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Business Performance Improvement Resource

BPIR Best Practice ReportVolume 11, Issue 2

Self-Managed Teams and Holacracy®

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Welcome to BPIR.com’s Best Practice Report series BPIR.com’s best practice reports are designed to provide you with information about best practices relating to a specific business topic. Each of our reports provides a succinct review of the topic, expert opinion, best practice case studies, latest research, benchmarks, and self-assessment resources. Various materials—such as e-books, reports, and infographics—are provided as downloadable links.

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Action Plannin• gActivity Based Managemen• tAwareness & Prevention •

of DiabetesBenchmarkin• gBenchmarking • 2Business Continuity Plannin• gBusiness Excellenc• eBusiness Excellence • 2Business Outsourcin• gCall Centre Representative• sChange Managemen• tCollaborative Tools and •

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ManagementCustomer Complaint Resolution • 2Customer Complaints Resolutio• nCustomer Knowledge •

ManagementCustomer Loyalt• yCustomer Loyalty • 2Customer Market Segmentatio• nCustomer Order Managemen• tCustomer Profitability •

ManagementCustomer Satisfaction •

Management Customer Satisfaction Survey• s

Customer Service Excellenc• eCustomer Service Trainin• gCustomer Support and Servic• eCustom• sDesign Thinkin• gDesign Thinking • 2Diversity Plannin• gDrone• sEmotional Intelligenc• eEmployee Communicatio• nEmployee Developmen• tEmployee Happines• sEmployee Interviewin• gEmployee Motivatio• nEmployee Motivation • 2Employee Onboardin• gEmployee Suggestion Scheme• sEmployee Recognition•Enterprise Risk Managemen• tEthical Business Practice• sExcellence in Local Governmen• tFleet Managemen• tFlexible Work Arrangement• sGreen Supply Chain Managemen• tHealthcare Excellence• Ideas Managemen• tInformation Communication •

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Sector Work and Life Balanc• eWorkplace Conflict Resolutio• nWorkplace Wellnes• s

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Volume 11, Issue 2: Self-Managed Teams and Holacracy®

The Definition Self-managed teams are groups of employees who work with minimum supervision. Whereas in a hierarchical organisation employees have to report to managers, self-managed teams are responsible for handling various assignments, solving problems, and making decisions. Holacracy is one of the more recent systems of structuring self-managed teams within an organisation. When fully adopted, there is no conventional management hierarchy; instead, power is fully distributed, giving individuals and teams the freedom to self-manage while staying aligned to the organisation’s core purpose. Holacracy favours small teams, called circles, with team members holding a number of different roles depending on the assignment. These circles self-organise, make rapid consensus-based decisions, and have the flexibility to adjust roles and solutions effectively to meet organisational goals.

The Stage Today’s complex, dynamic business environment means that organisations are having to reinvent themselves to survive. This can mean they have to redevelop their base organisational structure to be dynamic enough to respond to the challenges they face. Self-managing systems aim to eliminate the problems associated with management-centric systems, in which processes can be too rigid, creativity can be stifled, and decision-making can be too slow or restrictive. Self-managed teams can remove these obstacles, moving faster, operating with greater clarity of purpose, and taking decisions autonomously. Self-managing systems usually include the following five characteristics: distributed control; continuous adaptation to a changing environment; emergent structure based on local interaction (teams); positive and negative feedback; and, resilience (due to the system’s ability to adjust and repair itself). Holacracy is one such self-managing system.

The stand-out quality of Holacracy is increased productivity. The system was developed by Brian Robertson a little over 10 years ago to capitalise on the potential of employees. It distributes power to different circles of employees and empowers them to meet the goals of the organisation. Since Holacracy eliminates a hierarchical structure and the need for managers, it removes communication barriers and impediments associated with working in silos. Employees now have the autonomy they need to be the best they can be, and can take on the multiple roles in their circle to which they are most suited. Employees can work across functional areas, and directly discuss issues with the right person rather than having to go through a manager. Teams are empowered to assign or change roles to adapt to the challenges and opportunities they face on their journey to fulfilling an assignment.

Making a transition to Holacracy is not without challenges. First, you need to overcome the belief that an organisation needs to operate with a hierarchy if it is going to succeed. Another challenge surrounds the idea that positions define your work scope; in the new system you are a person “energising” roles (small subsets of various positions with one person having many different roles across functions or positions). A further big challenge is getting employees used to tactical and governance meetings. There are currently more than 1,000 organisations that profess to be Holacracy-based. In This Report…

1. What are “self-managed teams” and “Holacracy”?2. Which organisations have received recognition for their use of self-managed teams and Holacracy?3. How have organisations reached high levels of success through their use of self-managed teams and Holacracy?4. What research has been undertaken into self-managed teams and Holacracy?5. What tools and methods are used to achieve high levels of success using self-managed teams and Holacracy?6. How can success in the use of self-managed teams and Holacracy be measured?7. What do business leaders say about self-managed teams and Holacracy?8. Conclusion.

Author: Dr Alan Samuel, BPIR.com Limited Editor: Dr Robin Mann, Centre for Organisational Excellence Research Editor: Michael Adams, Thingwall Communications (Canada).

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1. What are “self-managed teams” and “Holacracy”?1.1 The Truth about Self-Managing TeamsSource: The Elkadeo Way, United States (date of information: 2017)Link (video): The Truth about Self-Managing Teams Application/Key learning points: Using traffic management as an analogy, this two-minute video explains how self-managing teams actually work. The system is managed by all members of the team rather than by a central manager. This way, the organisation is primed to be more efficient, more productive, and the people more engaged with the performance of the organisation.

1.2 What Is Holacracy?Source: HolacracyOne, United States (date of information: 2014)Link (video): What Is Holacracy? Application/Key learning points: This short video (under two minutes long) captures the essence of what Holacracy is all about: a different way of structuring or organising your company so that the power to think and take decisions is distributed amongst teams.

1.3 Why Holacracy? Source: HolacracyOne, United States (date of information: 2017)Link (video): Why Holacracy? Application/Key learning points: In a conventional or traditional company with a dominantly hierarchical structure, the pressure and responsibility for taking decisions and forging ahead lie with key individuals. Brian Robertson, the founder of Holacracy, explains how the system can take the pressure off leaders, and empower a team to be self-sustaining and effective in contributing to the goals of an organisation. 1.4 Holacracy vs. Traditional StructureSource: Education Link: Simon Hultén, Sweden (date of information: 2016)Link (video): Holacracy vs Good to Great - Change Management Application/Key learning points: The first four minutes of this whiteboard animation explain how Holacracy can replace a failing traditional structure and succeed. At the same time, you will be able to discover the key factors that make an organisation more self-managed than hierarchically based.

1.5 Newest Type of Organisation: The Self-Managed OrganisationSource: The Washington Times, United States (date of information: 2012)Link: Reinventing Management: What Colour Is Your Organization? Application/Key learning points: Frederic Laloux, the author of Reinventing Organizations: A Guide for Creating Organizations Inspired by the Next Stage of Human Consciousness, describes the latest type of organisation, which is called the Teal Organisation. Inspired by the work of Clare Graves, who used colours to depict the evolution of organisational types, Laloux describes the five models that have existed over the past 10,000 years. These are chiefdoms (red); military and government (amber); multinationals (orange); bottom-up hierarchies such as Ben & Jerry’s and Southwest Airlines (green); and, the self-managed organisation (teal). This is a useful comparison to show organisational structure trends over time.

1.6 The Holacracy Comic BookSource: iGi Partners, France (date of information: 2015)Link: Holacracy: a New Technology that Reinvents ManagementApplication/Key learning points: iGi Partners imported Holacracy from the United States to expand it in France and Europe. As part of its mission, it developed a comic book to show the benefits of the system and how it was adapted by iGi’s founder, Bernard Marie Chiquet. This makes for a fascinating read – and shares the system’s key messages in an entertaining and easily digestible way.

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2. Which organisations have received recognition for their use of self-managed teams and Holacracy?2.1 List of Licensed Holacracy Providers Source: HolacracyOne, United States (date of information: 2018)Download (PDF): List of Licensed Holacracy Providers Application/Key learning points: This is a list of individuals and/or organisations from around the world who have been certified to deliver Holacracy services. HolacracyOne is the licensee and certificate provider.

2.2 Self-Organisation and Holacracy ExpertsSource: Organization Builders, Netherlands (date of information: 2018)Download (PDF): Qualified Holacracy Experts Download (PDF): Holacracy Case StudiesApplication/Key learning points: Organization Builders is a leading company specialising in Holacracy and self-organisation. Read some of its case studies and the results that have come from implementing self-organising teams throughout organisations.

2.3 The Organisation of the Future Source: Deloitte, United States (date of information: 2017)Link: The Organization of the Future: Arriving Now Application/Key learning points: This excellent article captures the essence of the latest trends relating to organisational structure, and also provides insights into what the future might hold. The article gives examples of organisations that know their employees really well, which helps them quickly put together an expert, high-performing team capable of dealing with the imminent threats or daunting challenges that present themselves to the organisation. The article also points to self-organising, self-managing, and self-directing teams as the “new” rules for success in organisational development.

2.4 Who Uses Holacracy?Source: Structure & Process, Germany (date of information: 2017)Link: Holacracy Cases Application/Key learning points: Based in Germany, Structure & Process is an international consultancy promoting Holacracy. The consultancy is prominent throughout Europe and has a well-resourced website. It has a current list of approximately 80 organisations, all of which use variations of Holacracy. The consultancy uses Holacracy itself, and has developed a number of apps and resources that may be useful for you.

2.5 Holacracy Founder Source: HolacracyOne, United States (date of information: 2018)Link: About HolacracyOne Application/Key learning points: Brian Robertson is the developer of Holacracy, a customisable self-management practice for organisations. After successfully experimenting with Holacracy in his own software company for seven years, and backed by numerous awards, he started HolacracyOne in 2007 to assist other organisations interested in adopting the practice. Today, more than 1,000 organisations worldwide operate this type of organisational structure.

“Holacracy is the first fully formed alternative to ‘Command & Control’ that real companies are using

successfully.”—Adam Pisoni, co-founder of Yammer;

founder of responsive.org

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3. How have organisations reached high levels of success through their use of self-managed teams and Holacracy?3.1 30 Years Without Management: a Successful Experiment with Self-Managed TeamsSource: HubSpot, United States (date of information: 2016)Link: An Agency’s Successful Experiment with Holacracy Application/Key learning points: This intriguing short case study deals with an organisation that used the essential features of Holacracy some 30 years ago. It describes the difference between Holacracy and the traditional system, and details some of the shortcomings of the latter. The article illustrates what Holacracy looks like, according to the Phelps media agency. In his book Pyramids Are Tombs, the agency founder Joe Phelps suggests that hierarchies are obsolete and have very little usefulness. Instead, he advocates that employees and clients should work with each other directly, mutually educating each other and coaching each other towards a common goal. Phelps has been using Holacracy for 30 years and his agency continues to thrive.

3.2 Holacracy in Zappos: Discover a Better Way of Working Source: HolacracyOne, United States (date of information: 2015)Download (PDF): Zappos Case Study Application/Key learning points: The case study on Holacracy showcases Zappos (on p. 6), a large online shoes and clothing retailer based in the United States. It highlights the “lean operations” approach of Holacracy that resulted in higher productivity for Zappos. The study explains how the structure of self-managed teams enables the company to be more flexible and responsive to customer needs, and how “distributive authority” empowers employees to be more innovative. Though not a panacea for organisational problems, Holacracy does provide organisations with greater flexibility and nimbleness for problem-solving and decision-making.

3.3 Voys Learns to Play the Holacracy GameSource: InfoQ, Netherlands (date of information: 2016)Link: Voys Learns to Play the Holacracy GameApplication/Key learning points: Voys is a Dutch telecom company employing some 70 people. It is a highly progressive company with a dream of revolutionising what is already one of the most advanced broadband sectors in the world. The article features a 14-question interview with Jorg Vletter, who is a partner at Voys, on the subject of Holacracy. The article reveals how and why Voys adopted Holacracy and structured its circles. One of the company’s biggest challenges was to support its employees to feel more empowered and relevant in their job roles. Compensation, appraisal, and evaluation can be complicated in a Holacracy system, where the value and worth of changing job roles and responsibilities can be difficult to evaluate.

3.4 An Audacious Org Chart: 400 Leaders, 0 BossesSource: Inc., United States (date of information: 2013)Link: Morning Star’s Success Story: No Bosses, No Titles, No Structural HierarchyLink (video): Self-Management: The Story Behind Morning Star’s Success Application/Key learning points: The Morning Star Company is the largest processor of tomatoes in the United States and is a flourishing organisation. It pays 15 per cent more in salaries and 35 per cent more in benefits than the industry average because it doesn’t have to pay managers. The position of CEO is the only role that indicates hierarchy, and is considered non-conformant to the flat structure of the company. There are no managers, no titles, no promotions and no directives. The company is a great example of successful decentralisation theories and practices. If you have a little spare time, check out the video interview (over an hour in length) to learn how Morning Star has succeeded using a self-management structure.

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3.5 A Real Company’s Holacracy JourneySource: Enlivening Edge, United States (date of information: 2017)Link: A Real Company’s Holacracy Journey: A Collection of Short Stories Application/Key learning points: Is Holacracy the promising new fix to your organisational problems? Maybe it is, maybe it isn’t. This in-depth account concerns one of the earliest founders of Holacracy, medium.com, and its two-year journey learning the ins and outs of Holacracy, experimenting, and changing systemic and tactical operations along the way.

3.6 Holacracy at UndercurrentSource: Only Dead Fish, United Kingdom (date of information: 2014)Link: Holacracy at Undercurrent Application/Key learning points: This is an interesting interview with Clay Parker Jones, who is managing partner of Undercurrent, a digital media and marketing company. The interview highlights how the company has many circles comprising employees of relevant expertise, and eventual objectives that are aligned to company goals. Each circle is self-governing and independent, and is assessed more like a spectator viewing from a stand than by traditional methods such as reports. The article reveals why Undercurrent feels the move to Holacracy provides greater clarity in the roles being performed, and how its flexibility helps it respond to challenges.

3.7 Successful Organisations Adopting HolacracySource: Forbes, United States (date of information: 2016 & 2017) Link: Small Business, Big Opportunity: Replacing Traditional Management with Holacracy Application/Key learning points: Intrust IT is a highly successful company that embraces open book management, which is a system that allows employees to have full visibility and influence on the flow of money through the organisation. Holacracy, to them, performs in the same way, except only on the work side. The change to Holacracy has enabled Intrust IT employees to have strong ownership of the organisation.Link: Despite Its Flaws, Holacracy Is Saving the Future of BusinessApplication/Key learning points: Two companies give their views after having adopted Holacracy for about two years. The first company is ARCA, a 400-employee manufacturer of cash transaction devices; the other is Impact Hub, a globally-connected hub for entrepreneurs that has grown from seven to more than 30 people. Both agree the empowerment and dynamic steering of the organisation by employees through Holacracy is a good thing. Neither see it as being about bosses becoming hands-off.

“All of the systems around us are changing – education, judicial, transportation, military, government

– it would only make sense that organisations are changing as well. We need to let go of our old notions

about hierarchy and organisational structureto create new models.”

—Judith H. Katz & Frederick A. Miller, best-selling authorsand Organisational Development consultants

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4. What research has been undertaken into self-managed teams and Holacracy?4.1 Quick Guide to HolacracySource: HolacracyOne, United States (date of information: 2018)Download (PDF): Holacracy® Quick Start Guide Application/Key learning points: This is a basic guide to get you started on your journey to Holacracy. It contains links and pointers on how to get all the pieces you need in place. The checklist approach is particularly useful to make sure you have performed the necessary activities as you progress through the document.

4.2 Exploring Leadership in Self-Managed Project Teams in MalaysiaSource: Universiti Kebangsaan Malaysia (UKM), Malaysia (date of information: 2015)Download (PDF): Exploring Leadership in Self-Managed Project Teams in Malaysia Application/Key learning points: In self-managing teams, what happens to leadership when there are no bosses and everyone within the circle has an equal stake in decision-making? This excellent paper from the National University of Malaysia (UKM) discusses these issues in the context of two small and medium-sized organisations via interviews in a longitudinal study. The findings suggest that the role of an external leader becomes increasingly important, especially where there are conflicts to manage within the team. External leaders were pre-appointed to act as mediators between the organisation and the team.

4.3 Self-Managed Teams Need Self-Managed People Source: HRbartender, United States (date of information: 2015)Link: You Can’t Have Self-Managed Teams Without Self-Managed People Application/Key learning points: This blog is packed with content and full of links to excellent material that will give you a good understanding of the pros and cons of self-managed teams. Many organisations spend a lot of time looking for a reorganisation solution. Self-managed teams are good – but the real challenge is to find people who can self-organise, to put together a team of people who can synergise, and then to implement the whole system.

4.4 Leadership Characteristics in Self-Managing Teams Source: University of Twente, Netherlands (date of information: 2017)Link or Download (PDF): Leadership Characteristics in Self-Managing Teams or Download Application/Key learning points: Using results from interviews with a healthcare organisation, this 14-page research document indicates there are varying circumstances and situations that require different kinds of leadership within self-managing teams. The maturity level of the team, as well as the skill level of individuals within the team, also determines what leadership characteristics are suitable.

4.5 The Holacracy Influence on Social SustainabilitySource: DiVA (Digitala Verenskapliga Arkivet), Sweden (date of information: 2016)Download (PDF): Exploring Holacracy’s Influence on Social Sustainability Through the Lens of Adaptive Capacity Application/Key learning points: If you are thinking about introducing Holacracy in your organisation, this is an informative, comprehensive study on its merits and shortcomings. Specifically, it questions the social sustainability aspect in organisations by examining the effects of key elements in Holacracy with the elements of adaptive capacity. The findings include issues on longevity, trust, and organisational performance based on survey responses from practitioners in Holacracy organisations.

“Knowledge workers have to manage themselves.They have to have autonomy.”

—Peter Drucker, leadership guru

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4.6 Why Should I Care About Holacracy?Source: First Round, United States (date of information: 2016)Link: Here’s Why You Should Care About Holacracy Application/Key learning points: This is a great article from the stand-point of an agile and responsive organisation. It explains that while Holacracy does away with top-down control by distributing power to teams, it requires more rigour in defining roles and accountabilities than a hierarchical organisation. Holacracy can be uncomfortable to some because the whole approach is different and takes time to refine. This issue notwithstanding, this article shows how Holacracy facilitates creativity, rapid adaptability to changes and decision-making, and thereby superior outcomes.

4.7 The Holacracy Experiment in the State Government of WashingtonSource: WaTech, United States (date of information: 2016)Download (PDF): The Holacracy Experiment Application/Key learning points: Washington Technology Solutions (WaTech) is the technology agency for the State of Washington, delivering IT services that support state and local government. The office of the Chief Information Officer of Washington State Government experimented with Holacracy and hypothesised that it would have a positive effect on employee outcomes. The following were the findings:

600 employees participated in the experiment;•teams and employees showed a significantly better performance in all metrics;•decision-making was 10 times faster with the Holacracy group than with the comparison traditional group;•slow, cumbersome meetings were transformed into tactical meetings, hosting up to 20-24 agendas in one hour;•while there was fear and anxiety about the change, the outcomes were positive.•

5. What tools and methods are used to achieve high levels of success using self-managed teams and Holacracy?5.1 Handbook for New Employees in a Flat Organisation Source: Valve, United States (date of information: 2012)Link (PDF): Valve: Handbook for New Employees Application/Key learning points: Valve is a world-renowned gaming software company that produced “Half-Life”, one of the most popular PC games ever created. This is a guide to help new employees become acquainted with—and settle into—the organisation’s flat structure and culture. Pages 4-6 provide the most information about the company’s structure, and the reasons why it was designed as a flat organisation with no hierarchy. The guide gives an insight into how a flat organisation works from the point of view of the employees and their activities. Emphasis is placed on the expectations towards the use of office space, equipment, and time.

5.2 Holacracy to Promote Innovation Source: The Neumans Agency, Mexico (date of information: 2017)Download (PDF): Adopting Holacracy to Fuel Innovation Application/Key learning points: Embracing Holacracy does not mean abandoning structure altogether. It is more of a human-centred design that aims to meet the needs of consumers in a more intimate way. The multiple roles played by people in a circle and their interaction inevitably creates a certain amount of tension, which is a very important ingredient to innovation. This article will help you understand why.

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5.3 Reward and Compensation Systems to Motivate Self-Managed TeamsSource: IT Today, United States (date of information: 2010)Download (PDF): Developing Reward and Compensation Systems to Motivate Self-Managed Teams Application/Key learning points: This 72-page paper dates back to 2010 but is as useful and relevant today as it was then. It was written for technology-related companies but deals with ways of motivating self-managed teams that are transferrable to any industry. Moving away from traditional methods for rewards and compensation, organisations need to re-think not only how to retain, but how to inspire higher levels of productivity in a flattened organisation structure. The paper provides key motivational principles, as well as many practical conduits to operationalise a system to keep your team happy.

5.4 Decision-Making Challenges in a Self-Managed Organisation Source: Theseus, Finland (date of information: 2017)Download (PDF): Overcoming Challenges of Decision-Making in a Self-Managed Organisation Application/Key learning points: This is a 77-page thesis that describes the major types of self-management that organisations use, including the agile, Holacracy, and teal types of self-managed teams. The thesis focuses on decision making and how to overcome barriers in the decision-making process of a software company that has adopted a self-management structure. The findings can be applied to all industry types; the thesis emphasises the conditions necessary for organisations to be truly self-managed.

5.5 The Benefits of Self-Management Without Complete HolacracySource: First Round, United States (date of information: 2017)Link (PDF): Unlocking the Benefits of Self-Management Without Going All In on Holacracy Application/Key learning points: According to management guru Mike Arauz, it is possible to enjoy the benefits of Holacracy without adopting all of its rules and rigid approaches, especially in respect to meetings. The article suggests some design principles of self-management, underscored by the principles of Holacracy, which any organisation can use to build a self-directed, laser-sharp focus on growth, dynamism and responsiveness.

5.6 Fourteen Principles of the Future OrganisationSource: The Future Organization, United States (date of information: 2015)Download (PDF): 14 Principles of the Future Organization Application/Key learning points: Most of the 14 principles listed by Jacob Morgan, a futurist and best-selling author, point to smaller, empowered teams that can adapt and innovate quickly. Use of cloud technology, and the global distribution of knowledge workers and teams further intensifies the need for risk-taking, and taking decisions with minimal consultation with managers.

“Competitive advantage comes from fully utilising the discretionary effort of the workforce, not from buying the

latest gadget or using the latest management fad. Voluntary effort comes from employee commitment, and commitment comes from empowerment. It is simple human nature. Why?

In the words of Doug King, human resources manager at Weyerhaeuser, ‘It’s hard to resist your own ideas’.”

—Reggie Joiner, CEO of Orange and best-selling author

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6. How can success in the use of self-managed teams and Holacracy be measured?6.1 Measuring the Performance of Virtuous Organisations Source: Culture University, United States (date of information: 2017)Download (PDF): Measuring the Performance of Virtuous Organizations Application/Key learning points: Virtuous organisations are those that model the highest aspirations of people. Zappos, an adopter of Holacracy, is one such organisation, and is highlighted here along with several other interesting case studies. The model uses a new type of balanced scorecard that includes four perspectives: workplace humanisation, employee maturity, public impact, and contribution.

6.2 Measuring Success: Making Compensation Work in the New HolacracySource: The Pendolino Group, United States (date of information: 2018)Link: Making Compensation Work in the New Holacracy Application/Key learning points: Traditional hierarchical models of compensation do not work in Holacracy; instead, there are three broad areas to consider. First, what matters is the intrinsic value of every person’s position(s) in relation to the business strategy and business objectives of the organisation. The second area is the relative contribution or impact of each position on the actualisation of goals. The third area relates to transferable skills that enable members to be flexible in meeting customers’ needs, and be fluid in taking on new positions in a changing environment. Note that the website is a great resource with webinars and links that may prove useful to you.

6.3 How to Reward in Self-Managed TeamsSource: Corporate Rebels, United States (date of information: 2017)Download (PDF): How to Reward in Self-Managed Teams Application/Key learning points: When there is no manager, who assesses your performance and decides your reward? This seven-page article deals with the three-step method (define-measure-reward) of designing a fair reward system, and says it is cognisant of how some employees only think short term and try to game the system to look good. It advises that it is unwise to rush through steps 1 and 2 simply because you want to quickly reward your employee. Take the time to clearly define all three steps: this will provide greater rewards for the organisation in the long haul.

6.4 Performance Management Practices in Self-Managing Teams Source: University of Twente, Netherlands (date of information: 2017)Link (PDF): Performance Management Practices in Self-Managing Teams Application/Key learning points: The study examines performance management practices of self-managing teams within the Dutch healthcare sector. Self-managing teams are evolving and growing rapidly as the need for adaptive capacity grows within this industry. The findings of the study show that the involvement of self-managing teams in setting organisational goals and introducing certain financial incentives are top motivators for high performance.

“Holacracy is not a governance process ‘of the people,by the people, for the people’— it’s governance of the

organisation, through the people, for the purpose.” –Brian J. Robertson, founder of Holacracy

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7. What do business leaders say about self-managed teams and Holacracy?“In these times of self-directed teams, empowered employees, and “boundary-less” organisations, your worth as an individual employee will also get measured by your work group’s collective results.” —Price Pritchett, guru in merger and organisational change strategy

“Holacracy is not a governance process ‘of the people, by the people, for the people’— it’s governance of the organisation, through the people, for the purpose.” –Brian J. Robertson, founder of Holacracy

“Under the Holacracy constitution, someone who accepts a role assignment also takes on certain explicit responsibilities. These include:

•Sensing and processing tensions around the role’s purpose and accountabilities, through the various channels available •Processingaccountabilities:regularlyidentifyingspecificnext-actionsyoucouldtakeanddefiningprojects you could work toward to fulfil the role’s accountabilities •Processingprojects:regularlyidentifyingnext-actionsthatwouldmoveeachoftherole’sprojectsforward•Trackingprojectsandnext-actions:capturingalloftherole’sprojectsandnext-actionsinadatabaseor tangible form accessible to others, outside your own mind •Directingattentionandresources:consciouslyandcontinuallychoosingthenext-actionorotheractivitythatit makes most sense to direct your attention and resources toward, all things considered, and then taking that action.”

—Brian J. Robertson, founder of Holacracy

“In the old world, as a director you were a leader, but you were a leader because you had the title… And in this world, it’s not about the title. So if you’re providing that advice and you’re inspiring employees, it’s because they’re finding inspiration in you and they’re trusting your advice. It’s a much more rewarding situation from a leadership standpoint.” —Hollie Delany, HR director of Zappos

“Competitive advantage comes from fully utilising the discretionary effort of the workforce, not from buying the latest gadget or using the latest management fad. Voluntary effort comes from employee commitment, and commitment comes from empowerment. It is simple human nature. Why? In the words of Doug King, human resources manager at Weyerhaeuser, ‘It’s hard to resist your own ideas’.” —Reggie Joiner, CEO of Orange and best-selling author

“All of the systems around us are changing – education, judicial, transportation, military, government – it would only make sense that organisations are changing as well. We need to let go of our old notions about hierarchy and organisational structure to create new models.” —Judith H. Katz & Frederick A. Miller, best-selling authors and Organisational Development consultants

“The digital age is an era of participation and collaboration: people do not want to just be told what to do, they want to co-create and engage with their colleagues and customers, making decisions and owning tasks.” —MCR Consulting

“An organisation, no matter how well designed, is only as good as the people who live and work in it.” —Dee Hock, founder and CEO of Visa

“Knowledge workers have to manage themselves. They have to have autonomy.” —Peter Drucker, leadership guru

“Holacracy is the first fully formed alternative to ‘Command & Control’ that real companies are using successfully.”—Adam Pisoni, co-founder and former CTO of Yammer; founder of responsive.org

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8. Conclusion

Holacracy® is an example of a self-managing system. It is a way of structuring a company or organisation that replaces the conventional hierarchy of management. Instead of operating top-down, power is distributed throughout the organisation, giving individuals and teams more freedom to self-manage, while staying aligned to the organisation’s purpose.

Holacracy was developed by Brian Robertson and you can find good overviews of the system in Section 1 (1.2, 1.3, and 1.6). For those who advocate for Holacracy, the biggest selling point is increased productivity. Companies like Zappo’s (3.2) and Morning Star (3.4) have implemented the system very successfully in the United States, and Voys (3.3) is a great example of European adaptation. The excellent work undertaken by the National University of Malaysia (4.2) explains what happens to leadership when there are no bosses and everyone within the circle has an equal stake in decision-making.

To find out whether your organisation is suited to Holacracy and to adapt the system yourself, there is a quick start guide (4.1) with a useful checklist approach. The Neumans Agency in Mexico decided to adopt Holacracy to promote innovation – and was able to channel the tension created by people working together in multiple roles (5.2). Mike Arauz, co-author of the Responsive Org Manifesto, explains what happens when a company seeks the benefits of self-management without opting for Holacracy (5.5).

Whatever stage of the self-management journey you are at, you will be able to find information on the BPIR.com website. And don’t forget, we are always here to help you along the way.

Disclaimer: Recent information has been included in this report to ensure our readers are kept up to date with the latest research; where possible, permanent links have been provided. At the time of publishing, all links are live. We apologise in advance for any broken links that might occur after publication due to matters beyond our control.

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