Is Holacracy the New Hierarchy?

English: large meeting room

“Holacracy”, a term coined by hip, employee-centric companies like Zappos, is becoming a corporate culture buzz term. But is it a great way to organize an office, or is it just another buzz word?

What is holacracy?

Holacracy refers to offices where the hierarchy of traditional managers does not exist, and authority is distributed evenly throughout the office.

Hierarchy, on the other hand, is a more conventional, top-down approach. In order to be successful, it requires strong leaders who are able to motivate their employees through a more traditional, and almost parental role.  The problem with traditional hierarchy systems, however, is that if an organization lacks strong leadership or unified goals with its employees, it can affect employee performance and morale.

On the other hand, in a holacratic system, everyone is a leader of their own role, and everyone is a follower of their fellow co-workers, so there is no traditional management structure. This encourages employee ownership over his/her role within the organization and its direct effect on the end goal of the organization.

Though there are many benefits to a holacracy, the main benefit is the dissolve of tensions that exist between manager and subordinate. Because everyone has a stake in the operations, and each role is clearly defined, successes and well as opportunities are more easily identified and shared with employees of all levels.

 Some of the benefits of holacracy include:

  • Employee ownership of their position, tasks, and duties
  • Dissolve of divide between managers and subordinates
  • Resolve of tensions from authoritative approaches
  • More transparent operations
  • Clearly defined roles
  • Employee stake in all decisions, no matter their role, therefore –
  • Increased commitment to office goals and objectives

Because holacracy distributes authority throughout the office and gives everyone a voice, employees have the opportunity to share in the successes of the organization, and take ownership of their own piece of that success. In a traditional hierarchy, that ownership is blurred between the employee and the authority figure that assigned the task. Successes may also be diluted because credit is not always served to those who deserve it.

Though the idea of holacracy sounds fluid and un-mandated, it actually takes a great deal of structure to enlist. Without proper adoption, it can be chaotic, volatile, and disorderly. Therefore, before adopting a holacratic system, it is important to establish a sound foundation, distinct roles, circular structure, operational processes, and an accepted process for adoption. In other words, all cogs must work together to ensure success of a holacratic system.


Your turn – In what ways does your office exercise a holacratic system? Does it work? Why or why not?

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