Is holacracy still the future of management?
Shoe retailer Zappos is the best-known practitioner of holacracy, a radical management system that aims to make companies operate like software. In an extensive look at the company,
Holacracy is a trademarked system, developed by software engineer Brian Robertson, that’s in many ways a tool to get companies to operate more like software. Robertson uses engineering terminology and likens Holacracy to Apple’s iOS operating system. The system, largely misunderstood as non-hierarchical or flat, actually creates a new hierarchy around work rather than titles.
The term Holacracy is derived from the Greek word holos, which means a whole that’s part of a greater whole. In a Holacratic organization, the company is divided into a collection of circles that are encompassed by the largest internal circle (called the “General Company Circle,” or GCC) and then the board of directors. The system is designed so that circles can be created and disbanded at any time. The vision is for employees to hold multiple roles and move fluidly throughout circles, making it easier to efficiently and frequently reorganize the company.
Harvard management professor Ethan Bernstein, who has studied Zappos and other companies that are pursuing new modes of organization, tells that Holacracy isn’t the answer to becoming self-managing. Ultimately, it’s not about whether Holacracy is the answer but instead what problem you’re trying to solve. Holacracy’s biggest value, in Bernstein’s view, is that it provides a framework for effective conflict resolution: “Holacracy replaces that [traditional] structure with a structuring process, at least for particularly frequent kinds of conflicts, to resolve conflicts in a potentially less-hierarchical, more self-organized, and more adaptive fashion.”