projects and customer needs and preferences change;
  • Concepts, ideas, and approaches, are championed at every level and not the sole province of one team;
  • There is a governance structure. The Holacracy Constitution is freely available, just search these words in your favourite search engine.

The above points while expressed differently can be found in the distributed leadership/shared leadership and self-directed work teams approaches. These approaches also outline the disadvantages which are yet to fully surface with the Holacratic approach:

  • Hard to execute;
  • Challenging to scale. More suited to smaller, agile organisations;
  • Requires careful preparation and commitment and dedication at every organisational level (without exception);
  • Structural changes alter relationships and decisions at every level;
  • Leader’s style and approach, irrespective of organisational level, still strongly impacts results.

The second reason this Holacratic approach captured my interest is that for the last six weeks I have watched the Bear Gryll’s series The Island on SBS. Fourteen women and fourteen men were placed on two separate tropical islands to survive for 6 weeks. Of particular interest was that from day one, the women chose a ‘collaborative’ approach which in so many ways aligned with the holacratic principles. Using this approach their survival was challenged for four of the six weeks. It was not until two of the group moved to courageously exert actual leadership of the group and establish a hierarchy in order to plan, organise, establish roles, and agree priorities and sequencing of tasks did this group move from survival to thriving.

The conclusion I drew thinking about the AFR article and the Gryll’s series is that without structure – some form of hierarchy – then there has to be some form of clear structuring that guides direction, focus, and action, an absence of which will surely result in some form of anarchy.

It will be interesting to see what happens with adoption of the holacratic approach currently in use by Zappos and others. I believe it’s too early to predict whether it will be successful as an approach, however, I am going to continue to watch what emerges through its application.

I am interested in your comments about the Holacratic approach, its value and relevance for today’s organisation, in particular I am interested in you sharing organisations where you observe the Holacratic approach is already being used.

Vivente Australia enables leaders and managers to create the conditions that allow their people to do their best work every day thus creating a powerful advantage: the synergy between people, leadership, management, and culture, produces performance that allows your business to achieve its outcomes.