System #17: Holacracy

Remember when you first started looking for a job? How your first interview felt? Remember how, if you were anything like me, you were just trying to look the part? Hoping, wishing, the interviewers wouldn't see how unskilled you actually were, and just give you a job. You imagined that they, having jobs, must be so intelligent, so impressive, so...mature. Then you finally got one, and if it was at a good company, you learned a lot. You worked with great people, and you got a chance to get your feet under you.

One thing leads to another and you end up at a different job. Now having a slightly more experienced perspective, you started to notice how, below the surface of the act of work, not much was actually getting done. You got invited to tons of meetings where nothing really got decided. And if it did, there wouldn't be much progress towards those decisions before the next meeting. You'd notice things that were wrong, things that needed fixing, but passing it up the hierarchy ended up being futile. You'd try fixing it yourself, but you'd quickly be reprimanded, telling you to stay in your lane.

You got invited to tons of meetings where nothing really got decided...You started to notice how you didn't need to do much to keep up.

Your colleagues started telling you that you cared too much, and just needed to relax. You started to notice how you didn't need to do much to keep up. You'd show up to meetings, but weren't actually present. As the organization grew, more and more management was added, more and more people who's job it was to organize and shuffle information between the doers...you, and the deciders...them.

The passion you had for your work all but faded away...yet, here you are, 10 years later, doing the same thing, in a company in which you felt no agency, shackled by the idea of losing the pay, the pay you need to afford your mortgage, cars, credit card debts, a baby...life. You convinced yourself this was just how it is to be a grown up, and that you need to stick with it for the people that depend on you. A part of you, however, was screaming at this tyranny of bureaucracy, knowing there had to be something better.

A New Way

You'd start to imagine an organization where every individual’s contribution is seen and valued. A place where decisions aren’t delayed by bureaucracy but are made by those best equipped to make them: the employees themselves. An organization where you’re not stuck in a rigid box of job titles, hierarchies, and departmental silos but one where you could express your full self within many roles across the organization, each with its own defined purpose and autonomy. An organizational structure that would breath and adapt with the people, not against them.

What if I told you there was?

Holacracy, created by Brian Robertson, is a radical alternative to traditional top-down management systems, where authority is distributed across self-organizing teams rather than being concentrated in the hands of a few leaders. The word “Holacracy” comes from the Greek root “holon,” which refers to something that is simultaneously a whole and a part of something larger. Just like a cell, each circle responds to what it senses and contains everything to make the decisions it needs based on its environment. In this system, every team (or “circle”) operates autonomously but is also interconnected within the larger organizational structure. This decentralized model reflects the idea that people closest to a problem are best equipped to solve it, cutting out the red tape and game of telephone that often slows traditional organizations.

The Structure

Circles are these "holons." The first circle, called the anchor circle, represents your organization itself. While at first, you may only have one circle, as your organization grows, more circles are created.

Brian, its creator was inspired by the way that our bodies worked. Circles, due to their fractal nature, can also be thought of as our organs. Each organ has autonomy; our hearts don't need to ask permission to pump blood, or our livers to filter, or skin to sweat. They, based on their purpose, live out those purposes by virtue of simply being.

Within these circles are roles; these roles are energized by people. Contrary to what we're used to, one person can have multiple roles. In Brian's inspiration, roles can be thought of as cells. A role, simply needs 3 things to be defined:

• Purpose - Why does this role exist?
• Domain - What areas or assets does it have exclusive authority over? (optional)
• Accountabilities - What is it responsible for?

Let's look at an example, imagine a standard technology startup. You'd maybe have a role, among others, simply titled "Marketing" who's Purpose could include:

• Generating Awareness
• Engaging Customers
• Driving Leads and Sales
• Positioning the Brand

It's Domain might includes things such as:

• Brand Assets
• Marketing Platforms and Channels
• Marketing Budget
• Content Strategy

And it would be Accountable for:

• Creating and Implementing Marketing Strategies
• Manage Brand Consistency
• Execute Campaigns Across Channels
• Monitor and Report on Metrics
• Manage Content Creation and Publishing
• etc.

As the company grew, however, this role would be expanded, or a new circle would be created. Unlike job descriptions which become obsolete the moment they're penned, roles change with the organization. Their purpose, domain, and/or accountabilities will continue to change based on the tensions that come to the forefront as the organization itself undergoes changes.

Tensions

Tensions are, put simply – a gap between the organization that is, and the organization that could be. A tension isn’t a bad thing—it’s a signal that something isn’t quite right. Rather than seeing it as a problem, tension becomes an opportunity. You’re encouraged to bring these tensions forward, and through the governance process, they get resolved.

Tensions are, put simply – a gap between the organization that is, and the organization that could be.

It’s not about maintaining a status quo, it’s about evolution, constant improvement, and innovation. Every tension becomes fuel for growth, for adapting the organization in real-time to the needs of the people and the purpose it serves. For instance, when you notice something wrong that needs to be fixed, but it isn't in anyone's domain. Or if you can't do your job because you're missing an asset that should have gotten to you because you assumed a role to have an accountability, but it actually didn't. All of these things are felt as obstacles to doing your job. It feels like things are backed up in the pipes instead of flowing smoothly.

The good thing is, unlike many of our current company structures where tensions are felt and vented to our nearest colleague, only to be forgotten...or worse, accepted, ultimately leading to organizational apathy. In Holacracy, everyone is actively encouraged to bring them up, and do something about it. Holacracy couldn't work without it. But where and when do we bring them up?

Governance & Tactical Meetings

Instead of waiting for top-down decisions, Holacracy has two essential meetings that can happen at whatever cadence suits each circle within your company. Governance meetings are used to update the governing of the organization (or the circle), its structures, roles, policies, and domains. These meetings, depending on the speed of change in your organization (or circle) can be held once every few weeks, monthly, or quarterly.

Tactical meetings on the other hand, are focused on operational issues—getting work done, resolving immediate tensions, and ensuring that the circle runs smoothly day-to-day. Because of their operational focus, they need to happen far more often (weekly, or biweekly).

Regardless of your usual cadence, which can, just like everything else in Holacracy, be updated, you may also call meetings any time that tensions have built up enough to necessitate one. You wouldn't want your whole organization sidelined just because of a policy...right? I'm looking at you traditional hierarchies...

One thing I love about these meetings is their pragmatism; they focus on getting things cleared. They do that by having a facilitator (who is elected by each circle) and their job is to keep the meeting on track. Do you always seem to have someone who derails your meetings by speaking the whole time...about nothing? The facilitator would quickly cut them off. Do you do your best to have a meeting agenda, but people get caught up talking about things that aren't actually on the agenda? The facilitator would post-pone that discussion until the appropriate moment in the meeting, or if necessary, to bring it back up in a future meeting.

Holacracy, while touting its lack of bureaucracy, can feel bureacratic...at least when you're in one of these meetings. However, it tries to contain its bureaucratic burdens to those meetings so that the rest of your job can be fluid, clear, and fun. Knowing exactly what to expect from the people you work with, as well as exactly who is in charge of what ends up being liberating. It allows each role to own their own work and make the decisions within the domains they've been granted. And since people can fill multiple roles within your organization, Holacracy can help to break down silos, increase collisions (interactions), and lead to greater innovation and cross-pollination.

An Example

Imagine now, returning to our Marketing role, that our little startup grew. And that role started being too big for one person to energize. The person energizing the role would bring up their tension in their circle's governance meeting (probably the anchor circle) and explain that they just don't have enough time in the day to handle getting billboard & magazine placement, creating and updating Google & Facebook ads, email campaigns, and maintaining the social media presence. They would propose turning the Marketing role into the Marketing circle and create a new role dedicated to maintaining the social media presence. The attendees of the meeting would help clarify the accountabilities and purpose of the new role to go along with their new social media domain. As the company grows even bigger, you could imagine that Social Media role, itself, becoming a sub-circle (as seen in the image above).

Where Do You Begin?

You might be thinking, okay, that all sounds great, but how do we start? Unfortunately, transitioning to Holacracy is not an overnight process. It requires a shift not just in structure but in mindset. You should start by educating your leadership team about what Holacracy is and how it works. Next, you would adopt the Holacracy Constitution, which outlines the rules and processes that will guide your organization.

Start small—maybe just one department. Let them experiment, adjust, and evolve with the system. The rest of the organization will watch as that group thrives, makes decisions faster, and operates more efficiently. When the time comes to scale, Holacracy will already be a part of your culture. The hardest part? Letting go of the control we’ve been taught is essential.

Start small—maybe just one department. Let them experiment, adjust, and evolve with the system.

It’s important to communicate openly with employees about the transition. Holacracy may be met with resistance from people accustomed to traditional hierarchies. People will be accustomed to telling others what to do, and waiting to be told what to do. People will be afraid of their new-found automony. They'll be afraid to rock the boat. Offering training and support during this transition can help employees adapt to their new roles and responsibilities. Because of its transparency, Holacracy creates and nurtures individuals who are able to take ownership of their work and decisions.

Likewise, the first few Governance and Tactical meetings will be difficult, and it helps to have someone who has done it before to help facilitate. If facilitation isn't done properly, it can have repercussive impacts on the trust you're building. However, once tensions have been cleared up and an organizational structure has settled, it becomes far easier to upkeep than with a traditional organization. And with its built in empowerment of each employee, once everyone gets acclimatized, you'll notice a sharp increase in your organization's happiness, productivity, and connectedness.

Why Choose Holacracy?

The benefits of Holacracy are rooted in its ability to unleash innovation and empower employees. First, it eliminates the bottlenecks caused by traditional hierarchies. Decisions can be made faster because the people doing the work have the authority to decide how to do it. This means projects move forward with agility, without the delays that plague traditional systems.

Additionally, Holacracy fosters transparency. Roles and responsibilities are clearly defined, so there’s no confusion about who is responsible for what. This not only boosts accountability but also builds trust within the organization. Lack of trust within an organization is, when inspected, usually the root cause of its waning vitality. It's usually the reason more policies and bureaucracy is added in an attempt to fix the culture through control. However, by distributing authority, Holacracy encourages a culture of ownership and initiative—employees feel more engaged because they are truly responsible for their roles and outcomes. With more employee engagement comes more fulfilled commitments. More fulfilled commitments builds more trust, which in turn, leads full circle to more employee engagement!

Perhaps most importantly, however, Holacracy encourages continuous improvement. Through its governance meetings, it allows for constant evolution and adaptation. Instead of being stuck in a static structure with problems everyone sees but no one can fix, the organization can respond quickly to changes in the market, technology, or customer needs.

Pay

My favorite part of Holacracy is that people aren't defined by their job descriptions. People and the roles they energize are separate, yet through their roles, people can express a fuller expression of who they actually are. Should things need to change, they can. Want to expand your expression? Energize a new role. The problem, however, is how that contrasts with our normal organizational structures of "one person, one job." That one job, has one pay band, and based on experience and skill, employees are paid within that band.

Holacracy, however, doesn't dictate how employees are to be paid and can take on any number of interesting varieties. Maybe each role has a pay attached to it, if someone energizes multiple roles, they would take home multiple pays. Maybe it's a distributed approach where each persons' salary, based on contribution, is discussed openly within their circle governance. Some more radical companies have even experimented with self-set salaries! On a less extreme note, however, Holacracy would dove-tail nicely with the profit, and ownership sharing of Dilutive Time-Based Equity we discussed a few articles ago.

Conclusion

Overall, is it better? For many organizations, the answer is a resounding yes. Holacracy moves at the pace of reality, not at the pace of bureaucracy. It gives employees the power to act in real-time, to address problems as they arise, and to make decisions based on expertise, not title. It’s an organization that breathes, evolves, and, most importantly, empowers. When you give people autonomy and trust, they bring their best selves to work. The result? A system where innovation isn’t just encouraged—it’s baked into the way you operate.

The traditional models of work, in contrast, are failing us. They’re too slow, too rigid, and too hierarchical to keep pace with the demands of today’s fast-changing world. Holacracy offers a better way—a way that embraces autonomy, agility, and continuous evolution. It’s not about eliminating structure; it’s about creating a structure that works for people, not against them. A structure where the focus is on roles, purpose, and continuous growth, not on hierarchy and red tape. As I often say, people aren't bad, the structures we create simply fail us. By distributing authority, defining roles, and encouraging constant growth, Holacracy not only transforms the way we work, but the way we show up at work. It’s not an easy transition, but for organizations that make the leap, the rewards are clear: faster decision-making, greater innovation, and a more empowered workforce.

It’s time to stop squeezing ourselves into rigid boxes, hoping to fit into systems that weren’t designed for us. It’s time to show up fully, empowered, and ready to move the organization forward—not as individuals held back by title or status but as co-creators of something better.

To learn more, check out: https://www.holacracy.org