Over the past decades, more innovative, flexiblem, and dynamic organizational models were developed. One of the models called holacracy challenges the traditional understanding of how an effective business should function.
Holacracy is a decentralized organizational system, which brings employees more authority and responsibility for their actions. It is based on self-governing teams (circles) that cooperate to achieve the desired result. Compared with the traditional hierarchical structure, it is flat and, instead of one manager, there is a lead link, who direct and initiate the process, rather than lead and control it (Geschwind & Nieswandt, 2020).
The idea of holacracy was introduced by Brian Robertson, who had been initiating innovative and agile organizational practices in his own company called Ternary Software. In 2007, the concept was shared with the public, whereas, in 2010, Robertson wrote the Holacracy Constitution. The book established the fundamental principles of Holacracy and how to create new corporate cultures (Geschwind & Nieswandt, 2020).
If there was an opportunity to integrate holacracy into a company, the most critical objective would be organizing the right culture. As Kumar and Mukherjee (2018) point out, “Holacracy can be effective when these members value autonomy, commitment, risk-taking, and creativity” (p. 12). They argue that if the company encourages such values, the employees will be able to create and maintain an innovation-driven enterprise. Hence, it is vital to promote such elements into the company’s culture and ensure that potential employees possess such qualities. Secondly, since holacracy is based on the lack of leaders, the company needs to restructure to ensure that all employees are sensibly organized in circles by lead links (Kumar & Mukherjee, 2018). The circles are to be divided into sub-circles to bring more freedom and flexibility for the workers. Subsequently, those circles and sub-circles will become self-managed and work through cooperation.
Overall, the most significant element that allows holacracy to function is suitable culture. Once the employees conform to the values mentioned above, the implementation of the system becomes a matter of time.
Geschwind R., Nieswandt M. (2020). Lateral Management A New Approach to Strategic Transformation in the Digital Era. Springer International Publishing. Web.
Kumar, V., & Mukherjee, S. (2018). Holacracy–the future of organizing? The case of Zappos. Human Resource Management International Digest, 26(7), pp. 12-15. Web.