Previously I co-wrote a piece asking a straightforward but controversial question – What if Government Embraced Holacracy? Apparently the piece struck a nerve because many were quick to criticize. As a writer who focuses on topics that are still relatively untested in government, I expect to get a wide variety of viewpoints.
However, the Holacracy criticism was interesting because it was all over the place. Apparently this topic is more than controversial…it was as if I hit on a taboo subject. Some people seemed to dislike it just for the sake of disliking it. Others seemed to regurgitate the common criticisms that had long been addressed. However, there were some comments that addressed legitimate concerns.
Here I would like to address some of the criticism and continue the discussion. If enough people were passionate to read the article and share their thoughts, they must agree that the current organizational structure has problems. Holacracy may or may not be the answer but until we take an unbiased look at it we will never know.
Criticism 1 – Holacracy is Unproven
This criticism is justified if you are talking about it strictly in the government sector, but that reason alone should not be a reason to wholeheartedly dismiss it. Everything is unproven at some point. With WaTech taking the lead here and Harvard Business Review doing a detailed study, we will get a lot more insight into what to expect. Even without that information available we can learn from WaTech’s experience in our interview with them or on their Holacracy blog.
In the private sector there are more examples of companies using Holacracy. However, the bigger theme in the private sector is around self-organization as a broader term. Organizations have been moving to organizational and social structures that closely resemble Holacracy for over 30 years. When Brian Robertson (Founder of Holacracy) spoke at Google, much of what he spoke about was already being implemented in some way at Google.
Holacracy should more correctly be viewed as a formalized system that took lessons learned from multiple successful companies and provided others a framework to implement those systems in turn. It is not much different to the way other popular models were formed. These systems may not be perfect but until you get a group of people using them and making improvements, what should we expect?
Criticism 2 – Holacracy Does Not Address the Bureaucracy
The reason organizations move to Holacracy are vast. With that being said, I do not believe addressing bureaucracy is one of them. Holacracy is all about getting work done and being able to adapt to a dynamic work environment. It is about delegating authority to the frontline instead of running everything through managers. You can still put filters and policies in place to address authority but it takes emotion out of the decisions.
The primary driver for WaTech to implement Holacracy was for attracting and retaining employees in a competitive market. Others may implement it to reduce internal politics but that only affects workers within the Holacracy structure. Elected officials and administrators will most likely sit outside of Holacracy oversight.
Criticism 3 – Holacracy Will Not Work With Elected Officials
See Criticism 2. Elected officials set strategy and influence work but they are not typically the ones doing the work. There may be some policies that have to be put into place to make sure the duties of elected officials are not affected, but the system is adaptable to such accommodations.
Criticism 4 – Holacracy is No Structure
This is the most common criticism because most people focus on the lack of managers, titles and job descriptions. In reality, Holacracy actually has a ton of structure and I could argue there is actually more so in the Holacracy system as opposed to a traditional hierarchy. Holacracy is structured by roles (the work that needs to be done) instead of by people. This structure is still hierarchical.
The main difference is that a traditional organizational structure is built by intelligent design. Meaning that somebody at the top says how the organization should be structured. If they see something wrong with the structure the organization usually has to go through a painful restructuring process.
Holacracy structure is built through evolutionary design and governance. This is accomplished based on actual experiences at the ground level and can change dynamically because roles can be easily transitioned to different areas of the organization. In today’s fast-paced and competitive environment, organizations, including government, need to be more nimble and efficient, and Holacracy may be a way to provide just that. Below is a sample graphic of a Holacracy structure:
Criticism 5 – Holacracy is a Tech Startup Trend
This is the most benign criticism I have heard. Sure, technology startups boast a relaxed culture with no managers, flexible work, freedom and many other perks. Some may even call it Holacracy but not many of them actually embrace Holacracy at its full extent. The trend is just that and some people dismiss Holacracy just because it is a trend. On the flip side, some people embrace it just because it is a trend.
The truth is, Holacracy has a very stringent governance process. In my opinion it does not make sense for small organizations because it is a lot of work to get it setup. If you already have an organization structure that is working why would you spend time, money, and resources trying to change it? Holacracy provides the most benefit to medium sized organizations that are struggling under their current organizational structure.
Criticism 6 – Nobody Understands Holacracy
Holacracy is a complex system and understanding it takes a significant investment in time. That is a legitimate barrier to Holacracy but also one that will improve over time. There are also consultants that can help you implement it and it is highly recommended that you use them. You will need to train people to be Holacracy experts inside your organization and it will take time for employees to adjust. Change is hard but if the benefits possibly outweigh the cost, you have to consider it.
There are examples of Zappos employees that had vastly different understandings of Holacracy floating around the web. The only thing I can say to this criticism is that the people I have talked to that have been through the training have a solid understanding of it. I am sure it is the same at Zappos. It just depends on what the angle of the story is and who they get to do the interview.
Criticism 7 – Zappos Failed at Holacracy
Many are quick to point out that the Holacracy rollout at Zappos has had its problems. Zappos is in the spotlight and their Holacracy implementation is different than what other organizations will go through. They are leading the charge on many new initiatives. For example, they created a roles marketplace where employees can view unfilled roles like an app store. They also had to build a compensation system that fits the Holacracy model. Their implementation is extremely complex.
Not to mention that Zappos is the first large company to implement Holacracy. Government agencies that implement it will not go through all of the hoops Zappos did. Instead they may look at taking a department approach of moving over a small agency in the beginning. As we gain experience, best practices for rolling out Holacracy will begin to emerge. So sure there have been bumps in the road but it is way too early to write off Holacracy at Zappos or any organization.
Final Thoughts
One of the things that I found interesting is that many people said that Holacracy is unproven but yet in the next sentence wrote it off completely. Being unproven should be a reason for caution but not a reason to write something off. We should instead find ways to try it out.
The traditional hierarchy may be the best solution but there are enough problems with it that we should at least explore alternatives. To end the discussion before it even has time to develop is the same as subscribing to the status quo. Even if Holacracy fails, there has to be some lessons we can learn from it. The only way you can discover them is to put it into practice. It can be done in a controlled manner so that you can limit risk and measure the results.