Editor's Note: This is the second part in a series detailing ARCA's adoption of Holacracy as it's corporate organizational structure.
In our first post about Holacracy, we mentioned that Holacracy is “a comprehensive practice for structuring, governing, and running an organization.” These three concepts—structuring, governing, and running—are a good place to start when thinking about what Holacracy makes so different.
In Holacracies, the traditional org chart (CEO at the top, with a pyramid of management levels descending below) is completely replaced with a new way of organizing that focuses on the work to be done rather than the people involved. The company’s work is unpacked into a series of roles with defined purposes and accountabilities; some roles are created as circles containing sets of related roles. For an example, check out the organizational chart at HolacracyOne. The nested circles are all contained within the single broadest circle, and each has a purpose that funnels toward the purpose of the broadest circle, which is the company’s purpose.
Have you ever been through a corporate reorg? If so, you probably remember it as a tremendous headache—at best. In contrast, in a Holacracy, each circle holds regular “governance” meetings where the employees filling roles in the circle stop working in the organization and instead work on the organization, making proposals to change the formal structure of the organization in order to better organize the work of the company to achieve its purpose. Every employee filling a role in the circle has an equal voice, and there is a bias in the system toward experimenting with new ideas. These continuous, micro reorgs dynamically steer the organization by keeping its formal structure as close as possible to optimal.
Holacracy is a distributed authority system. Each role has a defined purpose and defined accountabilities, or expectations, but the person filling that role does not have a boss mandating what, when, or how the person does the work to meet the defined accountabilities. Instead, the person is free to take any action to express the purpose of the role, so long as that action does not violate the Holacracy Constitution or a rule that the organization has constitutionally put in place that prevents or restricts the action. How does this actually work? It’s simple! It sets up a framework (the Constitution and rules), and then gives people a generous amount of room to operate within those boundaries. Employees tend to be happy with the latitude given to them and reasonable in making decisions within the scope of their authority.
Next time, we’ll give you an update on how these concepts are coming to life at ARCA.