Summary
Article 4 defines foundational authorities and constraints that workers have in their roles. These authorities and constraints are heavily geared toward more individual autonomy and freedom to innovate, while also laying out mechanisms for protecting the organization from “too much autonomy.”
Business value
- Unleashes people’s autonomy to innovate and act to get their work done without requiring prior approval. Cuts through red tape and allows for much more operational speed.
Key Features
Below is a summary of key elements from this module. For the actual rules, please see Constitution – Article 4.
Authority to Act
According to Module 1: Organizational Structure, a Role Lead has the authority to take action to express their role’s purpose and accountabilities. But module 1 doesn’t define the boundaries of that authority, so it’s left to the person’s judgement. Module 4 defines boundaries for that authority in a manner that leaves a lot of autonomy to each person in their roles (compared to most conventional companies).
Why it’s useful:
- Clarity on what every Role Lead is allowed to take action on, within which parameters, and what they’re simply not allowed to do.
- Puts in place a decentralized process for spending money. It’s a significant change and should be considered carefully before adopting it, or an alternative process should be made explicit via policy if it’s not desired.
Authority to Interpret Governance
Decentralizes the authority to interpret governance: every Role Lead now has authority to use their judgement to interpret the governance of the organization, and act based on that interpretation. For example, if my role is accountable for ‘Supporting consultants with delivery logistics‘, I get to interpret what “delivery logistics” include or don’t include. I may decide that communicating with a venue to ensure delivery requirements are met is part of my role, but booking the consultants’ flight is not.
Why it’s useful:
- Empowers people to use their own interpretation of written governance, allowing faster execution.
- Relieves Circle Leads from the need to clarify what governance means for others.
- Reinforces the written governance as the source of authority and responsibility.
- Unclear governance becomes more apparent; speeds up tension processing.
Individual Initiative to Break the Rules
Adds an important clause allowing people to violate the rules defined in governance (e.g. violate a policy) in emergency cases, if the person believes more harm would be caused to the organization by respecting the rules. To avoid abuse, this module also adds contingent requirements to anyone who chooses to activate the Individual Initiative rules.
Why it’s useful:
- Ensures that everyone can take action for the organization’s sake, even if the existing rules & processes don’t allow it.
- Defines explicit parameters where someone may “break the rules,” as well as clarifies the follow up steps they’re responsible for.
Alternatives to Holacracy’s Distributed Authority
Without the Distributed Authority module, you should consider that the existing rules still apply when it comes to “authority to interpret” and “authority to act”. Typically, this looks like something like this:
Authority to interpret: you may read your role more generally the governance of the organization, but in case of doubt as to the meaning of any governance, you should err on the side of caution and ask clarification from the Circle Lead. Ultimately, the Circle Lead is the role deciding what something really means and all roles have to align to their interpretation.
Authority to act: you have authority to act in your role to express its purpose and accountabilities, but only within the limits defined in governance and whichever other implicit limitation expressed by your Circle Lead.
There is no rule for “Individual Initiative”, use your best judgement.