Holacracy – A New Operating System for Organisations – Who they are, what do they do, and why they are interesting

I have been following the guys at Holacracy for quite a while now and I’ve been meaning to jot down some thoughts in a blog for some time. In my lectures in complexity I talk a lot about complex systems in nature, for example the ways in which animals swarm, behave  intelligently, solve intricate problems and can make life-and-death decisions accurately and repeatedly. I then look at various business case studies such as Kyocera’s Amoeba Management System and Gore Inc’s lattice management structure, noting how they too appear to be based on nature’s principles.

Agoralab

One of the major challenges though is moving from an out-of-date mechanistic top-down hierarchy to a more natural business structure. The results can often be even more complexity:

Today`s big companies do very little to enhance the productivity of their professionals. Verticallly oriented organizational structures, retrofitted with ad hoc and matrix overlays, nearly always make professionals work more complex and inefficient – relics of the industrial age.

Lowell Bryan and Claudia Joyce The 21st-Century Organization McKinsey Quarterly, Issue 3, 2005

Transforming an organisation at a very fundamental level is therefore no simple task. It is for this reason I have been studying Holacracy’s philosophy and solutions. Brian Robertson, the founder, notes that organisations have the following issues, as seen in this slide below.

Slide credit: Brian Robertson, Holacracy

Slide credit: Brian Robertson, Holacracy

Robertson asks the question that perhaps organisations are designed to achieve these results? Perhaps they are features or side effects of the system, as a result of how we organise? So we need to look at how power and organisation and communication works.

Slide credit: Brian Robertson, Holacracy

Slide credit: Brian Robertson, Holacracy

Holarcracy is a social technology allowing an organisation to upgrade its operating system. In Robertson’s words, it is an “upgrade which changes how power works and decisions get made.” One of the central developments Holacracy have created is their written constitution which documents the core rules, structure, and process of the Holacracy operating system. This has recently been re-published in plain English, and can be downloaded from the Holacracy website.

I recently took part in a Holacracy seminar, and it really was interesting. One thing becomes clear which is the whole Holacracy system is more than just a number of physical documents. I would recommend that you watch the introductory presentation above to get a much more detailed picture of what it is and how it could be implemented.

One of the key proponents of Holacracy is Evan Williams, one of the founders of Twitter, and who has also founded the Obvious Corporation which recently launched Medium (of which I have just started contributing to). The clear focus from Williams was to create a mindful organisation, and he saw Holacracy as a key foundation for his vision.

“Holacracy is the opposite of the cliché way to run a startup. People think “freedom, no job description, everybody does everything, it’s totally flat, and that’s cool because we’re all down with those rules”. But actually that creates tons of anxiety and inefficiency, and various modes of dysfunction, whether we have to build consensus around every decision, or I’m gonna do a land grab for power… People romanticize startup cultures, but I know it’s fairly rare that people in startups say “this is it, it is amazing and everybody is super-productive and going along”. So in Holacracy, one of the principles is to make the implicit explicit — tons of it is about creating clarity: who is in charge of what, who is taking what kind of decision — and there is also a system for defining that, so it’s very flexible at the same time.”

Evan Williams on Building a Mindful Company

Much of the work I am doing here in Brazil is to help organisations overcome complex problems. Brazil has huge problems, of course it does, but then so do pretty much all countries right now. I think for a certain type of organisation with the right mindset and a deep seated desire to evolve, Holacracy offers a very credible potential solution, an upgrade to a more natural organisation, one which is authentically whole. I have not implemented Holacracy myself of course, so I can not speak from experience. But a number of organisations with visionary leaders are beginning to implement the constitution and structure, and for this reason it is certainly worthy of study and investigation.

Related Articles and Links

Holacracy

Book Review: Smart Swarm – Using Animal Behaviour to Change our World

The Lifecycle of our Electronic Gadgets, the True Cost to Earth, and How We Move to Business Inspired by Nature

A tale of two airlines: Brazil’s Gol and Azul

Why people in HR need to become masters of complexity and chaos

7 thoughts on “Holacracy – A New Operating System for Organisations – Who they are, what do they do, and why they are interesting

  1. One of the things that Taking Appearance Seriously helped me to understand is how pervasive the notion of the ‘universal machine’ is in modern societies. Henri uses the example of the computer as a (physical) version of the universal machine, and it was a huge lightbulb moment to realise that this is what a computer is (it can be a typewriter, a calculator, a radio, a darkroom, a map, a telephone – all of these things, and many more, because they have all been mapped onto its totally abstract computational engine).

    But the computer is not the only version of the universal machine. Another attempt to realize the universal machine is the organization. Like the computer it is so effective because the processes of management have been reduced to a set of quite abstract systems: the ‘algorithms’ of the organization are its business processes. Organizations are also capable of being many different things: they can be a bank, a hospital, a military unit, a charitable enterprise, a supermarket, a government department. Because the organization is an instance of the universal machine it is not necessary for the managerial cadre who run it to have any ‘sector knowledge’ – indeed, it is preferable (certainly in the higher echelons) that they don’t. This mirrors what happens in computer programming: the programmer doesn’t need to understand picture editing, medicine, finance, dating or any other application. As long as these things can be analysed in terms of computer science, the particularity of each application is a useless irrelevance. (It is this same logic that means that a banker might be chosen to run a retail chain, someone who built up a logistics chain appointed to the board of a pharmaceutical company, or someone else who spent their career working for an oil company made a government minister – or even an archbishop! ;-)

    What does this have to do with the post? Well, the metaphor of an ‘operating system’ is fundamentally related to the universal machine. And it also helps us to see what has been happening over the last couple of decades in management thinking. Contemporary operating systems – iOS 6, Mac OSX, Android, Windows 7 – are funky. They use all sorts of ergonomic and skeuomorphic techniques to dress up the device so it feels approachable, humane, user-friendly. But, despite this ‘look and feel’, the underlying logic of the device is what Heidegger (in the extraordinarily prescient essay The Question Concerning Technology) calls Gestell, ‘enframing’. Everything is reduced to ‘standing reserve’ – what we might now describe as ‘inputs’ and ‘outputs’ – which can be processed by an entirely abstract set of operations (a process that Stephen Toulmin brilliantly put into a historical perspective in Cosmopolis and Iain McGilchrist equally brilliantly equates with the left cerebral hemisphere in The Master and His Emissary).

    What we’ve learnt to do in the last few decades is to dress up the brutal, uncompromising nature of ‘enframing’ with organic-looking user interfaces. In organizational life, we can point to the work of people like Arie de Geus (The Living Company), Peter Senge (The Learning Organization), Otto Scharmer (Theory U) etc. which aim to do exactly this: to create a funky contemporary operating system, drawing on organic models and holistic thinking, for the organizations. Unfortunately, however – to push the computing analogy a bit further – all of these operating systems still run on top of MS-DOS. They are examples of what Henri called ‘counterfeit wholes’ – the equivalents, in management thinking, of systems theory in the life sciences (and, of course, the concept of the ‘system’ can be seen as yet another example of the universal machine – dovetailing closely with both the computer and the organization).

    So what is the alternative? What would the Goethean enterprise be? This is a big question that I’m not going to try to answer here. But just as Goethean science is built on a fundamentally different basis to mathematical science, it would have to put qualities at the heart of the organization. One way, perhaps, we could put it is that we would have to see the organization not as something which takes something (anything) and turns it into something else, but as a situation in which ‘the self-manifestation of an evolving intent comes to appearance’. What that means involves a huge shift of thinking about what organizations are (indeed, what work is and what it is for), what role they have in individual and communal life, and about the values that inform them. But since Henri has let the cat out of the bag, it’s going to happen sooner or later… ;-)

    • Hi James – I would actually love to publish an article by you on what a Goethean organisation would be like. You are moving in conceptual circles that very few people have the ability to enter, and so you really have your work cut out taking people from their current thinking to where you think their thinking should go.

      One of things I really respect about Holacracy is that while it may well use the analogy of an “operating system” – this I feel allows them to start the conversation with those in business strategy and change management. You have to begin somewhere that is accessible for people. In using the analogy of an operating system, what I hear is a shorthand way of these guys saying they want to fundamentally change an organisation, and this too is what you wish to achieve.

      I think also they have a very strong business model, using open standards and developing the various materials. This I think is a major achievement, and shows just how much thought and effort has gone into their work.

      But as I said, you are always welcome to develop your thoughts and publish here, as we certainly need as much thinking in this area as possible.

    • “So what is the alternative? What would the Goethean enterprise be? This is a big question that I’m not going to try to answer here.”

      It’s a shame, I would have liked to know how a Goethean computer works.

      • For me I think an interesting starting point is to consider both information and meaning. We can contemplate a plant and ask ourselves what is the difference in organisation of the parts between a plant and a computer. And then maybe extend our contemplations to many other organic systems?

  2. Pingback: Leadership in Transformation in Complex Ambients | Transition Consciousness

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