Holacracy: The Revolutionary Management System That Abolishes Hierarchy

Holacracy may sound like a recipe for chaos but don't worry, Robertson isn't suggesting we dispense with organizational structure, rules or channels of communication. Instead, he's suggesting a radical way of running your organization using a nest of circles instead of top-down hierarchy.

Visualize a typical hierarchy pyramid for a moment, with responsibility concentrated at the narrow top of the triangle. The leader has a lot of decisions to make and problems to solve, while at the same time keeping abreast of what's happening in the wider business world and creating new opportunities. Is it any wonder leaders can end up feeling overwhelmed and frustrated?

But aren't solutions, decisions and responsibilities part of a leader's role? Yes, under autocracy. But not with Holacracy.

This book will appeal to any leaders whose organizations need to adapt, evolve and create. It will particularly benefit those who want to unleash their own creativity by distributing power and responsibility. This type of leader will delight in seeing their people contribute and grow.

So keep listening to find out about a management system that uses connecting circles instead of a pyramid. Learn how all workers can have a slice of the leadership action and why getting rid of ‘what-by-when' deadlines is key to efficient working.

Robertson was motivated to design Holacracy by his own frustrations with autocratic management systems – first as an employee and then as a CEO. As leader of his own software company, he found, to his horror, that he was running his business more or less autocratically. He experienced firsthand the stress of not having enough hours in the day to make all the decisions and perform the multitude of tasks required of him.

And, more to the point, he didn't have time to think, create and evolve the company – the very reason he'd formed it in the first place. He felt there had to be a better way. He set about experimenting with management styles to devise a system that would give him more time to be creative and would give his workforce the opportunity to contribute their experience and knowledge.

Through years of trial and error, he developed Holacracy and, in 2007, he co-founded HolacracyOne, a consultancy that helps companies around the world set up and practice Holacracy. This book outlines the principles and practicalities of putting this idea into action.

It's divided into three logical sections. In Part One, Robertson introduces the concept of Holacracy. In Part Two, he explains how to adopt it, and Part Three tells you how to live and grow with it once it's embedded.

While the concept of Holacracy is revolutionary, the style of the book is familiar and user-friendly. It uses visuals to show us what, for instance, a shared information space might look like. For easy reference, the book adopts magazine-style textboxes, sub-headings and bold typeface for key points.

We love that the book includes a detailed index where you'll find everything from "vacation policies" to "failure scenarios." It's easy to see why Tony Hsieh, author of the number one New York Times bestseller "Delivering Happiness," calls it his "Holacracy Bible." Its layout is ideal for busy people who want to find a specific topic in a hurry.

So, let's find out a bit more about what Holacracy is.

An organization using Holacracy as its management system is made up of autonomous, self-organizing circles. Each of these circles has a purpose and role, and they're all contained in a bigger circle that represents the whole organization. Within the organization's circle, you may have a "super circle" such as the marketing circle and within that, the "sub-circle" of social media.

Each sub-circle holds monthly meetings to refine its structure and procedures and weekly tactical meetings for tasks and goals. In an autocratic system, the manager makes the decisions but, in Holacracy, each circle makes its own decisions. There is no leader.

Of course, each circle doesn't act completely independently. You have to take into account how your circle's decisions might affect other areas of the company. It works like the human body. Our vital organs operate independently but also as part of the larger whole. If we go for a jog, our legs and arms move to propel us forward and our heart and lungs work harder to make the effort. In the human body, this communication between brain and function is automatic.

In Holacracy, communication is achieved through "links" – designated members of each sub-circle who give and receive feedback. Their job is to represent their circle and manage its boundaries, sidetracking issues that are outside the scope of their circle. As you can imagine, this means that the roles and responsibilities of each circle need to be clear, explicit and accessible to everyone.

It's really important to grasp that a circle is a group of roles, not people. This means that people can be members of several circles. Workers are not confined to one specific role but have the freedom to participate in several functions of the organization, depending on their skills and preferences.

It sounds complicated, but it works if people self-manage and keep track of their own roles and tasks.

And that brings us back to the key concept of the book – that in Holacracy everyone in the organization has real power. They use their unique set of experiences and expertise to drive the company forward, and they take on responsibility.

This has obvious benefits of ownership and empowerment for employees, but it won't suit everyone. Some people won't want the responsibility and accountability that self-management entails. It'll take some getting used to and it may seem scary at first. Employees need to be encouraged to ask, "If this was my company, what would I do?" We also wonder whether taking on this responsibility should be rewarded and how this could be done.

So, how do you get people to self-manage? According to Robertson, by replacing top-down management with a set of rules he calls "governance." With Holacracy, everyone learns the rules and adheres to them. These might seem cumbersome at first, but they soon become second nature, rather like the rules of driving. In order to drive, we have to learn a whole set of road signs, markings and regulations. These become embedded to the point that we don't even think about them. Although Holacracy rules might seem restricting, they do away with the need for a manager, so that workers have more autonomy.

In Part Two of the book, Robertson explains how to implement the rules through a series of realistic scenarios in which readers participate. We found this both enlightening and stimulating.

To give you an idea, meeting agendas are not determined before everyone convenes. All attendees turn up with their agenda items and there are no exclusions or prioritizing. Everyone gets a say.

This has the potential to descend into a bun fight, except that Robertson has devised a clear and fair set of rules that allows the proposer to present an idea to the meeting uninterrupted. Other participants can then ask clarification questions, react, object, and finally the group reaches a conclusion. It's all very civilized and proceedings are supervised by a facilitator, not a chair.

Some might find this system restricting and slow, but others will love it, because it gives everyone the opportunity to contribute.

In this way, Part Two shows us in practical close-up how to run Holacracy – from the specific duties of circle members, through tips for the facilitator on how to run a meeting, to why "what-by-when" deadlines don't work.

Yes. You did hear correctly: the author argues against deadlines that specify "what" needs to be done "by when." Imagine you're in a meeting and you've just agreed to a task. The next question is, "And when will you do it by?" You give a date that's duly recorded and you're committed.

But then real life throws you a crisis, scuppering your best-laid plans. This crisis needs urgent attention but you know you won't be able to complete your initial commitment as well. According to Robertson, all these "by-whens" only give us an illusion of control because, as we all know, stuff happens. He argues that with "what-by-whens" we can end up chasing commitments, rather than consciously selecting and working on the most important tasks.

Not only that, chasing "by-whens" results in stress. We try to conjure more hours in the day. We steal some of our precious down time and beat ourselves up with what we could or should be doing. The reality is, we have a limited amount of time and we may need to drop one commitment in order to work on a more important task.

All we need is confidence in our ability to prioritize. We need to trust that we are working on the most important task in any given moment and that we won't lose track of our responsibilities.

Wow! This is self-management in the raw. This is Holacracy.

As you can see, Holacracy isn't about the leader changing his or her way of operating – it's a corporate culture, a whole new power structure. It involves everyone in the company sharing power, taking on board a set of rules, responsibilities and ways of operating. It's a business lifestyle that will take some time and effort to implement, and Part Three of the book explains how Holacracy works in practice, drawing on the experience of those who are living it.

If you like the idea of running Holacracy in your company, you might be tempted to try it out piecemeal. For instance, you might consider only adopting Robertson's meeting formula. But he doesn't recommend you do this, arguing instead for an "all or nothing" approach. Adopt the whole package from the get-go and don't expect perfection immediately. Improvement will come with practice.

To get you started, Part Three includes the "Five Steps to Bootstrap Holacracy" into your organization. The first step is adopting the Holacracy constitution. This defines the rules that everyone in the company must follow and it's therefore an activity of the biggest circle – the whole company.

But what if you're middle management and you'd like to explore using some of Robertson's ideas, but you know your bosses won't go for Holacracy? Robertson's been there and empathizes.

So, Chapter Nine, titled, "If You're Not Ready to Adopt: Moving Towards Holacracy," gives some ideas on how your organization can do this by taking actions such as changing your language and streamlining your meetings. You could see this as a contradiction to his assertion that taking on board Holacracy wholesale is best. Or, you could simply appreciate that he's being realistic.

So what's our last word on "Holacracy – The Revolutionary Management System That Abolishes Hierarchy?"

Brian Robertson delivers what he promises here – a system of management that turns the idea of hierarchical leadership upside down and gives power to everyone in the workforce.

He gives us the theory and follows it with clear, practical instructions on how to run Holacracy in your workplace. Globally, hundreds of small, medium and large organizations have turned to Holacracy. As just one example, the co-founder of Twitter, Evan Williams, has adopted Holacracy primarily due to its sharing of power. He says that letting go of the power reins frees him to be creative.

While the fundamental concept of Holacracy is giving power to the people, the irony is that it can only be fully implemented through the will and motivation of everyone, including management. And let's reflect for a moment on its effect on managers.

As Evan Williams discovered, Holacracy is liberating on the one hand. But, it also requires leaders to find a new sense of their own value and contribution. For some, relinquishing the heroic leader role could be scary.

This is addressed in Chapter Ten, titled, "The Experience of Holacracy," which offers some reassurance and practical advice by sharing the experiences of leaders in their transition from hierarchical management to Holacracy.

Without designated leaders, Holacracy may seem like fertile ground for power struggles among staff. The key to preventing such battles is for each person to have clearly defined roles and responsibilities. Robertson deals with this issue in some depth, emphasizing the need for detailed job descriptions that reflect what each employee is supposed to do. This avoids the scenario where conscientious workers may be overloaded with work while the less conscientious have an easy ride.

If you decide to try Holacracy, remember it was born of trial and error. Practice, practice, practice is the key to success. It may not suit every company, or every manager, but if you think you'd like to give it a go, you'll find everything you need to get started in this book.

"Holacracy – The Revolutionary Management System That Abolishes Hierarchy" by Brian J. Robertson is published in paperback by Penguin Books.

That's the end of this episode of Book Insights. Thanks for listening.