I do holacracy - an inside out structure

There are discussions about the structure of Holacracy being hierarchic, but still showing charachteristics of a flat culture. How can that be? I have found holacracy building the structure three different ways.

Firstly it is top down, since its initial structure is derived from the anchor circle and its purpose. Also from an initial proposal. As the differentiation in the first circle cascades down to the final roles, the first iteration of the hierarchy appears.

Secondly, the hierarchy is bottom up. Each and every tension felt holds the potential to affect the organizational structure. One proposal may go on smoothly without objection, another may be escalated (via the rep link) to result in a new role or circle on a higher level. It may even alter the company purpose.

The third direction is inside out. Defining the purpose is creating a higher consciousness in a circle to reach deep down for our shared values, passions, principles and anything that drives us. The purposes of circles higher in the hierarchy may be more abstract, while granular roles may have very specific purposes. Anyway, to have clarity the conscious work on defining the alignment of purposes needs to be done.


The clarity in the aligned purposes of roles and circles has an impact on the overall consciousness of the role-holding partners. Personal energies are freely flowing and filling the roles since the tensions and obstacles are constantly removed. This energy fine-tunes the structure by adjusting the roles to the personal element.

Holacracy is neither flat nor bottom up. These terms are not useful to describe it. Holarchy works differently in different phases of the organisation. Did you experience it?

I do holacracy - when hierarchy works

I experience that holacracy effectively disables, kills, slaughters, eliminates, eradicates, micromanagement.

Micromanagement usually happens, when people with authority are asked or they chose to take responsibility for the decisions of subordinates. This is never an uplifting story. It creates the image of one as a responsible, strong, capable, rescuer and the other as someone weak, incapable, who is not taking responsibility, and who needs to be saved.

Micromanagement is eliminated by the following things:

1. Distribution of authority - In holacracy power is distributed in a way that each role can and should do its job without unnecessary approvals.-

2. The integrity of roles and circles - Each role and circle is defined with a clear purpose. The role holder is firstly responsible to fulfill that purpose via her accountabilities. That makes a deeper commitment from the role holder reducing the chance of pushing responsibility away.

3. Defined domains - Since domains and accountabilities are defined for each role, any peer may express their tension if the work on your part is not done or not done according to what is the common understanding of your role's purpose within the circle. If the role of your peer is blocked, he can ask wether your role needs help, he may take individual actions and if the case is severe he may propose that certain accountabilities of your role are to be taken to make the work more even and fluent.

4. Healthy hierarchy - Or in other words, natural hierarchy. As no cellular structure is interested in molecular issues by its nature, no super circle is dealing with the issues of roles in the sub-circle. By its nature a governance meeting (derived from the constitution) is simply dealing with locally felt tensions that affect the present operation. In any super-circles the rep links and lead links present their tensions as speakers of the sub-circle, never as one role within that.

Where micromanagement may happen is the cooperation of a role and the lead link role within the same circle. But I experience that those partners who hold clarified roles, understand their purposes and hold themselves accountable are not the ones (or they are very hard) to micromanage. Also the lead link role is not a typical managerial role. It is just another role serving the circles purpose that can be criticized, helped, and further clarified.

Welcome to the world of pain felt, responsibility taken, decisions made and work done where and when it should be!

I do Holacracy 9. - learnings of the first months

Actually the first months lasted for half a year. If you prepare to deploy Holacracy by yourselves you will have to prepare for a hard and complex change management process. If you haven't practiced or heard about change management meet these fine penguins and their melting iceberg...

This half a year (between 2013 q4 and 2014 q1) was a kind of experimental interval. Our reasons to go for holacracy were these:
- We needed a kind of organizational operation system anyway.
- As an IT company, we were familiar with agile
- We looked for a lean solution
- We looked for a scalable solution
- We wanted empowerment
- We were on the brink of growing above 30 which is the first level where complexity usually rises and becomes a risky obstacle.

I was very conscious (and fearful) about the latter one, which made me hurry.

I would say the level of deployment is around 33% now. The supporting processes, like HR, finances, bizdev and some more are governed and managed via governance and tactical meetings and defined as circles. These supporting processes in our case include less employees but more roles and more policies than the core activity.

My learnings about holacracy during this time:
- Applying it is a fundamental paradigm shift.
- I would compare the complexity of holacracy deployment to reorgs, workshops, trainings and coaching of every employee of the company in the same period of time with very high intensity.
- It is painfully hard to do without help, but it is possible
- You need a sponsor. An owner, or a board member, and you got to be the champion.
- The speed of deployment depends on the speed how the skill of facilitation spreads.
- Elections are scary first, but it's no big deal.
- Processing tensions by integral decision making - in my opinion - is worthy of a Nobel prize in itself. Reducing the number of tensions in the company periodically gives the company the acceleration of a TESLA sport car. Although...
- you have to realize that first things will come first. Tensions won't let you make shortcuts or procrastinate on critical issues.
- It is not a good system for bad apples. Transparency is evolving fast.

For me the biggest proof is that over this half a year we grew in number from 30 to 40. We didn't even feel any of the typical problems that arise when your company grows and complexity occurs in a higher level. We managed to reduce complexity by consciously working on the tensions. And this was only the beginning. The best is yet to come...

I do Holacracy 6. - defining circles, roles

The first circle to define really should be the main (anchor) circle of the company. But I have to admit, I did not have the authority to to start with the anchor circle. The core activity of our company is software development, and since we were managing it with agile methods it was in quite a good condition. But the supporting processes, like HR, finances, IT support, bizdev really needed more consciousness.

I knew that I couldn't have started setting up circles without clarifying the purpose statement of the company. We worked on the purpose, on values and principles, but we did not set up the General Company Circle. This caused hardships later on but that will be an other post. It seemed to be my only option then.

So firsty I worked on the supporting processes. Here are the steps:

I define Holacracy circles by making the following steps:
- Define its mission. How to is here…
- Define its roles or sub circles, and define their mission statement as well.
- Define the most important accountabilities.
- Define its most important policies.
- Hold elections for their roles
- Define strategies
- Define domains, scopes, whatever is left.
- Set up its tactical meeting table or tool.
Now let's see it in details!

After creating the mission sentence I call everybody who is expected to contribute for the circle to join a brainstorming and map all the roles, ideas, processes that are necessary to fulfill the circles mission.

Since we people are extremely different creatures some of us may focus naturally on abstract ideas while others on problems, roles or values. Anyhow you should be able to categorize all ideas into:
- roles (possible sub-circles)
- accountabilities, that can be bound to specific roles
- policies
- projects or next actions

Roles should have their mission sentences as well, to have a proper allignment, so the next step is to work out these. Also after defining the roles you should have an idea about who will fill them, so it is time to make elections.

At his point we have spent at least 1,5 to 4,5 hours in 1 to 3 meetings together depending on the number of the participants, the number of the roles to be defined and the efficiency of our commmmunication and the meeting facilitation.

To define a strategic focus I call for a retrospective meeting. This type of meeting helps clarifying the pros and the cons of the current operation and the efficiency in alligning with the former goals. You can read about my method and experiences here.

At this point we are possibly after our 3rd or 4th 90 minutes long meeting. We have a deeper understanding of ourselves (in the context of the organisation), our contribution to the company (the super-circle), our connections in the processes. So after working on the organisation now it is time to work in the organisation.

Setting up a tactical board or shaping an online tool for this is quite relieving for those who are practical and waited to get things done during the past meetings. At the end of the meeting you have all your key accountabilities, KPI-s, and all relevant projects and next action on the board or in the tool.

The setup process is over. You can govern yourselves and do your tactical meetings as written in the constitution.

Do you have a better way? Do you, did you do it differently? What are your steps? What problems did you face when trying this?

I do Holacracy 5. - defining strategy

What is a strategy? For me strategy is the plan that incorporatest the essential milestones in a given timeframe to go towards the fulfillment of the mission.

What is it good for? As far as I understood the strategy of a Holacracy circle is basicly a tool. A tool helping practical decisions or when there are questions to be clarified.

It certainly should have a focus. It is good if there are issues beside the focus wich have emphasis on. I read that it is practical to define what the strategic focus has emphasis over.

As I reed in the constitution the Lead link has the authority to define the strategy of the circle. I assume this authority is useful when circle members do not have the skills to plan together. I prefer to facilitate planning together.

To define a strategic focus I call for a retrospective meeting. This type of meeting helps clarifying the pros and the cons of the current operation and helps alligning with the mission time to time. I ask a series of questions:
- What do we consider positive about the current operation? What goals have we reached? What problems ha we solved?
- What do we consider positive about the current operation? What problems do we have? What goals are we still far from?
- What are we missing in the current operation that could make a significant difference if it was avilable? What ideas have we had already about improving our operation?
- What are we grateful for regarding the past interval/months/quarter?

Answering these questions give the benefits of being conscious about our:
- successes, achievements, milestones
- strengths
- weaknesses
- ideas we already for improvement

I have to point out that the fourth question aims to touch our humane dimension to motivate and connects us with the issues previously uncovered and strengthen our allignment.

I usually work with a whiteboard, and after asking all these questions we have a list of suggestions that are waiting to be prioritized. The answers are mainly coming from the third question (suggestions, things we miss, ideas we already had).

When prioritizing, I ask all role filling people to mark the issues that they find it essential to focus on. It may be one or two rounds as you prefer. At the end we have a one word or one sentence focus, and one to three more issues that have a secondary emphasis.

And you? What are your practices? What questions do you use? Are you a lead link defining strategy alone or with some consulting? Or do you work it out together?

I do Holacracy 4. - defining the mission

What is a mission statement? For me the mission is the answer to the questions below.
- How do we contribute to the company, to the super-circle, to the product, or how do we add value to the customer?
- Why are we existing, why are we here?

I use these questions to clarify the mission statement, when there is already a sentence. But before asking a question I like to map the words the group has in mind or has a positive relation with.

For the start I ask all group members to write down all the words they recall thinking about our group. You may need to help the group if they tend to neglect verbs. Verbs are extremely important for a mission statement. This results in a long list.

Next is to clear the long list:
- Erase duplicates.
- Choose between synonims, if there is no difference in meaning.
- Erase most of the adjectives (a credible mission statement does not states anything about the quality of the contribution before the customer experiences it).

Then prioritize the clear list in 3 rounds
- Make all members underline or mark as many word as they find important about the group.
- Make them mark again those that they find extremely important.
- Get them to mark those that express the core existence, operation or values of the group.

Now it's time to write down the first sentences. This is a private assignment. If some members feel it impossible to write something down, let them know that it is completely ok to write a very simple sentence or just a series of words. Its not literature, its finding a sentence (or some words) that expresses both a conscious and an emotional relation between all of the members and the group purpose.

Next is to pivot the sentences. Read the sentences aloud and feel free to relfect on them (Facilitate the rounds strictly, make them fast). Focus on making positive reflectios. If you feel like making negative reflections only state what you miss from the sentence and make suggestions. At the end of the round choose someone’s sentence to go on with in the next rounds. You may choose more, but keep in mind the goal is to converge the versions into one final.

Make some more rounds with highlighting the positive elements of what you heard and suggesting alterations. In case of negative critics always make everybody suggest, never let anybody demand altertions. If one can’t make suggestions she may ask for help.

If the group is open enough and communication is finetuned already the chance is high that you have a good sentence in some short rounds even if you skip the part with mapping the words. 

But be patient and note these:
- There are nations with relatively passive language and thought patterns (compared to English) where a purpose/mission statement is not part of the usual best practices. There you may need the word mapping parts.
- We people are thinking and expressing ourselves very differently. And I mean VERY differently.
- People find motivation in different values, different actions, and different phases of the very same process.
- Some people like to set goals, some like to solve problems, some like to work in opportunities. These people think and speak differently about the same issue
- Usually people are at different level of emotional and social maturity and that may poison the communication of some issues.
- People have different ambitions. Some aspire to be captains, some to be strong players, some to be middle captains.

These are completely ok. This is the human framework you have to work in to forge a common purpose.

One more thing. And this may be valuable for you as well.

After finalizing the mission statement. Don’t discard all the working papers. Have a 5-10 minutes session to collect all the strong words you came up with but left out of the final version. These may be part of a valuable principle, a value list or a policy. Thinking over these words you may have better grasp on the strategic next steps.

Hope you found it useful!

By the way... Do you do it differently? What is your way?