Holacracy - the curse and blessing of a form of enterprise

Data protection, artificial intelligence, economic uncertainties - companies will have to master a multitude of complex challenges in 2019. In addition to innovation and quality, one thing is required above all: flexibility. Being able to react quickly to changes enables companies to do business adequately. But how can this flexibility be implemented in the company? Holacracy is currently considered the key to success on the job market. What is behind this trend?

Holacracy: What is it?

The term holacracy describes a revolutionary form of organization for companies. Holacracy abolishes hierarchies and thus transfers responsibility to the employees. They are given participatory opportunities to participate and coordinate their work in so-called circle structures.

In holacracy, a company is therefore no longer controlled centrally, but distributes control among various roles - following nature's example. Dynamic control is the keyword here. This is intended to enable evolutionary further development of the company.

The evolution of the world of work

If we take a look at nature, we usually see the same thing day in and day out: clouds in the sky, trees in the forest, birds in the air and a cat behind every street corner. What looks like routine, however, has been subject to major changes again and again for thousands of years. These changes or tensions serve our ecosystem as impulses for further development, in short: evolution. By adapting again and again, our animal and plant world is able to withstand change and hold its own against setbacks. But what does evolution have to do with our working lives?

Our working world is also subject to constant change. Whether a new data protection law is making life difficult for us or we are at war of the roses with an artificial intelligence, tensions between the known and the unknown keep cropping up. However, we should not view these tensions as disruptions, but as impulses for change and growth.  This is not only the survival strategy of our ecosystem, but also the principle of holacracy - a new form of corporate governance.

I make the world, as I like it....

Entrepreneurs agree that it makes sense to do away with useless communication channels and turn their backs on outdated hierarchies. But how effective it is to remove the captain from the timetable and let the crew set sail on their own is currently the subject of heated debate in the business world. Holacracy has fiery advocates as well as passionate opponents. Its advantages are obvious: decisions are made where the necessary competencies lie. More responsibility on the part of the individual usually also leads to more initiative and agile corporate management. But what are the disadvantages of everyone doing what they want?

Freedom of choice means responsibility

The greatest risk of a holacracy is its executors. While some employees aspire to the top of the company, others are more comfortable with being assigned fixed tasks: There are employees whose expertise lies in delegating tasks, organizing projects and coordinating work areas, while it is the talent of others to carry out specific tasks with precision. In short, a traditional company often benefits from a certain imbalance of responsibility. If there is no one where the lines of communication converge and areas of responsibility merge, this has consequences. Not only is a common goal often lost sight of, but individual employees can also feel under too much pressure. Not everyone wants to have to decide for themselves and bear the corresponding responsibility.

Complex structures require sufficient resources

In addition, companies fail again and again with holacracy because the corporate form is very complex and correct execution is often not feasible. This is especially true with large numbers of employees. Thus, companies undergoing a change process must do preliminary work and gradually convince their employees of the need for change. This means not only investing time and money, but also jointly designing a transition phase that leaves enough room for discussion and demand. However, holacracy has such a complex structure that an ordinary change process usually leaves questions unanswered and employees unprepared for their new tasks. The fact that no one is responsible for coordinating this project after the transition phase (there will no longer be a management level) already suggests that problems can arise. Is that why we should advise against a holacracy?

Holacracy: New Gospel or rather Sinking Ark?

As the newspaper Die Welt describes, "proponents see Holacracy as the New Gospel of Work 2.0. Critics judge the systematics as a perfect technocratic distraction from the essentials." So what conclusion can we draw?

Every crisis in the world of work, every new challenge in the wake of digitization teaches us: companies must evolve. The metaphor of evolution is certainly appropriately chosen here by Brian Robertson and draws our attention to the fact that today more than ever, companies are called upon to question structures, loosen hierarchies and distribute responsibility according to competencies. These approaches are also found in agile management and show promising success. However, the fact that transparent processes and organized role allocation can make up for the absence of management personnel seems questionable at this point in time.

Find a form of business that suits you

Our tip is therefore: Identify where your company can become more flexible and where you would like to adopt holacracy approaches. But don't try to push through a corporate change in the blink of an eye for which your company is not yet ready. Instead, find out together with your employees how you can work most effectively and take enough time for the change process - after all, an evolution does not happen overnight.

You want to make your company more agile, but don't know how ? Here we explain how it can be done.

You have understood what the basic idea of holacracy is, but want to dive deeper into the topic? The video from Board Studios offers a detailed overview.

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