Karim was interviewed on The Age of Organizational Effectiveness show on how Holacracy can replace Bureaucracy.

A lot of times, an organization that is more bureaucratic can lead to interpersonal dynamics and processes getting in the way, and work gets bogged down. And, people often find themselves frustrated in bureaucratic organizations, because they don’t buy into the mission.

In this interview, Karim talks about how Holacracy addresses these issues and creates companies where people align around a purpose, take accountability for their work, and have a sense of ownership over their roles.

Why would a company want to run on Holacracy?

One of the first steps in moving toward Holacracy is really understanding what it is and overcoming some of the misconceptions that exist surrounding Holacracy.

A big misconception about Holacracy is that people think it doesn’t have hierarchy. When people hear the word Holacracy, they think of a flat organization where there is no power, there is no boss.

But, Holacracy does have hierarchy. In Holacracy this hierarchy is built around the work being done and not around the people doing it. It removes power from people or positions and gives the power to specific roles. This allows power to be more fluid.

For example, if the CEO has power every time they are in the room regardless of whether or not they are the subject matter expert, it isn’t a good situation. When the power is fluid and healthy depending on the subject or context, then power becomes a useful tool or energy source that moves around between roles rather than a rigid structure we all have to work against.

One of the big reasons companies consider Holacracy is to remove the bottleneck that is so often created by bureaucracy. This bottleneck that comes from everyone taking all of their questions and concerns, their need for clarity and assurance through the central system of the organization.

Holacracy creates a more agile environment that can remain true to the company’s purpose without having this bottleneck.

How does it further the organization’s purpose?

Holacracy is very different from bureaucratic organizations in the fact that it doesn’t use mission and vision statements.

Instead, the company has a purpose that is very grounded and clear. This is usually just one sentence about what the company is here to do.

When creating a purpose, companies will often ask, “What would there be less of in the world if this org didn’t exist? “What is this organization here to achieve?” “What, if achieved, would make this organization obsolete?”

On top of this, each role sets its own purpose that helps the overall organization achieve its purpose. Every time you take on work, you ask yourself if it helps fulfill your role’s purpose. All of these roles can really align to move a company forward.

This process can really make a purpose statement usable and relevant on a day to day basis in a way that vision and mission statements struggle to achieve.

How is it adaptive?

In Holacracy, each role has specific accountabilities. Everyone has a system of changing their accountabilities and the accountabilities of others they interact with.

These small changes are not controlled by the central system, but each team has the power and autonomy to make adjustments that can help better align with their purpose.

This allows refinements and adjustments in a way that no singular control system could.

When people hear this, they often ask how Holacracy keeps everything in check. They ask how everyone can change their accountabilities and not have the whole organization off the rails.

Holacracy allows for a lot of feedback. And, there are weekly tactical meetings for each team where they go through checklists, metrics, and project updates.

This makes sure everything is running smoothly and ensures you are on point with your metrics. You don’t just have to look to your boss to see if you are doing okay, but you can look to the metrics. The metrics can align roles to teams and teams to parent teams.

Holacracy also uses a software called GlassFrog that captures all of your organization’s roles and accountabilities. It becomes a living map of your organization. Everything is completely transparent, so everyone can see exactly who is responsible for a task, and this helps keep people accountable as well.

Who is it right for, and what does implementation look like?

There isn’t really a size barrier for implementing Holacracy. It has been done in organizations anywhere from 3 to 3,000. It is less about size and more about where the organization is culturally. Holacracy requires the people in your organization to be ready to step into an entrepreneurial role in their work.

If implemented all at once, Holacracy can come as a big shock, because it is a big change for an organization.

But, I’ve found a phased implementation to be very successful in making Holacracy a system that works for your organization and gives people ownership of their work.

Phases of Implementation

Initial setup - 2 to 3 weeks
Tactical implementation - 6 to 8 weeks
Distributed governance - 2 to 3 months

While it takes about 5 months of work for a full implementation, people should start perceiving the benefits between the first month to month and a half.

The result is a collection of people surrounded by an individual purpose where trust is an outcome of the system.

So, I encourage you to pause and look inward to ask if you are a functional team.

Ask yourself if your system is working for or against you.