No more job titles, no more managers, no more hierarchical pyramid. Instead, holacracy, a new management trend, offers a transparent structure in the form of grouped circles each with different functions.
First, the term ‘holacracy’ comes from the word ‘holon’, a word used to describe a subset or link capable of self-regulation within a dynamic system.
Inside a business, holacracy functions as an open hierarchy. Agile and lean, holacracy seeks to further engage employees in the management of their own tasks. Without superiors to dictate what to do, everyone is responsible for achieving their own objectives, comply with planning and, ultimately, to do the work for which they possess the best skills for.
Circles of skills
The traditional model of business organization is as follow: A boss makes decisions at the top of the hierarchical pyramid. He them informs the highest ranking managers, who themselves convey instructions to the lower levels of the pyramid. Workers are finally the last to know.
Holacracy decentralizes authority in order for decision-making to be made right on the field. Circles of skills are organized by employees who are similarly interested and qualified. The circles can overlap, with each employee being able to belong to different circles.
Titles disappear. One no longer refers to “Mr. John Doe, Director of Sales,” but rather define their own role. Finding new customers, ensuring the company’s visibility, keeping good relations with business partners, etc.
In doing so, decision-making is faster and more transparent. Instead of meeting one’s boss to offer new ideas, the employee in a circle meets with partners who accept or reject those ideas. The group follows an integrated decision-making process.
Each circle also contains a mentor who administers tasks. Yes, employees become responsible for the way they carry out their tasks, but it is the mentor who assigns homework.
However, holacracy does not go unevaluated. Employees must prove to their mentors that they are the best skilled for the tasks they want to be assigned to. Holacracy is based on results and personal branding, which should ensure the smooth running of the business. Mentors diagnose daily performance and ease of the employees’ administering and performing their individual tasks.
Holacracy, advantageous?
Are hippy businesses and desperate startups the only ones attempting holacracy? Apparently not. Zappos is probably the best example. In 2013, the US online retail giant embarked on the adventure with 1500 employees, and seems to be holding on strong.
A distinct advantage, holacracy encourages the involvement of employees who feel responsible and autonomous with the tasks assigned to them. It provides transparency (each employee knows what others are working on). It also creates an environment that is attractive to future employees, and encourages talented employees to develop their skills. Ultimately, the morale of the company has improved tenfolds.
From an economic point of view, the technique is known to help a company adapt to constant market changes.
A change to holacracy, however, can be very long. Four to six months to get used to the new concept, both for employers who lose some of their power as well as for employees who like to have an authority figure they can trust. Although all companies can try it, startups will find it easier to implement holacracy as they still have no long standing habits.