WTF   //   August 17, 2022

WTF is holacracy

A common frustration about the workplace is bureaucracy. Sometimes it feels like you need to convene a committee to make a simple decision that could have been answered in seconds if the right person was empowered.

Enter “holacracy,” a form of organizational structure that decentralizes authority and empowers individual contributors to make decisions based on their roles.

“In the holacracy framework of management, a person is the CEO of their role,” said Brian Robertson, CEO of HolacracyOne, a consulting and training firm. “They make all the decisions around their particular job.”

Robertson compares that to the traditional management framework where there’s a top-down structure that starts with the CEO. While that worked well 100 years ago, he said, today’s businesses demand agility because of how interconnected and complex they have become.

In other words, convening a committee to decide how to form a committee slows things down. 

“That’s what happens with managerial hierarchy because you end up in long, painful meetings where everyone discusses everything to death,” Robertson said. 

In holacracy, each role is clearly defined and expectations are set. Often employees have more than one role and are members of several teams that work together. For example, at HolacracyOne, one employee’s job is to decide which new markets and countries to enter. Another person’s role is to decide which venues to hold new client training in. And another role is the actual trainor. Trainors often have specific requirements such as how much square footage is necessary to comfortably fit all attendees. So while the employee who selects the venues has complete autonomy on deciding what physical space to rent, it must work with the trainor’s requirements.

Another interpretation of holacracy is at the end-to-end marketing firm Semrush, which launched in 2008. Its founders wanted to ensure innovation was at the heart of the company’s culture, so they laid the foundation by calling their decision-making framework “self-management.” 

“Traditional management models can slow down progress,” said Andrew Warden, Semrush’s CMO. “A lot of companies talk about innovation but know little about how to build an innovative culture. This model is about finding the best talent we can and then giving them the tools they need to be empowered.”

There are failures, of course, but they’re expected and seen as part of the learning process. 

Warden is quick to explain that there is management and a C-suite — it’s not a free-for-all. For example, in Warden’s third week on the job, he challenged his team to come to the pitch meeting with their dream ideas. One colleague mentioned the SEO and performance marketing firm Backlinko, saying it’s such a dominant force in the industry, it would be beneficial to Semrush to acquire it.

Instead of scoffing at such an ambitious idea, Warden complimented his colleague on a ‘great idea’ and provided the names of co-workers to follow-up with. He then told his colleague to do all the research necessary and if the numbers and math work, they could bring it to the higher-ups.

“Three months later we acquired them,” Warden said.

Experts say the framework is successful across industries and throughout a company’s lifecycle. However, it requires significant training to educate new employees on how it works. Companies that don’t have the time to invest in training such as ones in hyper-growth mode may struggle to get everyone up-to-speed.

The ever-present question in today’s workplace is whether to return to the office. Robertson said holacracy actually thrives in a remote environment—his company has been remote since it launched 15 years ago — because there are no managers.

“Remote work is hard,” he said. “But it’s far easier with holacracy than a conventional management structure because of the clarity. Managers can be a stop gap. When you’re co-located, at least a manager can walk around and get a pulse of things and jump in as the hero to save the day when there’s lack of clarity. Clarity [around roles] is much more important in a distributed environment.”