Holocracy is an organisational system in which decision-making is distributed horizontally rather than established by a traditional hierarchy. Circle structures, the definition of roles, flexibility and autonomy are the typical key characteristics in a holocratic company.
Working without bosses or hierarchies is now becoming a reality for some workers since Brian Robertson, the founder of Ternary Software coined the term in 2007. Holocracy is an organisational system where decision-making is distributed horizontally instead of being established by a traditional hierarchy.
This could sound like a dream come true for some people, while others might see it as a lack of organisation. However, we’re seeing an increase in the number of companies switching over to this new style of corporate management. One example is Zappos, the American (footwear) company that announced its plan to do away with all the management positions and hand over decision-making powers to its 1500 workers after trialling holocracy with a small group of employees in 2013. But they’re not the only ones, Netflix and the UK chain John Lewis are also implementing holocracy. But what do these companies have in common?
IMF Business School analysed the key characteristics found in a holocratic organisation:
Circle structure. The company is organised in circles or teams, the complete opposite of the hierarchical pyramid structure. Each team has specific objectives and coordinate themselves internally to achieve them.
Definition of roles. There are no descriptions of the different positions in this type of company. Each worker assumes a specific role with clearly defined responsibilities, which can vary depending on the team they are working with. Each worker’s qualities must be analysed to find the role that suits their abilities best.
Flexibility. Even though it’s a dynamic organisational structure, this doesn’t mean that everybody does everything. In fact, the idea is that each person can work on several projects in different roles.
Autonomy. Holocracy hands the power back to the workers and teams to resolve problems autonomously. This favours efficient problem-solving in the shortest time possible.
For Carlos Martínez, President of the IMF Business School “this type of organisation is easier to visualise in a start-up than in big companies and corporations where changes tend to take longer to implement. For that reason, it’s necessary to transform the structure of these companies into small start-ups that function as small and very limited groups where collective intelligence is used in favour of both business and personal interests.”