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Holacracy: A Radical New Approach to Management | Brian Robertson | TEDxGrandRapids

Holacracy: A Radical New Approach to Management | Brian Robertson | TEDxGrandRapids

Translator: Rhonda Jacobs
Reviewer: Peter van de Ven Well, I’m an entrepreneur, and I learned one of my most
important business lessons on a day I nearly crashed an airplane. I was a private pilot, in training –
this was about 15 years ago – and it was time for my first
cross-country solo flight, which is hundreds of miles away
from my home airport, alone in the plane,
it’s the first time I’d done this, and I was pretty nervous, right? And I get up in the flight,
and my low voltage light comes on on my instrument panel. And, you know, they don’t teach you
much about the plane hardware when you’re learning to fly; I had maybe 20 hours
of flight time under my belt. And I didn’t really know what that meant, so my first instinct, of course,
is tap the light, but that doesn’t change anything. (Laughter) Next, I do what seems natural at the time,
I check my other instruments. And one by one I scan
through my instrument bank, and every instrument
says everything’s fine, except for the low voltage light. I have plenty of gas, my navigation aid,
I’m on course, I’m not losing altitude, air speed’s great, everything’s fine. Except the low voltage light. So what did I do? Well, I kind of figured, it must not be
that big of a problem, right? Only one instrument
is telling me anything’s wrong. So I’ll just ignore it,
and I’ll keep flying. Turns out that
that’s a really bad decision. (Laughter) I nearly crashed the plane. I ended up completely lost, in a storm, and violating international air space
by a major airport; it was very bad. And it all started when I out-voted
the low voltage light. Well, I did make it down,
a little shaken but unscathed. And I realized, at this point, that I’m doing the same thing
in my organization. Often, when we show up in a company, it’s us humans that become
the “censors,” the instruments. Right? We’re sensing reality
for that organization. It’s through us that our companies
get to be aware of their world and respond to it. And often, it’s one lone instrument that senses something
that no one else does, that becomes that low voltage light
tuned into information that’s critical when everyone else is saying, “You know what? I just don’t see it.
I think it’s fine.” And as a CEO and a business leader,
I had been making that mistake – I had been ignoring the low voltage
lights in my organization. So that started me on a quest: How do I build an organization where everybody gets to bring
all of their wisdom, all of their gifts, all of their talents, and there’s no risk that we out-vote
somebody that has some critical insight. And, you know, for a while I worked
on myself being a more conscious leader. My other leaders in my organization –
I worked on the culture. I tried to build an organization where the people were as aware
and mature as they could be. And you know what? That didn’t solve it. I realized that there
was something deeper at play that was getting in the way of one person
who sensed something important from acting on it in the company. And it’s almost like, I realized, it’s almost as if our companies
are perfectly designed to out-vote the low voltage lights, today. Something about the fundamental
structure and system of how we organize and how we scale
and how we build companies is stopping everyone from bringing all of their insights
and all their talents. So over the years that followed,
I experimented. I used my company as a laboratory, and I experimented with what alternate
systems and structures could we find. And what I eventually came up with,
I call a new social technology. Right? A social technology
is not a piece of software or hardware, it’s the way we humans
show up and interact. Democracy is a social technology. I was looking for a new social technology
to use in a company, a new way to organize and build and grow. And we eventually called it holacracy. I’ll share a little bit
about it with you today, but first, let’s look
at the social technology we know a little more about,
a thing or two, which is the management hierarchy. Right? This is what we’re used to
in organizations today. We have bosses.
Bosses break down the work. They hold people accountable. They do some things
that are really important. And as we look for alternate technologies, we need to not lose the importance
of breaking down the work, having accountability,
alignment and all these things. Unfortunately, when we have
management hierarchies, we often have some bureaucratic artifacts
and things that get in the way. We also have some interesting,
messy human dynamics, like sometimes how it really works. (Laughter) Right? (Laughter) Alright, so you’ve seen one or two of these
at play, perhaps. I think I was guilty of maybe
one or two of these myself, right? So, you know, we have messy
power relationships sometimes in our organizations. And I was looking for something different. and we see something different,
though, at play. We see another way of achieving order
around us all the time, if we just look at how a city functions, we look outside the world
around our organizations, and we look at the amazing amount
of order we see at play in our lives that don’t require bosses. So, you know, I flew in here
through multiple airports, got a ride, got to a hotel, checked in. I transacted with numerous
other businesses along my journey, and it all just worked. Right? There were taxis
available to take me places, a hotel to house me. All of this order is there,
yet there’s no boss directing it all; there’s no one saying, Okay we need a taxi to pick up Brian
at the airport right here, it doesn’t have to happen that way. In fact, I don’t need a boss
directing my life. I’m free to pursue my own purpose in life as best I know how. Right? To use my autonomy, my intelligence to transact my life and to engage
with others doing the same. And what enables that
is a nice system of rules. I know not to go take my neighbor’s car
when I want to drive to the airport. I take my own car, right? I have some boundaries. Right? There’s a system,
a framework of rules that allows order to show up
spontaneously when it’s needed. It’s an emergent order that happens
when we have the right set of rules. We don’t need bosses directing us
when we have the right set of rules. So how do we bring this
into an organization? What does that look like? That’s really the question
that holacracy answers for us; it gives us a system – a system of rules, a framework to get order without bosses. Let’s look at some of the big shifts
that it brings into an organization. One is, something
we’re used to in organizations is the static job description, right? How many of you, by the way,
in your companies, within the past 24 hours or so,
have run to your job description to figure out with real good clarity
what’s needed from you today? Right? Probably not many. They are typically useless. They’re out of date
by the time they roll off the printer. Holacracy replaces that with a very
different kind of job description, if you will, or a role description. And they’re dynamic;
they’re changing constantly. They’re not somebody’s good idea
that they invented in their own head, a year ago, of what you should be doing. They’re the result of you
and your colleagues working together every day
and trying to figure out, What do we need to pay attention to
to get the work done? And there’s a process
for capturing that in a set or roles. They give you real grounded clarity
that you do want to go look at, often every day, because it gives you real information about what we’ve learned together
and how we should work together. And the other thing here is
when you have a role, you need the authority and autonomy
to go execute it in an organization. And with most companies
we see the management hierarchy trying to delegate authority. But we all know, really, who’s in charge. Right? And when the boss
says something, you know – the boss gives you a “suggestion.” You know what that kind of means, right? With holacracy, it’s truly
a distributed authority paradigm, much like our city example,
our real lives, right? I know that I have the authority
and autonomy to live my life, to use my car and my computer,
and my neighbor doesn’t. You know, there’s no boss to tell me
what to do with my property, my life. And that’s what holacracy
brings into an organization. So when you have a role,
you have the autonomy to execute it. There is no boss to contradict you. It is yours to lead. Which can also be uncomfortable because it’s yours to lead. It’s your role. You have true distributed authority. And so does everyone else. Again, my neighbor
has his authority; I have mine. The same is true in an organization
running with holacracy. We each have authority;
it’s different authority. No one has authority over someone else;
it’s distributed authority. Another key shift here is – Anyone been through
the large-scale re-orgs? You know, every few years or so, right? Instead of that, holacracy says, You know what? We do need to re-org. We need to do it in small
micro-adjustments constantly, throughout the company. So there is a process, it’s called a governance process,
that holacracy adds. And it’s done in every team. And what it’s doing is inviting
everyone who works on that team to update those dynamic roles, to encode more clarity, more transparency
of what do we really need to do to work together better. This governance process happens
in every team as we learn together, and we’re constantly re-organizing
our team in little ways. So change becomes a constant
distributed function of the organization. And finally, anyone master the art of getting change done through politics? You kind of have to
in a lot of organizations today. If you really want
to get change to happen, you’ve got to learn
to play the political game. I learned early on that if the boss didn’t see
whatever it was I thought was needed, it wasn’t going to get very far. So if you want to enact change,
you’ve got to play the politics. Well, instead of that, what holacracy
gives you is a transparent set of rules – rules of the game for how to enact change. So instead of having to go
and convince everyone and build consensus, anyone been in
the kind of painful meetings where you’re trying to build
buy-in and consensus with everyone else in the room? And you get through hours of meeting
just trying to do that and don’t make much
in the way of actual work or decisions? I’d much rather go
into a disciplined process that allows me the ability to sense
something that I think should be better, and bring a proposal to change it,
and a process to hold that so I don’t have to play the politics and get the buy-in
and consensus and all that. Holacracy adds that in every team – a way, a process, a governance process,
again, to change things. And those rules are held
just like they are in society, in a constitution. So the first move we make when my company helps others
adopt holacracy use this practice, when we go into an organization and they’ve kind of
gotten a taste of this, and they’re pretty sure
they want to do it, the first move is for the CEO
to sign a declaration ceding their authority
to run the company however they want into a constitutional rule-set. This is an interesting shift. Can you imagine that – if you were a CEO
to cede that authority – it’s kind of like the dictator, you know?
giving way, stepping back and saying, “You know what, there is
a better way to run this country.” And I’m going to let go of my authority
to make that happen and allow it to be distributed. It’s the same within an organization here. It’s a distributed authority paradigm
held in a rule system in a constitution. So we have the organizations
around the world now that are using holacracy
are all using that constitution, that set of rules. They’re transparent, they’re written down,
everyone can see them, and everyone is bound by the same rules;
no one is above the law. So let me show you an example
of how this looks in practice. Here’s an example of one of these roles. And remember, this is not just
some job description written in advance, this is the result of our team
learning together and figuring out what do we really need
for me in my holacracy spokesperson role, which is the role
that brings me here today. And I have a purpose; every role
in holacracy has a purpose. This is a purpose-driven operating system. The whole point of holacracy is to help an organization
express some higher purpose. And that breaks down into every role. So my role has a purpose, and with that constitution at play,
my autonomy is protected; I have the authority in this role
to do anything that makes sense to me to express the purpose of my role or one of the accountabilities
that others are counting on me for. I have the authority to take any action
that makes sense to me, as long as I don’t violate
some other role’s property, just like I do in real life. I can do whatever makes sense to me as long as I don’t violate
somebody else’s property or their person. Same here. So, really interesting
to show up in this paradigm where there’s no boss
to ask permission for. I don’t need permission from anyone. Alright? In fact, in most organizations, you don’t really have
the authority to do something unless you go out
and get permission of some sort. You have to ask first. With holacracy, you have
the authority to do anything, unless it’s explicitly against the rules. And let’s see how that comes into play. Here’s a colleague of mine’s role: Web Architect – this is my colleague
Olivier who fills this role – and his role has what holacracy calls
a domain – in this case our website – a domain means property. So this is telling him
that his website architect role controls the domain of website. That means, to me,
in my spokesperson role, I can do anything I want
to express the purpose of my role, but I can’t go mess
with his property, the website. Alright? Great! We need
boundaries in organizations. We need order. When we throw out a management hierarchy, it’s not just about throwing it out
and going to chaos, it’s about replacing it with a system that actually allows
better emergent order. And this is an example – so I know if I want to update the website
to serve my spokesperson role, I need his permission; it’s his property. And I know I can count on him
for some things too. And he can count on me for some things. We don’t have any
boss – subordinate relationship. We are two peers
that are each leading our roles and following each other’s roles. We each get to be a leader and a follower depending on what domain we’re in,
what we’re talking about. That’s a very different way
of running an organization. And the cool thing about these roles is this is not a static
bureaucratic artifact. As I said, these exist in a dynamic flux –
they’re constantly changing. And they exist in what we call
a “circle” in holacracy. And a circle is the group of roles that all work together
for some broader purpose. In this case, we have
an “Outreach” circle. Which is kind of our marketing circle. And that holds the roles
of holacracy spokesperson and web architect and many others. And this circle has a governance process. So about twice a month
we gather as a circle. And everyone who’s
filling a role in that circle is invited to join us and to participate. And in this process we update these roles, we figure out, What do I need
to count on for my colleagues? And we make proposals, and we process those
through a disciplined meeting structure that allows us at the end of the day to have more clarity on
what do we need from each other, more transparency on how we work. And this is happening
throughout the organization in every circle, not just one. There are many circles
throughout our company. And there are circles within circles. It’s a very organic system. I like to think of this kind of like
cells within organs within a body. This is the same kind of structure
that you have, right? as a human. Our bodies are full of autonomous units –
every cell has autonomy. Right? There’s no boss cell
that tells the other cells what to do. Every cell has a boundary,
has autonomy, it controls itself. And, it has to be
a part of a broader system. It has some accountabilities to enact; it has to be a good citizen
in its environment. And yet, broaden up one level, we have organs that are also
autonomous entities. They have their own functions,
their own processes, and yet they exist
within a broader system. This is nature’s way of scaling. This is nature’s way
of dealing with complexity – lots of it – by distributing autonomy
through every level of a system, like this. And having governance, a function of actually dynamically
constantly responding to our environment and learning and changing – distributed
again throughout the whole system. Same thing here. The other interesting thing
with holacracy – these circles are not
entirely disconnected. There’s representatives
of any broader circle within subcircles. So our general company circle,
or GCC here, right? that circle has representatives
in each of these subcircles you see, and vice versa. Our outreach circle
elects a representative to serve outreach – that circle’s
interests within the broader circle to organize all of the other circles. So there’s kind of this connected,
distributed system that looks very different than any
management hierarchy I’ve ever seen. And in every layer there’s autonomy, right down to the individual roles. Very different way of running a company. The other really cool thing about this: Change is constant, and it’s driven by what you are sensing
in your role, getting work done. And you know anything sensed by anyone
anywhere in the company has a place to go to get rapidly
and reliably processed into meaningful change. So, tensions drive everything – that sense that we have of the gap between where we are
and where we could be. That’s driving change in this. So … If you want to learn more, please check out
the website, or my book coming out soon, “Holacracy.” Thank you for your time. Appreciate it. (Applause)

Reader Comments

  1. You have to remember companies like Zappos are not standard companies. They have a CEO whose innovative and creative looking for ways to change things constantly. That's the first step to change. The second is that this is all possible only through funding as such that he is able to provide and not many others can or are willing to do so.

  2. The biggest limitation is still the human factor. E.g. incompetence but some other doesn't see it, then if the role is given to the incompetent or inexperienced man, things are fucked up. After watching this, as i see, this would be useful only in parts of a project. Normal flow in scrum for instance and given roles for IMPROVEMENTS. not the daily work, just improvements. Daily tasks and the project flow needs overseers, who can decide who has to do what things. It doesnt make sense that you break down a couple of roles for some person then you see, that someones are overwhelmed, while others have nearly zero work at some weeks. Second: more people can see drawbacks of one's decision. That is simply fucked up that a role is totally giving authority for a person AND only for that person. Why not including always at least 2 or 3 people for one role? Maybe the book gives answers to these, but as I see it, this is fucked up and only because of the human factor.

  3. Interesting concepts, but many unanswered questions. The comparison with the human body is a failure. The human cells are not totally autonomous, and the human body would not go anywhere without the central nervous system – he totally ignored it. He also ignored cancer, what is what happens when cells grow in a disorganized way… what can happen easily without control. Relying in a self-regulatory system will require exceptional levels of maturity and trust. And how compensation and rewards work in a system like this?

  4. I see no difference in this verses the typical organizational corporate structure. Mothered are rules, follow them. That's all it is. Only thing he has done is try to make you feel like you don't travel a boss. Watch what happens when you do what you want and still get fired.

  5. I think rules is out of date. I do not believe we need rules for building up a succesful business. Th company of course need to find a structure together and agree on a vision/goal for the company but rules never led to any good. If people learn to self-management, why do we then need rules to do the right things?

  6. Great talk and concept. Will be hard to implement at every organization though. Look at the Growika website for workshop and events on holacracy / self-organization.

  7. Also check out Frederic Laloux – Reinventing Organization for more in depth research about the stages of organization/company. His research also include Holacracy as the latest management system which adopted by the "Teal Organization" who serves higher purpose. A useful insight, time to kiss good bye filthy corporation!!

  8. This is what is done in Quality Circles which is used for quality improvement and customer satisfactions.

  9. Hi Brian, cool to see my messy org image here (thanks for asking) and love your stuff, can you add a credit to me for the mage as its getting widely ripped off now. Pop up and in description would be good. Thanks, Mark Walsh

  10. It seems to me the key to distributed authority is "Transparency."

    I have no problem giving up authority to others as long as I have transparency to what they are really doing. And, Transparency should not be a problem for organizations since the organization owns the data anyway.

    Am I off track here?

  11. Posted the English version of my blog I wrote last year about Holacracy (a summary of the book using an Infographic), see:

  12. Hi TEDx, we would like to translate this talk into German but have noticed that this talk is not activated for contributions from the community. Would you consider enabling translations?

  13. If you and some of your neighbors shared a car to work, there would be way less traffic. Some things work out best with top-down planning and are indefinitely postponed while favoring bottom-up emergent dysfunction.

  14. Holacracy is an Orwellian language trick, because …
    " … a human as an EMPLOYEE who makes a product is paid less than what the same human as CONSUMER must pay for the same product to use it. The difference includes ALL EXPENSES and a concept called PROFIT which is not given to the same human who makes and buys the same product".

    Holacracy makes sense only if there are no employees but only owners of the organization (i.e. "owners" is meant in the most empowering and protected sense of the word, not as some Orwellian language trick)

  15. The reason all your trip activities worked is because you were seeking your own benefit, not the benefit of city or the whole society. You can not trust people in organisations to act for the benefit of the team, there might be some people in teams who are only looking for their own benefits.Just like you; while using a taxi, or taking a plane. You were in search of your own benefit.

  16. This feels very similar to the socialist means of production. Where as before (in Capitalism) it was power pyramid, now it is a democracy. Good to see people embracing Marx’s ideas without even realizing it. Hopefully soon people won’t be afraid of his name and can embrace his ideas

  17. Great idea but so many questions unanswered. How about the distribution of resources and budget? Who owns that? How about promoting or letting go of people? Wouldn't people owing the budget/resource allocation and promotions/firing be the ones with power in here too? Would that lead to politics too but in a less vertical but more horizontal manner, but still politicking? In any organisation, resources are limited and the distribution of those resources define its direction and power structures. In any case, this seems interesting and I'd love to learn more about how the orgs implementing this are tackling those issues.

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