Feature Article: Holacracy™ in Action: Theory to Practice
Jessica Safran with Bob Huff
Imagine you have a voice in your organization and people listen to it. You feel you belong to something larger than yourself, yet in order to be part of this larger whole, you don’t have to give up who you are to enjoy the benefits of membership. Imagine you can take action, and even if your action is disruptive, rather than being punished, you are enlisted and empowered to help restore the balance that you disrupted. The results produced by your organization are effective, showing agility and responsiveness to the market, the climate of your organization, and the needs of its employees or members.
This scenario is reality if you work at Ternary Software, a privately held growing software development company based in Pennsylvania. It is the result of the vision and efforts of the company’s CEO and founder, Brian Robertson, along with his co-founders and management team. Robertson has taken integral theory and put it into practice—a new form of governance called HolacracyTM—where it steers everything from organizational structure, strategy and policy to service delivery, compensation, and hiring.
I (Jessica Safran) first met Brian Robertson in January 2006 at an Integral Institute IWET event in NYC. A young man with a ponytail and goatee raised his hand during a feedback session and said quite matter-of-factly, “I’m running an integral business.” He went on to explain briefly how his small, but growing software firm had taken integral principles and applied them to operational and governance systems. And the results, so far, were impressive. I was immediately drawn to the fact that someone out there was actually using integral theory to run a business in the real world and that it was not just anyone, but the CEO of a successful software development firm.
Hoping to harness the intellectual horsepower and transformative potential of integral concepts, a group of business leaders joined together to form the Integral Leadership & Business Group in NYC in the summer of 2006. In order to create a collaborative forum where new ideas could be presented and discussed, we began planning a series of workshops, conference calls and an online forum. The vision for the workshops was to engage in inquiry and dialogue to promote taking integral theory into practice. I was so intrigued with the promise of Holacracy that I immediately recommended our group invite Brian Robertson to speak.
On Saturday afternoon, January 27th, 2007, thirty people attended the inaugural Integral Leadership & Business Group event in New York City. The workshop, Holacracy in Action, was presented in a discussion format by Brian Robertson and his Ternary Software management team. Robertson kicked off the workshop with a brief overview of terms, structures and basic practices of Holacracy, and then conducted a real meeting with his team.
Holacracy is a system of integral practices for organizations, aiming for continual improvement to create new sustainable levels of individual, team, and business performance by facilitating and harnessing transpersonal states. Yet it is not required that anyone be at a certain stage of development or transformation in order to engage in Holacratic practices. (Ternary has employees who joined just out of college and are able to work well within this framework.)
A key aim of Holacracy is Dynamic Steering. Most traditional management is based on predict and control. “It’s kind of like riding a bicycle by pointing at your destination off in the distance, holding the handlebars rigid, and then pedaling your heart out to get there,” explains Robertson. “Odds are you won’t reach your destination, even if you do manage to keep the bicycle upright for the entire trip.” Dynamic Steering is based on experiment and adapt, where you hold an aim in mind, stay present, get real data, and adjust. “If you watch someone actually riding a bicycle, you’ll see a slight but constant weaving. This weaving is the result of the rider constantly getting feedback by taking in new information about their present state and environment and constantly making minor corrections in many dimensions—speed, balance, and so on.”
The key rules for Dynamic Steering are:
- The goal is a workable decision, not the “best” decision. The goal is not to integrate all perspectives, but only to integrate the sufficient number of perspectives needed to move the system forward one step. Then reality will reveal what the direction is or what the next perspective will be to integrate.
- Present tensions are all that matter. A tension is what might be typically referred to as an “issue,” “problem” or “conflict” in a traditional organization.
- Any decision can be revisited at any time, as new present tensions arise.
The core organizational structure of Holacracy that enables effective Dynamic Steering is the Circle Organization, which is a holarchy of circles, where each Circle has a breadth of focus, such as a project, a department, or an entire division. Each circle self-organizes and pursues its own aim, performs its own leading, doing and measuring, and maintains its own learning systems.
Circles are connected via a double link. Two people serve on both connected circles.
A broader Circle appoints a Lead Link to carry its needs to a sub-circle’s steering and be accountable for the results of a sub-circle. A sub-circle appoints a Rep Link to seek a conducive environment for the sub-circle and provide feedback to the broader Circle’s steering.
The Circle Organization of Ternary Software
™2006, Holacracy One, LLC
Example of Double Linking
™2006, Holacracy One, LLC
Another core structural aspect of Holacracy is its treatment of Roles and Accountabilities. Usually the question is asked: Who are you accountable to? Actually, many people count on you—a more useful question is: What are you accountable for? Confusion around this can pull us to the personal, where relationships between people get in the way of producing results. Holacracy seeks to clarify accountabilities and make them explicit. Accountabilities are then grouped into Roles and are filled by circle members.
The core decision-making system of Holacracy is called Integrative Decision-Making, and involves a facilitated process to find the key present value behind each perspective, and systematically integrate these into key decisions throughout the organization. Decisions emerge as perspectives are integrated, and decision-making continues until no one present knows of a reason to continue (within the rules of dynamic steering – e.g. present tensions are all that matter). This is not consensus: it is not about personally being for or against a proposal. A member of a Circle cannot block a decision; just add another perspective to integrate. People don’t make a decision; they help it emerge.
A core cultural understanding within Holacracy is captured in a rule called Individual Action, where a person in their organizational role is encouraged to take whatever action is needed, even if it is outside of existing policies and process. The individual must be prepared to “restore the balance” in the system if their action is disruptive and throws a process out of whack, causes loss of resources, or emotional upset or pain. The need for action is taken to the Circle to help the Circle learn and adapt by creating or adjusting necessary policies, roles, and accountabilities.
A major highlight of the inaugural Integral Leadership & Business Group workshop was when Robertson and his staff conducted an actual Circle meeting in front of the workshop participants. This business meeting allowed workshop participants a chance to experience the Holacratic decision-making process and language used at Ternary.
The Circle Meeting provides a guiding structure for Circle members. The energy that is typically wasted through unstructured emotionally-charged interactions in meetings is focused and harnessed. The process is not at the expense of human emotion and connection, but frees it to be safely expressed and integrated into the process.
Robertson and his staff bring up actual tensions or concerns, and start to work them through in the format of a facilitated circle meeting. I along with the workshop participants are engrossed in the movement of the process, impressed with the openness and willingness of the Ternary staff to conduct an impromptu meeting in front of 30 people. Throughout this experience, Robertson is also making comments to the audience to explain terminology and the meeting structure.
The following table is a recreation of a circle meeting. The right hand column is the actual dialogue that occurred between 4 people in the meeting. The left hand column is commentary/observation from Brian Robertson about what is happening in the meeting.
| Circle Meeting Agenda With comments from Brian Robertson. |
Circle Meeting Jan 27, 2007 Lex: Lead link to Operations Team Pat: Rep Link up from Development Dept. Wade: Lead Link to Sales Dept. Brian: CEO, Lead Link to the General Company Circle |
|---|---|
| Check-in Establishes quick rapport and context. Once I was talking in a meeting that didn’t have a check-in, and Pat looked like I was just killing him. I made up a story that Pat didn’t like what I was saying or I was boring him. Then I found out he was sick. The check-in enables us to make up more accurate stories. |
Lex: Doing all right; had a hectic week. Low energy today. Pat: Excited to be here. Wade: Happy to be here. Brian: Energized, I love talking. |
| Administrative Concerns | Brian: We have 15 minutes for our meeting. |
| Announcements & Updates | Pat: I am substituting for someone who is sick and couldn’t be here. |
| Agenda Set-Up Build agenda on the fly, all that matters are present tensions that will lead into proposals. Circle members throw out items that are written down and ordered. |
I have a tension on:
|
| Specific Items: The Circle proceeds through each agenda item using Integrative Decision-Making. | |
| Presentation of Tension | Brian: I have some tension on Missed Opportunities. We are fully booked right now on paying projects, but we are facing phenomenal opportunities. I am seeing them get pushed off when we have non-ideal clients. |
| Proposal I know this is a bad idea, but that’s ok. There is value captured in it, and it can start productive discussion. Only clarifying questions for the sake understanding the proposal are allowed; the facilitator ruthlessly crushes reactions or discussion of any kind. |
Brian: When we see clients that are a better strategic fit, we immediately cease work on the least desirable project and redirect people to the new opportunity coming in. Accountability would fall on the Development Department Lead Link, effective immediately. |
| Reaction Round Quick reactions only, one by one around the circle; no discussion allowed. The facilitator ruthlessly crushes any cross-talk. |
Wade: Do we have a lawyer on retainer? Lex: Doesn’t sound like a good idea to me. I’m confused if it’s in the scope of the General Company Circle to tell the Development Department how to address this need. Pat: Feels like there’s some Sales involvement needed at that point. Also, blowing clients off that are less desirable can harm our reputation with potential new clients. Wade: I completely resonate with the tension; I do not resonate with the proposal. There might be other ways to address this. |
| Amend & Clarify The proposer may make a quick amendment or clarification if needed. |
No clarification or amendments. |
| Objection Round One-by-one around the circle, with no discussion allowed whatsoever, the facilitator asks each person if they see any paramount objections to adopting the proposal. A paramount objection is a reason why the present proposal will push the system outside a key limit of tolerance before we’ll have a chance to adapt and steer. Note that if something is an irreversible decision – one which removes our ability to later steer – then it is not enough to come to a workable decision, we need to either find a good decision, or find ways to increase our ability to get feedback and steer after the decision is made. |
Lex: Feels like we are handing a solution to the Development Department Circle as opposed to the aim we want them to fulfill. We also might run into legal contract issues. Pat: Feels like it is in direct opposition to our company value of partnership. And everything Lex said. Wade: Paramount objection: Irreversible decisions coupled with market consequences. Brian: Client liaison absent. Also we might be pushing up a more attractive client but if that client were willing to wait, and we just drop another client for this one, we lose revenue overall. |
| Integration Open discussion to integrate the core truth in the objection into an amended proposal. |
Wade: If they don’t pay their bills, they violate the contract and we can drop them. We are fully utilized. Would another option be to hire more quickly to get more people in? Brian: We are hiring as quickly as we can already. Amended Proposal: Development has accountability to maintain relationships with external subcontractors to bring them in quickly on an as-needed basis for new work we cannot afford to turn away. |
| Objection Round on Amended Proposal | All: No Objections. |
| Closing Steering feedback for the meeting itself, particularly for the facilitator to make next meeting better. There are meetings where in 2 hours we restructured the organization, changed the salary system, added whole new roles and accountabilities, added a new business line, made a huge new policy and 3 minor ones. The facilitator of that meeting said:“I feel like I didn’t do a good job of moving us quickly through this agenda.” |
Lex: Not bad for a 15-minute meeting in front of a group of people. Did feel some lack of closure about some big issues we opened up. Pat: Got some stuff done. Will see what the rest of the Development Department will say about the new policies. Wade: Brian had a tension, threw out a proposal that addresses the tension, but creates 16 more. However, it created a forum to figure out an alternative that would also address the other tensions. Brian: Meetings are always a little different in front of an audience. Always impresses me how quickly we dig into the heart of an issue and move forward quickly. This feels like one of our slower meetings, and we only tackled a couple of issues, but it was good. |
After the Circle Meeting,s Robertson talked with us about what we could do to actually apply Holacracy immediately in our own situations:
- Practice Circle Meeting facilitation: Do the rounds; chart the objections.
- Gradually introduce Dynamic Steering: “Can we revisit this later?” Revisiting a decision works well if you facilitate effective decision-making meetings.
- Accountabilities: Call them out and make them more explicit. This can be applied up the chain of command as well as down.
The individual concepts outlined here are not new. What Holacracy does is provide a framework that ties them all together. With Holacracy, we are at the threshold of a revolutionary way to be inside the system and to relate to the system itself, creating a context for individuals, teams, and organizations not just to grow, but also to evolve.
For more information about Holacracy, visit http://www.holacracy.org. For more information about the Integral Leadership & Business Group, visit http://groups.yahoo.com/group/Integral-Lead-Biz.
Jessica Safran, founder of VitalSignage Coaching & Consulting, works with forward-thinking, entrepreneurial organizations. Industry specialties include New Media, Internet, and Information Technology as well as Advertising and Magazine Publishing. Specific areas of focus include the leadership, team, and systems of start-up businesses and projects. Most recently, she launched the Integral Leadership & Business Group based in NYC, for those interested in sharing, learning about, and applying integrally informed, progressive leadership and business practices. She holds a master’s degree from the Interactive Telecommunications Program at New York University’s Tisch School of the Arts and a bachelor’s degree in Comparative Religion from Wesleyan University. For more information, visit vitalsignage.com.
Bob Huff is currently a leadership and organizational development consultant living in Minneapolis. His specific focus is looking at how learning impacts leadership and organizational culture. Bob’s professional background is also rooted in integrated marketing and brand development working for some of the world’s top brands such as BMW, Coca-Cola, Purina, Subaru, PGA, Pillsbury and GTE. Bob helped launch the Minnesota Wild NHL team and has worked with dozens of mid-sized and smaller companies on branding and marketing issues. Bob is a graduate of Northwestern University and Columbia University. He holds an MA in Adult Learning and Leadership and has completed part of his doctorate.