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Holacracy: Circles within Circles


HolacracyFor hundreds of years, there has been little to challenge traditional hierarchies for their ability to organise at scale. Holacracy is doing just that.

It’s a form of Adhocracy, which we covered in an earlier article. But, whilst we are way past ‘peak adhocracy’, it seems that holacracy is is thriving.

Holacracy is a modern attempt to reform traditional hierarchies. It keeps the aspect of senior level overviews and subordinate focus. But it gives a far greater autonomy to individuals, and a more substantial decision authority to small teams at the focus of operations and change.

Where does Holacracy come From?

Both the word Holacracy, and the ideas behind its modern formulation, owe a great detail to British writer, Arthur Koestler. In his book, ‘Ghost in the Machine’ (US|UK), he examines the Cartesian concept of a mind-body duality, and suggests it arises because everything in the nature is both a whole and a part. This leads him to the notion of a ‘holon’. This is a whole that is also a part of something greater. And, if each holon is a part, then it is also an organising whole composed of the elements that make it up. Finally these elements are, themselves, holons.


Kostler called the relationship between these holons, a ‘holarchy’.

The idea that each whole is a part of something greater, and that each part is a collection of smaller elements is the foundation principle of holacracy. Really, it is just a new name for holarchy and, if one were cynical, one might posit that a philosophical term from a 1967 book cannot be later trademarked. Yet the company, HolacracyOne, has done just that with the term Holacracy.

Coining the word Holacracy

Brian Robertson coined the term holacracy as a label for a new organisational approach that he adopted for his company, Ternary Software in 2003. It seems the lessons the company learned were more valuable than the software it sold. By 2007, the company had become HolacracyOne and transformed its business to advising on the implementation of holacrcay in other businesses and not-for-profits.

In 2015, Robertson published the book ‘Holacracy: The New Management System for a Rapidly Changing World’ (US|UK). It sets out the principles he developed and the practices that support them.

What is Holacracy?

Holacracy is quite a simple model. Instead of managers, decisions are made by ‘Circles’. These are groups of individuals whose roles cluster around a coherent set of activities, processes or parts of a function. These circles can re-organise quickly, making this organisational structure highly agile. We’ll look at that decision-making process later, as it is one of the most valuable aspects of holacracy, and one that transfers readily to other decison-making meetings.

Each individual in a holacracy should feel highly empowered to make changes. Advocates say it leads to an entrepreneurial mindset. Individuals and circles are in constant search for incremental improvements, which makes this model a good one for making Kaizen work well.

Holacracy does have a hierarchical structure. Each circle sits within another, at a higher level. And representatives from the broader circle sit within it, to ensure alignment at the strategic level

HolacracyOne has published an excellent 2 minute video, that sets this out very clearly:


How to Make a Decision the Holacracy Way

I particularly like the way circles make decisions within a holacracy. It separates understanding a proposal from assessing it, and assessing splits into reviewing how people react from a review of their concerns. And concerns need to be expressed in terms of how a proposal might cause harm, or move the organisation backwards, rather than forwards. This means decision-making tends to create a test-and-review mentality, rather than a no-fail one. This is again consistent with Agile.

Here is a summary of the decision-making process:

  1. Proposal
    The proposer describes the problem and presents their proposal to address it
  2. Clarifying Questions 
    Members of the circle can ask clarifying questions, and the proposer may answer. But at this step, reactions to the proposal or discussion of what people hear are not allowed.
  3. Reaction Round 
    Now, each person can express their reaction to the proposal. The group listens to these reactions, but doesn’t discuss them or defend the proposal.
  4. Amendment and Clarification
    Having addressed questions and heard reactions, the proposer can offer any clarifications about what they mean. They can also amend their proposal in the light of the reactions. No one comments while they do this.
  5. Objection Round 
    Now the facilitator surveys each person in turn. They ask: ‘Do you see any reasons why adopting this proposal would cause harm or move us backwards?’ This is the formal structure of an Objection. Members can make as many objections as they wish, and the facilitator notes each objection without discussion. If there are no objections, the circle adopts the proposal.
  6. Integration
    If there are objections, this step develops a revised proposal that does not cause objections, but that still addresses the proposer’s problem. The group focuses on one objection at a time. When the circle has addressed each objection, it returns to another Objection Round.


Do You have Experience of Working within an Holacracy?

If you have, we’d love to hear your experiences, ideas, and questions. Please leave them in the comments below.


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