Holacracy is a management system whose methodological basis is based on the fact that decision-making power in companies is evaluated according to the work of the people and not according to the job title. Competence, experience and professional prioritization thus beat the classic hierarchy. Especially for changing or newly formed structures, a pragmatic yet structured form of approach is essential. The result is efficient communication, effective meetings, less bureaucracy and obstacles, and clearly distributed responsibilities and expectations.
The basis is the constitution, the “Holacracy Constitution”, which regulates the procedure of the cooperation via five chapters:
1. fill rolls
2. circle structure
3. governance process
4. operational process
5. entry into force
Due to the assignment to different tlw. nested and linked circles to which the team members belong, the “purposes”, goals and objectives/tasks of the structure, are named. The “what” is defined here, the “how” is left to the participants, taking into account defined rules.
The circles represent “hierarchies”, so that the superordinate “super-circle” can set up or dissolve the subordinate “sub-circles”, but the sub-circles are rather specific tasks that have to be done for the big picture than personal hierarchies.
There are four different roles for each circle, which can be filled by one or more members, even across circles. The two roles “Lead Link” and “Rep Link” represent the connection to other circles, with the “Rep Link” representing and communicating the internal intermediate states to the superordinate super circle; the Lead role communicates internally the findings from the super circle. The lead can be compared to a cell wall, which protects the frame and the shape of the cell and temporarily takes care of unoccupied roles. The two link roles should always be filled by different people.
The other roles “moderator” and the “secretary” take care of the processes in their own circle.
Each role controls the way of working according to predefined rules and provides overall transparency, structure and progress for the company.
In the governance and operational meetings, the items required for effective processing of the tasks are processed and updated in accordance with defined procedures.
A core concept in holacracy is the use of “tension” with positive connotations instead of “problems” or “challenges.” Tension can be named by any participant in each meeting and should be seen as a drive or energy to change a current state into something else.
With the introduction of holacratic approaches, it can be possible to generate tension-reduced transformations, since a lot of classically informal knowledge is openly communicated and can be controlled in a goal-oriented manner. With new tasks within the organization, new divisions can be made fluidly, creating the goal-oriented enterprise.
Despite the lack of hierarchy, smaller, iterative course corrections yield quick results that can be readjusted with strategic direction through regular review.
Advantages
– Iterative “updates” of the organizational structure based on concrete requirements
– More flexible operation and ownership of the circles
– Reduction of bureaucracy and hierarchies
– Clear rules for management, distribution of power and assignment of roles
– Reduction of personal sensitivities through role
instead of personal reference
– Efficient collaboration through defined processes
Disadvantages
- Introduction requires training period and willingness to change
- Salary and compensation structure can lead to tensions
- Potential for frustration due to loss of long-term titles and privileges or responsibilities