People and Holacracy: Four Necessities for Success

Holacracy is the new rage when it comes to organizational structure. It's a relatively radical new approach that distributes power, tries to remove hierarchy in favor of self-organizing teams, and strives to make organizations leaner and more adaptable. Holacracy proponents argue the world moves too quickly for the stolid organizational structures and procedures of the past. Companies need to be nimble and make decisions that can be implemented and iterated on quickly. Holacracy tries to support this reality by removing the more rigid aspects of organizational structure that most of us recognize in an attempt to make working for the organization more efficient, productive, and even more meaningful.

Personal skepticism aside about the need for leadership, direction, and whether hierarchy can ever really be eliminated (I don't have personal experience working in a holacratic organization) I do acknowledge that holacracy is an exciting development for much of the knowledge work world and may be extremely beneficial when thoroughly adopted. For an organization to really thrive in a holacratic structure, though, I think there are some pretty crucial psychological characteristics employees need to develop. In fact these psychological characteristics apply in any organization that offers even a modicum of autonomy in terms of how you do your work. Autonomy in your job can be an incredibly motivating characteristic but only if you have the skills to take advantage of it.

I humbly submit the following four ideas for consideration as vital to succeeding in any organization where the employees have a high level of autonomy (holacratic or otherwise):


People with high self-leadership are able to take action on the things they know they need to do even when they don't necessarily feel like doing it. In an organizational structure where there is no direct feedback coming from a superior it places the onus for figuring out what to do and then making sure it gets done on the individual employee. Employees with high self-leadership can guide their own behavior with a minimum of oversight. Self-leadership can take many different forms, from behavioral strategies like self-reward or self-punishment, to finding enjoyment in the work itself, to structuring your environment to support your work intentions, and a host of other techniques.

Personal productivity

The whole point of adopting a holacratic structure is to make the organization more capable of getting things done (which, ironically, is also why more rigid structures were originally created, too). Regardless of structure, an organization is only going to be as productive as the individuals who make it up. Ideally holacracy cuts through the red tape and bureaucracy that often blocks personal productivity. Employees with a relentless drive toward completion and a high level of self-leadership are going to become even more valuable members of the team.

Tolerance for ambiguity

Managers often remove ambiguity for employees by assigning work and giving feedback. Holacracy removes this which means you need to be much better at being okay with ambiguity. Entrepreneurs have generally accepted this as part of the experience of getting into that line of work whereas the world of steady full-time employment has usually minimized it (i.e. job descriptions, performance evaluations, etc.). That divide is being closed as being an employee becomes more like being an entrepreneur. Fluid situations that are constantly changing are by their very nature ambiguous. Removing that ambiguity may feel nice and secure in the moment but in practicality is nearly impossible. Instead, employees have to get better at reconciling the complexity they perceive on a daily basis with the desire to have discrete projects and make visible progress. It's still possible to do both of these things, but the path to completion is likely to be much more winding than it used to be.

Psychological capital

Organizations usually have a good handle on their economic and physical capital. It's relatively easy to see and wrap your arms around those concepts. Even social capital, the relationships among the members of an organization, can be observed and noted. However, quite possibly the most important type of capital to the success of any organization is psychological capital -- the extent to which its members have Resilience, Efficacy, Optimism, and Hope. Without this an organization has nothing. It seems to me that holacracy eliminates the productive layer that can act as a buffer between employees with low PsyCap and their impact on the organization. For better or worse, PsyCap will have a greater impact on the holacratic organization. Luckily, it appears that PsyCap can be taught, enhanced, and developed.

Coincidentally (or maybe not) these are the same characteristics I've been homing in on for my research on independent workers and entrepreneurs. We know that the ranks of the independent are growing and if we begin to include the employees of holacratic organizations then the number of people who need development in these characteristics is growing even quicker than I first thought.

Do you work in an organization that has adopted a holacratic structure? What has your experience been? More generally, where does autonomy feel like more of a curse than a blessing in your job (regardless of whether it's within a holacratic organization or not)?

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Photo by Mark Chadwick

Weekend Reading #1

Each Friday I'm going to share a couple of the links that caught my eye over the previous seven days. This week, two articles from the Wall Street Journal and one from the thought provoking (like usual) Rands. Throw these into Instapaper (or your read later app of choice) and enjoy them over a Saturday morning coffee, eh?

How to Avoid That Sinking Feeling When in a Fishbowl - The Wall Street Journal

Steelcase is creating "quiet spaces" to sell to organizations looking to provide work environments for their resident introverts. Ignoring the fact that introversion seems to be a hot topic nowadays (Sean Blanda has a good take on it), I like the movement toward diversifying workspaces. It doesn't make sense that every person in an organization (given their strengths, preferences, and working styles) should complete every type of task (from brainstorming, writing, communicating, etc.) in the exact same environment. For employees this means management has to do things like providing different spaces for different types of work and types of worker. For indie workers, it means you have to think deliberately about what you're trying to do and the best environment in which to do it (more on this coming in an article next week).

Work Creates Less Stress Than Home, Penn State Researchers Find - The Wall Street Journal

"In a new study, published online last month in Social Science & Medicine, researchers at Penn State University found significantly and consistently lower levels of cortisol, a hormone released in response to stress, in a majority of subjects when they were at work compared with when they were at home. This was true for both men and women, and parents and people without children."

This study didn't include people who work for home which makes me wonder if this means indie workers who work from home experience work to be more like home-life (i.e. more stressful) or if they experience work to be more like home (i.e. less stressful). My guess is that indie workers who have developed routines and norms (for themselves and their family) are able to bring some of the stress reduction of work into the home. Otherwise, and this is probably more common, I imagine indie workers are experiencing greater stress at home and at work.

Chaotic Beautiful Snowflakes - Rands in Repose

"I am actively watching zero leadership experiments in progress at Medium, GitHub, and Zappos, but I am a firm believer that you need a well-defined leadership role to deal with unexpected and non-linear side effects of people working together. You need someone to keep the threads untangled and forming a high-functioning web rather than a big snarl of a Gordian knot."

The experiments currently happening with holacracy are interesting on both a practical and academic level (at least for an organizational theory/structure nerd like myself) but the leadership coach in me is siding with Rands regarding the importance of leadership. A good leader serves to amplify and organize the work of those he or she works with -- not as a bottleneck. It'll be interesting to see how these experiments work out -- especially in highly complex environments.

Photo via Sameer Vasta