Holacracy -- an agile organizational practice for thrivability

[Allison Conte]

I'd like to introduce you to Holacracy, a cutting-edge system of organizational governance and steering practices that support organizational agility and Thrivability.

At the BAWB Global Forum, we were asked to imagine and design a new theory of the firm that goes beyond "the business of business is business" and expands the purpose of business to "do good" beyond providing products and services and creating wealth.

I agree with Peter Senge that, while we do need a new theory of the firm (starting with new governing ideals), any such theory will be incomplete and insufficient to change the business world without a set of structures and practices to go with it. That's what Holacracy offers.

Here's how Holacracy connects with the ideals and possibilities presented at the Forum:

Jeffrey Sachs argued that to solve our global issues, we must find a better way of making decisions. He said: "We must have group deliberation, goal-setting and decision-making. And it must be an appreciative approach."

Richard Boland advocated that management needs to move from a decision orientation to a design orientation. He said: "The idiocy of decision-making is that there’s never enough detailed information. [The traditional mode of plan-decide-execute] has a way of freezing situations and immobilizing people. Design thinking doesn’t start with a plan that you just execute. It’s a direction in which to start moving. The important thing is to maintain a design attitude so that we won’t falter when we start moving. A designer will experiment, put out a prototype – but not be tied to his or her idea. The idea is just a way to spark conversation, to get us going. It is not something to make a decision about… it’s something to play with, to work with. The difference is that, when we create something innovative, we won’t expect that everything will work out. When we run into resistance, we'll simply get a better idea, change direction and adapt. And that’s a good thing."

Bruce Mau said: "Design is not about single authorship. It is about our collective ability to solve problems."

Peter Coughlan said: "The best designs are ego-less."

A designer from Herman Miller (didn't catch her name) said: "The solution is inherent in the problem and our task is to reveal it."

Peter Senge asked, How we will live and work together differently to support well-being for all life? He said: "To design a sustainable human system... You must start with a foundation of guiding or governing ideals. Then you must design the practices/behaviors/processes and artifacts that support those guiding ideals."

Russ Ackoff said: "Managers in general do not understand that divide and conquer is not the way to improve a system. Breaking up a system into parts and managing them separately, with little interaction among them, is not ideal. Making each part as profitable as possible prevents the organization from operating as well as it possibly can. The way the part affects the whole depends on what the other parts are doing. No part has an independent affect on the whole. Therefore it is the interaction of the parts that matter – not their individual actions. To improve the performance of the whole, you have to improve the interactions of the parts, not the individual performance of the parts. Understanding and improving a system requires looking at the larger system that contains it. This is the opposite of what typically happens – usually we break a system down into its parts."

Roger Martin said: "It's no surprise that business education produces people who go into the world and use the past to predict the future, and merely refine and incrementally improve what already exists. It helps them to hone and refine within the existing knowledge domain, not move across knowledge domains. So they become administrators of 'what is.' Business education is shallow where it should be deep, narrow where it should be broad, and static where it should be dynamic."

Holacracy is an organizational "operating system" (structures and practices) that expresses Thrivability ideals through tangible and measurable behavior. It addresses ALL of the ideas put forth by the speakers above, and much much more.

For a complete overview of Holacracy, see my 2007 white paper (attached). I'm currently working on a live case study and will publish that in the next few months.

[Clinton Bennett, Work Systems]

Hello Ms. Conte

I enjoyed your article. I agree in principle with much of what you say. However, your discussion implies a greater level of power and authority given to the manager than may actually exists, even among upper management. A common practice on the front line, is for established managers to resist ideas, not to refine and make then better, but to stall innovation and change.

Many times, authority comes, not from ones position in the hierarchy, but from other factors such as technical experience of the individual, or from personal relationships and alliances within the management group. It's not that managers choose simple-minded approaches such as "Plan-Decide-Execute", but that most are directed to take this exact action by those who are establishing the organizations governing values, (Upper management, owners, boards of directors, or stockholders).

It would be great to remove the typical behaviors that are commonly seen in society as a whole from our smaller subset of organization managers. However, this can be achieved only if we assume that we have chosen a superior group to make up organizational management and I seriously doubt that. I fact, we tend to pick confident, intelligent, assertive people to be managers because that's really what it takes to be a successful manager in most organizations. Additionally, these characteristics are commonly associated among those with strong ego. This tendency makes major improvement and transformational change difficult with the same managers still “in place”, unless in the midst of some level of crisis. Thus, in ordinary times, the decision of least risks is to work toward incremental improvement models which tend to be less disruptive but may lead to slow bureaucratic tendencies. Still, the organization survives in the short-term, and that's really the only timeframe most organizations have the time and resources on which to focus.

Managers can choose to approach organizational behavior from this more progressive philosophy, but frankly, if the organization is not in tune with it, my advice to them would be to have their resume up to date before they go too far down this path.

Your ideas are insightful and I look forward to learning more about Holacracy.

Take care,

Clinton Bennett,
Work Systems on Twitter @clinton_bennett

[Sudhir Kade Raghupathy]

Allison,

Wonderful article, and having read many of the thought leaders and experts you cite, I am impressed with your work. By your standards and definitions it is quite possible I once laid down the groundwork for a holacracy of my own, five years ago, as part of a presentation I gave for Research ShowCASE here in Cleveland. Since defining this model and providing case work and research to help justify its merit since, I've enhanced it quite a bit, including refinements to the functional aspects detailed in the PDF provided in this blog post and attached below. The paper here was written with a corporate citizenship goal in mind, but I've found that the core design has many applications beyond that. A multiplicity of outcomes, if you will, on multiple levels of system.

Perhaps some of the concepts I refer to in my own article might merit discussion, or become enriched by the whole represented on this innovative Ning network. Perhaps this model might not just be a vision toward sustainability, but one capable of effecting thrivability ? I'll be running some evolutions beyond these core design and function paradigms by David (Cooperrider) soon - he offered me (at our recent Sustainability 2019 Summit), the opportunity to present some models for social entrepreneurship (now being put into action locally) in a near-future class of his. I'd love to hear thoughts, suggestions, and advice along those lines. In essence, I hope to help co-create an optimal model for world benefit - and it just might be that thrivability is the better goal to shoot for with this work.

Thanks again for your insightful article!