HOLACRACY

Origin of holacracy

Holacracy – or in German “Holokratie” – is a relatively new concept of organisation, which goes back in its original approaches to the Austrian-Hungarian writer Arthur Koestler, who shaped the Holon concept with his book “Das Gespenst in der Maschine” (1968). He constructed the term from the Greek word hólos = whole and the suffix on, which should point to the partial or particle character.

In his definition, he describes the holon as a component in a hierarchy, which – depending on the point of view – behaves as a whole or as parts. A very good example of a holon is the human cell, which in itself can be seen as a whole and at the same time represents only a part of the superordinate structure.

American entrepreneur Brian J. Robertson uses the Holon concept as the basis for his organizational concept of “holocracy”. This includes the practice of regulating and managing organisations, which is characterised by decision-making based on transparency and participatory opportunities for participation at all levels.

Holocracy helps organisations prosper more easily in a world that is becoming increasingly volatile and dynamic (keyword: VUCA). The claim of holocracy is that every person in the company becomes a manager, which supports commitment and flexibility. Clear structures, roles and decision-making processes create a well-organized system instead of chaos.

How does holacracy work?

Holocratically organised companies define dynamic roles based on work and not on people. Employees can therefore take on different roles in different teams, which are dynamically adapted to their daily work requirements. Decisions are made locally, since authority is highly decentralised and teams can therefore work independently and autonomously.

Nevertheless, the individual persons and teams do not act completely independently of each other, but are networked with each other through connections (“lead link”, “rep link”, “cross links”). As a result, employees and teams work more autonomously and managers focus on strategy and planning instead of operational micromanagement.

Often the concept of holocracy is described and accepted as non-hierarchical, managers are abolished. However, the holocratic enterprise is based on ever-growing circles, with inner circles being subordinate to outer circles. Roles therefore exist that are quite hierarchical.

This organisational structure is adapted to current challenges in regular team meetings (“governance meetings”). The system is supported by clear and transparent rules that are visible and valid for everyone in the so-called Holocracy Constitution.


Holocratic organisational design (own presentation based on Robertson 2016)

Challenges in the introduction of holocracy


When introducing a holocratic “operating system”, as with all change processes, employees should not be ignored.

Holocracy provides for a strict separation between role and person. This is theoretically possible and also brings advantages. As a result, people “stick” less to their roles because they tend to take on different roles and thus become more flexible.

However, it is still people who act, not machines. Values, emotions, experiences are not cancelled out by the “digital” separation between man and role. Perhaps it is no coincidence that the founder Robertson is first and foremost a developer and thus thinks and acts more “digitally”.

The model of holocratic structures also ignores the business context and there is the danger that the essential focus on the customer in a VUCA context is ignored too little.

Holocracy offers solutions to increase internal democracy and efficiency at the same time, but does not integrate the interaction between the environment and the company, which could result in a holocratically structured company being blind to operations and lacking market and customer understanding as well as a weak service culture.

Examples of holocratic companies in practice


The Holocracy concept has already been used by over 300 organizations in the USA. The best-known and largest of these is Zappos, an online shoe and fashion mail order company with around 1500 employees, which served as a model for the German Zalando of the Samwer brothers. Especially for Zappos, an organization that was already agile and customer-oriented before the Holacracy introduction, holocratic structures seem to bring added value through reduced administrative activities and less bureaucracy. Therefore, a holocratic organizational structure can make sense in order to become more dynamic and promote self-management.

Other companies in which holocracy has been introduced:

German-speaking area:

  • Blinkist, a start-up specializing in the compilation of non-fiction texts
  • Netcentric, Swiss Software Developer
  • Soulbottles, a Berlin eco-start-up oriented towards holocracy and non-violent communication
  • Deutsche Bahn, which is experimenting with holocracy in selected areas
  • ESBZ, a reform school in Berlin, which renounces the school management

International:

  • AdScale Laboratories
  • bol.com, in some teams
  • Paramount Software Solutions
  • Durabilis
  • MySign
  • Swisscom, in parts of the company

Conclusion

An unconditional recommendation for all entrepreneurs who feel the desire for new ways as well as for executives and organizational developers who are generally interested in modern business concepts.

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