January 9, 2014

Holacracy Is Not The Answer To Your Employee Disengagement Issues

If you’re located in parts of North America where it’s been too cold to even blink your eyes lately, you may not have seen the news.

Holacracy is the new black.


In a nutshell, Holacracy is an organizational structure — initially devised by self-described “recovering CEO” Brian Robertson of HolacracyOne — that purports to do the following:

Holacracy is a distributed authority system – a set of “rules of the game” that bake empowerment into the core of the organization. Unlike conventional top-down or progressive bottom-up approaches, it integrates the benefits of both without relying on parental heroic leaders. Everyone becomes a leader of their roles and a follower of others’, processing tensions with real authority and real responsibility, through dynamic governance and transparent operations.

In a nutshell? Holacracy is a way to operate without the classic ‘command and control’ dogma found in many of today’s organizations.

It even has a constitution you are urged to follow.

Where Did Holacracy Come From?

Holacracy burst on the Twitter water cooler scene in early 2014 mostly as a result of Zappos. At the end of 2013, Zappos CEO Tony Hsieh (never one to remain stagnant with his organization) held a town hall meeting to inform the fine folks who work there that their current organizational structure was being tossed in favour of holacracy by the end of 2014. Apparently they were running a pilot in 2013 with 150 or so employees. It worked so well Tony decided to (eventually) scrap his CEO title and all Zappos employees would do the same under holacracy . Even Twitter co-founder Evan Williams has implemented Holacracy® at his new venture Medium. (and Alexia Bowers does a fine job defining the misconceptions of Holacracy)

And the mainstream media and bloggers then went wild for holacracy. It became the new black.

holonLost in the shuffle (I believe) is the origin of the term holacracy. I didn’t interview Brian, but I’d bet one of my Canucks tickets holacracy got its start back in 1967 when author Arthur Koestler penned the book “The Ghost in the Machine” and where he introduced the term holarchy. An ‘archy’ (as a suffix) is a rule or a government and a holon is both a part and a whole. Put them together and you get a connection of holons equating to what Koestler called a holarchy. Holacracy — at least how I view it — is a connection of roles and tasks (a part and a whole) in an attempt to get whatever matters accomplished in as efficient a manner as possible without the rigidity of bosses, hierarchy and other organizational infractions.

Holacracy — and what I think is its originating parent, holarchy — however will not solve your organizational disengagement issues. Don’t be fooled. Getting rid of titles, managers/bosses and spraying empowerment across your employees doesn’t fix the core issue of today particularly in long-standing organizations with a history of disengagement. Some might say it’s pouring water on a tire fire.

The core issues in today’s organization don’t require the eradication of bosses per holacracy or the creation of overlapping, self-governing circles. (ie. the holons) What it requires is for employees — bosses or not — to simply become humane.

That’s it.

Employees of any stripe, rank and colour ought to behave better with one another.

But behaviour change for any level of employee is extremely difficult when both ‘manager and subordinate’ (wow, do I loathe those terms) have been so used to the classic ‘command and control’ way of operating.

No one ever said change was easy.

Just ask President Obama about the Affordable Healthcare Act in America.

Yes, holacracy as a principle is a very cool concept — who isn’t for a healthier organization team and structure — but I wouldn’t want you to think it’s the silver bullet for you and/or your organization. (Alexia says as much in her Holacracy misconceptions post)

In particular, I don’t think you should go near Holacracy if your organization is large and/or disengaged.

Debating Holacracy

One example I’ll surface is debating what the fine folks at HolacracyOne (the ‘owners’ of Holacracy®) market on their website:


This graphic suggests to me that holacracy is the aforementioned silver bullet built to completely eradicate bad leadership and arguably poor management.


If an organization implements holacracy will employees (and thus human beings) suddenly forget that they were once territorial, anti-collaborative, close-minded and less than humane in their behaviour with other employees/humans?

I really don’t think so.

Organizations suck (and disengagement is so prevalent) because both managers and employees have forgotten what it is to be human. We don’t know how to be humane in the organization.

And it really isn’t getting any better.

Let’s professionally debunk each of the four points from the graphic above:

  • Can meetings be less painful without holacracy? Yes of course, and they can be led by anyone on a team if the right behaviours have been instilled into the organization on the whole to be open and transparent.
  • Can fiefdoms and silos be broken down without holacracy? Yes of course, but it takes organizational behaviours like collaborating, learning, sharing, participating and reciprocity for it to occur.
  • Can work patterns be improved across an organization outside of a CEO dominated structure without holacracy? Yes of course, if the perfect balance of push and pull, give and take or perhaps ‘flat army’ are deployed as a type of ethos that everyone adheres to.
  • Can managers as decision-making bottlenecks become cured without holacracy? Yes of course, and one way is to implement the Collaborative Leader Action Model from the Flat Army framework. Connect, Consider, Communicate, Create, Confirm and Congratulate … six key actions (in that order) that will lead even the most disengaged workforce into the highly engaged ranks.

I know this first-hand based on the results of where I ply my trade during the day.

In Conclusion

To be clear, I’m not against the good work that has come of the holacracy movement or what Medium or Zappos are both undertaking. I am certainly not having a go at the fine folks at HolacracyOne either. Having this type of discussion in the open is refreshing and somewhat surreal compared to the decades of prose written about top-down, rigid hierarchical management structures as the ‘way to manage’.

If you’ve made it this far, I simply wanted to get alongside the holacracy movement and suggest it may not be for your own organization.

It’s my belief organizations are disengaged today because they do not possess the open and collaborative types of participative behaviours that are necessary in today’s society. Holacracy might work for some but it doesn’t address the root issue for a disengaged employee or organization, which is … how can you and your organization become more humane?

What behaviours need to be instilled across your organization at any and all levels such that work can become a ‘work of art.

Work can feel good even with bosses. It requires, however, a radical behaviour change for all.

20 Replies to “Holacracy Is Not The Answer To Your Employee Disengagement Issues”

  1. Rightly said – It’s all to do with how “engaged” an employee is with the organization – irrespective of which model you follow

  2. Really appreciate the balanced opinion Dan, thank you. Since I’m very familiar with Holacracy, I’d like to share some thoughts on the points you raise.

    It’s very true that Holacracy is not a silver bullet, most of us at HolacracyOne are careful not to make such a claim (unlike press articles, which have relayed a lot of misinformation about Holacracy lately). That said, I think it can be pretty transformative, and employee disengagement is one issue where Holacracy has a lot to offer.

    In my opinion, employees aren’t disengaged because they’re inherently flawed, spoiled, or whatnot, but because their environment isn’t conducive to engagement. Many start a new job with a lot of energy and enthusiasm, only to spending the day looking at the clock after 6 months.

    From my experience, one big reason for this disengaging environment is that when employees sense ways they could improve how they or the team works together, they have no channel to process this “tension” into meaningful change. In fact, I think most issues and tensions between people in organizations are issues between their *roles*, not themselves as people (even though there definitely are those too, and they get entangled). Often times, conflicts arise between people because their roles have different goals. And yet they all want to get work done. In conventional organizations, workers’ options for enacting change are generally talking to the boss or playing politics – or a combination of both, which is very unhealthy for the organization and for the people.

    On the contrary, Holacracy allows everyone in the organization, when they sense that something could be better, to process it into meaningful change (e.g., a process could be improved, you’d like to be able to expect something new from a coworker, etc.). Holacracy offers anyone channels to enact change in the company – within certain limits to avoid causing harm, but at least it offers ways to process whatever “stuff” is in the way of doing your work. This stuff we call it “tension” – defined as the sense of a gap between “what is” and “what could be” – and that’s what fuels the evolution of the organization in Holacracy.

    When you have channels to process your tensions (whether you think the teams should be organized differently, the authority and accountabilities should be updated, etc), it is much easier to be engaged. Disengagement, IMO, is often the result of being stuck in (perceived) powerlessness. At some point, when you’ve tried to change things and it doesn’t work, you stop trying. You’re disengaged. Holacracy removes these obstacles to processing tensions. Then it’s much easier to have an impact.

    So yes, I think Holacracy has a great deal to offer around worker engagement, and I recommend anyone who’s genuinely interested in this issue to explore Holacracy.

    On the other hand, I don’t think Holacracy provides a full answer to everything people need to be fully engaged when working together. I’m thinking of many needs around peer recognition, quality of relationships, feedback, coaching, and advancement… All those things are not addressed by Holacracy – not because Holacracy is flawed, just because it’s not its job. Holacracy provides the framework in which all these services may be provided in the organization, so it’s not against other approaches at all. They just play at a different level. Holacracy is sort of the “operating system”, whereas many very important methods and processes can be added to it like “apps”.

    I don’t know how “flat army” would fit in that spectrum, and I don’t know enough about it to make an opinion, but I’d be curious. I hope this helps give another idea of Holacracy than what you may have seen in the press.

    All the best,

  3. Maybe the exposure Holacracy will get through Zappos will result in people starting to think differently about organizations are structured. The comparisons on the HolacracyOne site are laughable at best.

  4. I’m not sure if Holacracy is enough for enabling “humane” behaviours to flourish, but it certainly help in terms of deconstructing the conditions under which current practices came to life.
    Besides proposing new organizational structures, we also need to be open to get rid of our iluminism and its semantics to start thinking of ourselves as “under construction living systems”.
    I think we should stop thinking in terms of “instilling behaviours” and “organizations of our own” (“What behaviours need to be instilled across your organization at any and all levels such that work can become a ‘work of art’.”) if we really want to move towards genuine engagement.

  5. One can debate the impact of structural change (from a ‘siloes’ approach to a ‘multiple circles’ approach) on employee engagement, but what remains in either are the behaviours. That means there will still be constraints, conflicts and the like. I agree that focussing on bettering (becoming more humane?) these behaviours through collaborating, communicating etc. will have real impact on engagement.

    How to become more humane is an age old question, as summarized so well in 1984 by Depeche Mode: http://www.youtube.com/watch?v=ebQNsc8Y_os

  6. I always appreciate your honouring of language. Luminality and holocracy are great words that allow us to think about organizations and relationships in new ways. As I was reading this post I was reminded of Sally Helgesen’s Web of Inclusion and Ken Thompson’s Bioteam organizational models. I have to admit I also dipped back into Bolman and Deal’s Reframing Organizations.

    One of the best examples of a humane organization, in my experience, is Creo. The organization I work for now includes many ex-Creo staff and our not-so-unofficial mantra is to “out-Creo Creo”. If you are unfamiliar with the company or the philosophy you can get a glimpse in this video of Amos MIchelson talking about reducing the power of managers and consensus decision-making. http://youtu.be/mXTWMlRK0LE

  7. Completely agree, Dan, engagement is not about the structure but the attitudes and behaviour. Structures are not the obstacles for one who wants to empower, respect, hear, provide support etc to other. Structures are used to manage complexities, but not behaviour and attitudes.

  8. Great insight Dan. One small thought: Holacracy is certainly not the cure all for poor management, but like most changes must be driven by leaders who exhibit the positive culture they want. Holocracy may thrive at Zappos given Tony’s track record for embracing change and rewarding good leaders within the company. But if an organization harbors and promotes managers with low emotional intelligence, and there’s no driving conduit to remove them, holocracy may actually be another nail that drives productive people away.

  9. @Olivier – thanks for the additional insight. Flat Army is more like a combination of hierarchy and heterarchy fused with a more collaborative way in which to operate an organization. Happy to ship you a book.

    @Jason – yer right, if anything, the dialogue of organizational structures is much more out in the open now

    @Francisco – if not ‘instilling behaviours’ what do you suggest?

    @Geoff … People are People, love it

    @Jamie – splendid additional references, thank you so much … and yes, I’m somewhat familiar with CREO and the fab way they operated culturally. Great reference.

    @Tigran – attitude not structure, I think that’s as simple as it gets, nice one

    @Mike – I have no doubt Tony et al at Zappos will make it work. Let’s not forget they ‘were’ a start-up, are high-tech and only have 1500 employees. I don’t think that works in a ‘traditional’ company, per se, with large masses of employees. (that’s my overarching point)

  10. The structure does not make any difference. Pick anything and it will work- if you have a valid strategy and you can have an open discussion with adults who are collectively working towards the same objectives and can discuss the issues and priorities that bump against each other. And, people take action and are accountable.

  11. This, right here, is the problem of most companies:

    “But behaviour change for any level of employee is extremely difficult when both ‘manager and subordinate’ (wow, do I loathe those terms) have been so used to the classic ‘command and control’ way of operating.”

  12. You may want to read “Reinventing Organizations” by Frederic Laloux. I can tell you haven’t read it because if you had you would see that Holacracy is just one particular element of a much bigger movement called Evolutionary Teal. The analogy would be that Teal is like agile, and Holacracy is like Scrum. Holacracy is not the concept, it is but one specific methodology to address some aspects of the overal concept.

      1. Thanks Dan. I read the links you provided, and honestly, it seems that you are poking at these self-management developments because they are different from what you have published. Even wanting to debate Frederic kind of reveals the competitive undertones of your approach. You say that Teal is not practical, and YET…there are companies using it very successfully. Large companies with many thousands of employees. Companies bigger than Zappos. This is why it really appeared to me that you didn’t read the book.

        If one were to simply read your articles and nothing else, one could conclude that Teal is just some theoretical thing that “will never work.” The facts are, however, that it does work. Everyday. It’s very practical once you have the mindset of the staff onboard. Switching an existing company over to Teal will certainly involve some change stress, and may result in some higher employee turnover during the transition. This is to be expected when you’re talking about an evolutionary jump, where survival of the fittest comes into play.

        When you speak about these ideas being “cult-like” I would like to challenge that idea head on. Let’s look at some of the attributes of cult-like behaviour:

        * single autocratic leader
        * intense recruitment and indoctrination
        * required blind obedience to higher authorities
        * rising up a hierarchy through demonstrated adherence to the vision of the top
        * requiring great level of commitment even to the detriment of one’s social and family life
        * profound and sole focus on gaining money
        * high-up leaders having great mistrust towards the lower minions
        * leaders not sharing the organisation’s inner workings with lower levels, especially finances
        * providing the minimum rewards to members while demanding maximum performance from them

        These are clearly the attributes of nearly all companies/corporations out there, especially all those that operate as a meritocracy (Orange color). What is really happening with those who get bothered by Teal ideas is exactly what happens when a cult-member encounters the normal world, or when long-term prisoners get let out of prison, having been thoroughly institutionalized. In reality, people who work in “regular” corporations are indeed in a cult-like environment, where everyone is focused on making the few folks at the top rich, leaving their full humanity at home, and becoming cogs in a vast cult-like machine. This is why the freedoms and more enlightened mindsets of Teal companies appear like a “cult”, when in reality they are the furthest thing from it.

        What I’m seeing here really sounds like the story of old Tom Edison and his attitude towards Tesla. He did everything he could to turn people away from Tesla, to belittle his work, to belittle the man, and why? Simply because Tesla’s ideas and accomplishments were a direct competitor to Edison.

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