Holacracy: why we went “all in” and what we’ve learned in the first few months

“Having an organisational structure with one of those organisational charts and stuff? That’s not me. Formulating a process to determine how we handle our decision-making? The mere thought makes me shudder… As far as I’m concerned, those are mostly things that big organisations are involved in. What’s more, those kinds of things would only impede our creativity. So: not for us.”

Those were, almost verbatim, my words of around two years ago. After all, our design club, with 22 people on the payroll, didn’t need that kind of complex stuff, right? How differently things turned out ….

Some four months ago I signed the holacracy constitution with real conviction and we went all in with our company. Follow me in the story about our search for more structure. About why, after a long search, we opted for holacracy, and what our experiences have been to date. Written deliberately from practical experience by someone who is right down to earth. Because I’m enthusiastic, truly enthusiastic.

A mess? It wasn’t really!

It’s not like things were a mess before the introduction of holacracy. Far from it. In fact, everything was going pretty well. However, a lot of things were not clear. You could really see that in the new people. They had a lot of unanswered questions. Logical questions, about how to take a day off or where to order a new cable for their Mac. We didn’t have standards for those kinds of things, let alone roles to which these responsibilities were assigned. So, often people were told, “don’t worry, it will be okay.” Not because no one wanted to help them, but because they were not really sure themselves. After three months people would be conditioned and do things the way they thought was right — nothing really wrong with that.

What we did underestimate is the lack of tranquillity that is the result. Someone who spends all day substantively trying to do the best job possible would probably prefer not to have to think about where to order his Mac cable. He would like to have a proper system in place. I’ll take myself as an example. Every week I would get dozens of questions about things that colleagues would have been happy to handle. But nobody knew where to take their questions, so, traditionally, they would ask the highest-ranking person. Logical.

Boss vs Leader

But really, I’m not the boss. And I definitely don’t feel like the highest-ranking person. I am not the authoritative type who wants to have a say in everything and make all the decisions. Fortunately my two fellow proprietors feel the same way. Like everyone else we have a role to play and that role is subordinate to the greater interest of the business as a whole. And yes, we are the owners of the business, that is true.

As proprietors we are responsible for making sure that people are happy in their job and can perform to the best of their ability. That is a role, not a function. A serviceable role in which you help people when they encounter certain boundaries or have trouble coming up with answers. But also an active role in which you pull the cart and continuously give people insight into the big puzzle that they are part of. Not a boss, but rather a leader or coach: much better words that have nothing to do with ‘boss’ or ‘manager’.

Personal Leadership

A good leader improves others by utilizing their strengths. One of the largest strengths you can unleash in people is that of personal leadership. It’s incredible what it does for people when they start making real choices and no longer hide behind the rules of an organisation or someone else’s opinion. That way you are always in charge and that inspires self-confidence.

As an organisation this is where you can make a clear difference. After all, you can choose to structure your business in such a way that personal leadership is encouraged. Trust and responsibility are the key words. They ensure that people feel safe in their role. A role that you don’t force on people, but that you allow them to consciously choose. This is where personal and organisational objectives come together and people do what they enjoy doing. As far as I’m concerned, that is one of the highest objectives you should aim for as an organisation.

Continuous Improvement

Organisations must keep adjusting to their continuously changing environment. You don’t have a choice; adapt or go out of business. This is the direct opposite of how many organisations apply this in their daily practice. Take a random meeting, for example. Frequent and lengthy ‘yes-but-I-think’ discussions are held about conceivable scenarios in the remote future. Meetings that often don’t have any tangible results and — what’s worse — are scheduled at times when people are ‘in their flow’ and could really do without a meeting. Paul Graham wrote a spot-on article on this subject.

It’s not that we don’t want to discuss things; far from it. Communication is essential in any company, so also in ours. But we want to do things differently, smarter. With a lot more focus on concrete actions to continuously keep improving in small steps. This requires a different mindset, and not just during meetings.

Yes, we knew what we wanted. More clarity, a clear structure in which people can act on the basis of their strengths, not a traditional hierarchy, and with enough flexibility for continuous improvement.

Our first introduction to holacracy

So we started looking; looking for ‘operating systems’ that fit the DNA of our company. We talked to people — as many people as possible, with different backgrounds. In the course of a few months we came across different systems. A lot of them we rejected out of hand. We seriously considered sociocracy. This absolutely felt like the right direction, but the closer we looked at it the more we felt that it wasn’t quite right. It had to be more pragmatic, more practical. And as always when it comes to gut feelings, you know when something is just right, so we continued looking. Eventually we were introduced to the concept of holacracy by fellow entrepreneur Ruben Timmerman. He was convinced it was the right thing for us and advised us to go and talk to Diederick Janse. After that meeting we were sure: it was going to be holacracy. This appeared to be the structure we were looking for.

We told our team about our plans, with a side note that it had to be a joint decision. We invited Diederick to give a presentation. People asked a lot of questions and comprehensively discussed what it would mean for people in the everyday practice. At the end of the session we asked everyone the same question: should we go for it? Everyone agreed. We were off and asked Diederick to support us in the process.

The initial months

Everyone was asked to write down their daily recurring activities for a period of three weeks. In an initial meeting everyone wrote their most important tasks on post-it notes. Based on these notes we drew up an initial structure of roles and circles, based deliberately on mapping out the current situation rather than outlining the desired situation. We wanted to start with a situation that was workable for everyone and based on which we could improve continuously.

Three circles were devised: groups of roles that appeared to belong together based on their activities or on the joint objective within the bigger picture. We scheduled the first meetings in our diaries and we were up and running.

We have now been actively working on the implementation for about four months and we have already learnt a lot. We are still in our infancy, and I’m very aware of that, but I would still like to share our ‘learnings’ with you:

• If you decide to adopt the concept of holacracy get an external coach to support you in the process. This gives everyone the opportunity to quietly familiarise themselves with the new structure. It is reassuring to have someone at the meetings who knows the rules and knows what to do when things are not clear.
• After around six weeks we hit the first low point. There had been a lot of changes in roles and responsibilities. This meant that people were no longer sure where to go for answers. This is when we came up with the role of ‘holacracy coach’ — someone you can ask any question at all. Not an oracle with a solution for everything, but a point of contact who is always available.
• Glassfrog is an online software package developed by the founders of holacracy. The software supports the use of holacracy. This software is very helpful to us because it facilitates us in the process, especially in meetings. It also provides everyone with a clear and up-to-date overview of all the roles and circles within the organisation, at any time.
• Make sure that everyone in your team understands the basic rules of the system. You will have to schedule regular ‘catch-up sessions’ for this purpose. After all, you can’t play a game if you don’t know the rules.
• We jointly decided we needed more structure, but that doesn’t mean everyone experiences it equally positively. For some people it is a godsend, others struggle with it. The latter enjoy waxing at length during meetings and have trouble getting to the point. In my experience holacracy does not allow a lot of room for this during the meetings. This is something people have to get used to, so give them enough time.
• When you are using different circles, decisions are sometimes made that you are not involved in. That is not a bad thing, but sometimes it helps to know. We asked the holacracy coach to e-mail everyone a brief summary of the main decisions after a day full of governance meetings.

The coming months

My expectations for the coming months are high. It’s incredible how much structure we have managed to implement in recent months, and what this does for people, not to mention what happens when everyone can function optimally, based on his or her role. As is the case with any change there will obviously be difficult times, but we have a lot of confidence in the process. And of course we will ultimately determine the success together as a team. And with ‘embrace change’ and ‘always help someone along’ in our DNA that should not be a problem!