Holacracy differs from conventional management in that it emphasizes roles and not people. In a traditional company, one person has one job and a job description for what he has to do. In holacracy, roles are defined around the job, not around the people – as a result, one person can fill multiple roles and can work on different teams. Role descriptions are updated and modified by the team doing the job. Authority rests with the role not the people manning it, hence the job becomes more important than the individual.

Work done autonomously within specified roles

Traditionally, organizations have been designed in a hierarchical pattern. There have been attempts to change this to a flat structure of management but this has not been very successful owing to the lack of rigor, discipline and accountability.

The new method of running an organization that is being touted today is “holocracy” which is a way of shifting power and control away from a management hierarchy and instead, distributing it across well-defined, clear-cut roles. In this structure, work is done autonomously within the specified roles, thus cutting out the need for micromanagement from the top.

Self-organizing and self-regulating teams

Holacracy as a management tool has been developed by HolacracyOne, LLC and is now in use in organizations in Australia, France, Germany, New Zealand, Switzerland, the United Kingdom, and the United States. In this system of organizational governance, authority and decision making are in the hands of a group of self-organizing and self-regulating teams or units which function as autonomous whole units but are also part of the larger organization of which they are a part.

Contrary to popular belief, holocracy is not an unstructured system of management. In fact it is more structured than traditional organizational systems. There are specific rules and processes through which work is conducted and roles are defined.

Decisions made by a team

Under conventional management, the boss’ decision is final. Even when he delegates authority, any decision that is contrary to his initial brief has to be approved by him. His hold on all actions is total and his authority is complete. In holacracy, decisions are made by the team, locally. Authority is truly distributed.

Teams work within the parameters of the overall organizational objectives and goals but decide on their own what steps to take to reach the goal and fulfill organizational obligations. Issues are tackled and solved by individuals (and their respective teams) and not by bureaucracy. There is thus greater creativity and enterprise in conducting business and performing tasks.

Can quickly adapt to changes

Organizations can quickly adapt to changes – whether in the market, environment, governmental laws, competition etc – rather than have to wait for the top management to decide on what to do. Problems get solved faster without the interference and micromanaging of the top brass.

Since every team governs itself, roles are updated regularly to account for changes in the business environment via governance meetings that are held by teams at every level. Each change is a small one but it keeps the team on top of things whenever there is a problem or a learning opportunity. Roles and processes get revised and altered based on real happenings within the team, the company and the business environment. Traditional companies, because of their size and structure take longer to react to any situation or change.

Everybody is bound by the same rules

In most companies, things are done following a pre-determined set of rules which are difficult to change. These rules very often favor some workers over others depending on their position and closeness to the boss. In holacracy, rules are transparent and everybody is bound by the same rules because authority rests with the work process and the role. It cannot be changed for any individual. Hence office politics cannot determine who does what and why and how. Work, decisions and accountability get decided by the role and can be seen and accessed by anybody who wishes to do so.

Holacracy thus increases efficiency, transparency, enterprise and initiative within the organization and reduces the burden on leaders to be accountable for every decision.