Holacracy as an Evolutionary Algorithm

If we look at how biological evolution works to create “good designs” for our organisms, we can see four main components:

1. There’s an encoding — our DNA is an encoding of a design.
2. There needs to be a way to express that design — that’s our cells; they express that DNA in the world.
3. There needs to be a way to vary the code — in our biological world, that’s sexual reproduction and random mutation.
4. There’s got to be something we’re testing against — a fitness function. “Fit for environment” is our goal in biological evolution.

When you put those four elements together, you unleash this creative process, this design without a designer. It’s pretty incredible in what it can do; it takes a code, it expresses it, it varies the code, and it searches. It’s a search algorithm for finding good designs.

One of the things that really excites me about Holacracy is that it brings that into an organization, and through the same four elements.

1. We have an encoding of an organization’s design — that’s the governance in Holacracy. The governance output encodes the design of an organization in a standardized way.
2. And then we have to express that code in the world — that’s the realm of operations in Holacracy. There are operational processes to take that code and make sure we express it effectively.
3. Then we need to vary it somehow. We, humans, are the primary agent of that, we sense things that are off. We sense tensions, we sense things that could be better in the organization, and we process those through the governance meeting process to evolve the governance structure — the code.
4. And then all of that gets tested against the ultimate fitness function, which in Holacracy is the purpose of the company — what is it we’re here to serve? What is it we’re trying to manifest and do? That serves as our ultimate fitness function. To the extent that we have something that’s not quite fit for that purpose, it surfaces tension.

We process that tension to change the design, we express that design, and we test it and start the cycle over again. This is how Holacracy introduces the innovation of evolution inside our companies.